Improvement of Production Lines and Test, Analysis and Comparison of Continuous Improvement Methods

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1 Improvement of Production Lines and Test, Analysis and Comparison of Continuous Improvement Methods Sebastião Sousa Instituto Superior Técnico, Universidade de Lisboa October Introduction Abstract As said before there is an ever growing need The world we live in today is characterized by to implement continuous improvement an exponential technologic evolution, methodologies in today s companies. This companies today evolve much faster, and to thesis will provide an analysis and comparison survive in this fierce and constant competition of different continuous improvement methods they must keep up with the evolution and by testing them in a real environment. innovate. Companies fight amongst each other for market share, improving and innovating be it in product or service quality, price or everything else they can, but one thing is clear: does who don t will be left behind.[1][2][3] Unilever Jerónimo Martins is one of the biggest Portuguese companies with an EBIDTA of 800 million Euros, that competes not only at a national level but also at an international level. Being a leader company in various markets With the growing need to improve companies no matter what their activity sector is, some theories, tools and techniques were developed throughout the years with that goal. Continuous improvement is a long term strategy to improve a company in value and wanting to consolidate their leadership position, they have the need to continuously improve. The author had the chance to develop this Master s Thesis in partnership with Unilever proposition, customer satisfaction, quality, Jerónimo Martins whose goal is to test, flexibility or cost reduction that should be analyze and compare three different embraced by companies that want to keep up continuous improvement methods while with today s evolution. [4] applying them to three different ice cream production lines at Olá ice cream factory that This thesis is a tool that will possibly help to need improvement. understand those methodologies and help defining which corporate environment is best In first place a bibliographic revision of the for which methodology, by testing, analyzing continuous improvement area is made. and comparing several methods that will be applied in a real environment. Followed by the explanation of the problems in the production lines. After the methods to apply, and the lines to which they will be Keywords: Continuous Improvement, Problem Solving, Lean, PDCA, 8D, Major Kaizen applied are known, each method is applied to each line. An analysis of each method is then 1

2 individually done, followed by a comparison of the three amongst them. This way this thesis not only provides Unilever Jerónimo Martins with solutions that allow them to have some cost reductions but also some conclusions are taken about continuous improvement methods and what factors to have in account when choosing them, envisaging their potential areas of application. 2. Continuous Improvement Methods Used There are several continuous improvement methods but on this thesis only 3 will be applied. The ones chosen are: Major Kaizen, 8D and PDCA. MAJOR KAIZEN Major Kaizen or Kaizen Events is a continuous improvement method that derives from the Lean theory. The word Kaizen means improvement in Japanese. This a balanced method not to flexible and not to rigid and has 7 steps [5] [6]: Phenomenon Description Sistem/Process Goal Root Cause Actions and Countermeasures Results Standardization and Future Actions 8D 8D (8 disciplines) is a method created by Ford Motor Company, this company tried to create it s own philosophy based on TQM. The method consists of 9 steps which makes it a fairly rigid method. Initially there were 8 steps but later the step D0 was added. The steps are as follows [7] [8] [9]: D0 Plan D1 Team D2 Describe the Problem D3 Temporary Solution D4 Identify the Root Cause D5 Develop a Permanent Solution D6 Implement a Permanent Solution D7 Prevent Reocorrence D8 Celebrate Success PDCA PDCA was invented by William Edwards Deming. His goal was to use PDCA has a continuous improvement tool in Japanese industry. PDCA is an acronym for the 4 steps of the method [10] [11] [12] [13]: Plan (Planear) Do (Fazer) Check (Verificar) Act (Agir) 3. Production Lines Each one of the three continuous improvement methods explained above will be tested by applying them to three different production lines at Unilever Jerónimo Martins. All three lines are from Olá ice cream factory and have slightly different problems: Glacier I One of the lines used to test the methods is Glacier I, and the problem it currently faces is identified in the Figure 1. After wrapping the ice creams, there is a transition where the ice creams misalign, which causes the need to have a working station with very little added 2

3 value, aligning the ice creams before they go into the boxing machine. Figure 3 Misaligned ice creams boxes at Hoyer Figure 1 Misaligned ice creams at Glacier I Glacier II The second line used to test the methods has the same problem, but for different reasons the ice creams also misalign during the process of making them, which also causes the need of a work station with little added value aligning the ice creams in the divisions seen in the Figure 2. Figure 2 Misaligned ice creams at Glacier II Hoyer The third and last line in study also has the problem of a little added value work station, aligning the ice creams, but this time it s scoop ice cream boxes as seen on Figure 3 and they also need to be aligned before going into the palletizing machine. 4. Application of Each Method in Each Line Major Kaizen (Glacier II) Major Kaizen was the first method to be applied because it is the continuous improvement method already used at the factory, and it is the author s intention to first analyze how the application of a continuous improvement method would go without his influence. This method was applied to the Glacier II line. The results weren t the best. Although in the end the Major Kaizen process was completed, and a solution was developed, the organization of the meeting was chaotic. The steps were not fully respected and a methodic line of thinking was not used, but in a unorganized way the team managed to talk about the critical issues that in the end allowed to complete the Major Kaizen. The solution developed using the method consisted of improving several problems along the line including a very problematic curve where the ice creams misalign significantly, three transitions and the entry of the ice creams to the divisions seen in Figure 2. A cost estimate was asked to Afinomaq, a 3

4 company Unilever Jerónimo Martins usually goes to for these kind of improvements and the cost for the implementation of this solution is Knowing that Glacier II worked 1624 hours in 2015, and assuming this is the average yearly hours this line works, that the factory works 10,5 months per year, and also knowing that Unilever Jerónimo Martins pays 5,3 /hour to the worker of the work station in study, the payback period of this solution was calculated and it would take 3 years and 11 months, period after which Unilever Jerónimo Martins would save 819,7 /month. have holes, it was obvious that the solution was to include a short straight piece of line with a closed belt. Figure 4 illustrates the current situation and the proposed solution. A cost estimate was asked to Vitor Martins a company Unilever Jerónimo Martins also goes to for these kind of improvements and the cost for the implementation of this solution is However Unilever Jerónimo Martins did not approve the solution, and decided it is more economically viable to keep the current situation. 8D (Glacier I) The second method to be applied was 8D. Given the fact that this method has never been implemented in the factory, and the team did not know anything about it, the leader of the implementation was the author who was in charge of explaining the method and help guiding the team. This method was applied to the Glacier I line. Unlike what happened in Major Kaizen, 8D s application went smoothly and in an organized way, the steps were respected and almost all intervenients participated actively. The balance of this implementation is clearly positive. The solution developed was simple but effective. Once the team found that the root cause of the problem, was the fact that the ice creams got stuck in the belts holes after the transaction, because in order for the belt to adjust to the curves of the line it needed to Figure 4 Current Situation (Top) and Proposed Solution (Bottom) Knowing that Glacier I worked 2355 hours in 2015, and assuming this is the average yearly hours this line works, that the factory works 10,5 months per year, and also knowing that Unilever Jerónimo Martins pays 5,3 /hour to the worker of the work station in study, the payback period of this solution was calculated and it would take 3 months, period after which Unilever Jerónimo Martins will save 1188,7 /month. Unilever Jerónimo Martins approved the solution and it will be implemented in the end of the year. PDCA (Hoyer) The last method to be applied was PDCA. As in the 8D the author was in charge of 4

5 explaining the method to the team. PDCA was applied to the Hoyer Line. The application went without big problems although not all of the members participated. All the steps were respected although in PDCA this can be a vague statement, given the fact that for example in the Plan phase alone the team did the equivalent to the D1,2,3,4 and 5 steps of the 8D but in a different way. This does not mean the team did exactly the same, but that in the plane phase it is supposed to obtain the same answers as in those steps, meaning that although the team respected the steps this method allows for some confusion while doing that, and so the balance is not as positive as the 8D. The solution developed has a twist on what the methods usually suggest. Typically methods suggest the team must find the root cause of the problem and then eliminate it. In this case the root causes of the problem where so many along the line, the team decided to develop a solution that automatizes the current work station. This solution consists of a machine that turns the ice cream boxes, leaving them in the aligned position as can be seen on Figure 5. A cost estimate was asked to Vitor Martins, the same company as before and the cost for the implementation of this solution is Figure 5 3D model of the developed solution in Hoyer. Knowing that Hoyer worked 1436 hours in 2015, and assuming this is the average yearly hours this line works, that the factory works 10,5 months per year, and also knowing that Unilever Jerónimo Martins pays 5,3 /hour to the worker of the work station in study, the payback period of this solution was calculated and it would take 1 year and 3 months, period after which Unilever Jerónimo Martins will save 724,8 /month. Unilever Jerónimo Martins approved the solution and it will be implemented at the end of the year. 5. Analysis and Comparison of each Method The goal is not only to analyze and compare the methods from the authors point of view, given the fact that would be very limitative. There are several types of managers and each one can adopt different strategies in their company. And there are several methods and each one has their strengths and weaknesses, being the manager s option to decide which characteristics on each method he values the most, and according to that decision choose between methods. So a comparison is always subject to the preferences of who compares them. To reduce the subjectivity associated with those preferences, a process that allows anyone to compare the methods according to their preferences will be created. This way not only will the author take his conclusions but allow different people with different perspectives take their own conclusions. 5

6 This comparison process consists of 4 steps: 1. Choosing of the criterion that allow to analyze each method individually (Done by the author) 2. Individual analysis of each of the methods application, which consists of assigning values to each criterion on a scale of 1 to 5, thus creating a quantitative evaluation of each method. (Done by the author) 3. Assigning the weights (in percentage) of each criterion, thus quantifying which characteristics are more or less valued in a continuous improvement method. To help with this step a pair wise comparison matrix is used. 4. Calculating which is the most suited method for your case, by inserting the evaluations and the weights assigned to each criterion calculated on steps 2 and 3 in a concept scoring matrix. The criterion used on step 1 and 2 of the process to analyze each method are the following: People s involvement in the process People s satisfaction Integration in the company s culture Definition of roles in the team Easiness of application Flexibility/Necessary creativity Rigidity Time to obtain a solution And the evaluation of each criterion in each method can be seen on Table 1: Table 1 Evaluation of each criterion in each method It s easy to observe that the sums of all evaluations of each method are similar among Major Kaizen and 8D but inferior to 8D. These sums were expected to be around the same number in all of the methods, given that they each have their strengths and weaknesses. The PDCA method as the Major Kaizen are more flexible methods than the 8D, characteristic that in a environment with a high Lean Culture, and a motivated team with big knowledge of quality tools is expected to potentially allow both the PDCA and Major Kaizen to obtain a higher evaluation on the 3 first criterion It is expected that a team with those characteristics will feel more motivated and satisfied in applying a more challenging method. It is clear that the fact that all of the methods were applied by an unmotivated and with little Lean culture, has potentially affected negatively the evaluations obtained by Major Kaizen and PDCA on the three first criterions. The first conclusion taken by this first look at the sums of the results is that the Lean culture and motivation of the team are a factor to consider when choosing a continuous improvement method. So it will now be analyzed the influence the type of manager might have in that same choice. 6

7 Steps 1 and 2 of the comparison process were done by the author, steps 3 and 4 can be done by anyone who intends to choose between continuous improvement methods. But since it is a goal to obtain some conclusions about the methods comparison, some comparisons will be done using the profile of 3 types of typical managers: Focused on the results manager whose main focus are the results. He is not worried if the workers are motivated or if they understand the importance of the method as long as they do it, create solutions and solve problems. Focused on Lean culture manager whose main focus is that every employee embraces a Lean culture, dominates the quality tools and the continuous improvement method, even if it requires more time and money spent on training them. Focused on the balance between results and Lean culture manager whose focus is between the two above, meaning that he wants employees to have some lean culture and understand the importance of methods but on the other hand wants to obtain results without spending too much time or money training them. Focused on the results manager prefers Easiness of application and rigidity over any other criterion. Focused on Lean culture manager prefers people s involvement in the process, people s satisfaction, integration in the company s culture and necessary creativity to any other criterions. Focused on the balance between results and Lean culture manager prefers integration in the company s culture and easiness of application over any other criterions. Table 2 Weights of each criterion obtained through pair wise comparison in each manager profile After calculating these weights they were inserted in three concept scoring tables. Table 3 shows concept scoring through the profile of the focused on results manager. Two other tables which are not shown were created through the remaining profiles, and the final results through all three profiles where summarized on Figure 6. Each one of the 3 manager profiles were subjected to a pair wise comparison, which gave the weights in percentage in each criterion for each manager shown in Table 2. The most important preferences that were used while using each managers profile were: 7

8 Table 3 Concept scoring through the profile of the focused on results manager Figure 6 Obtained results through each manager s profile concept scoring 8D was the method that obtained the best score in all three different scenarios. It is thought that these results were affected by the low scores obtained on the first three criterions by both the Major Kaizen and PDCA, that were, as previously said, potentially obtained by the low motivation and Lean culture of the members of the team that implemented those methods. Major Kaizen Major Kaizen is not a completely rigid, nor completely flexible method, being a hybrid between 8D (very rigid) and PDCA (very flexible) For these reasons it was expected that this method would have a higher score in the focused on the balance between results and a Lean culture manager scenario. It was also expected to behave well in the other scenarios thanks to it being a hybrid. It is thought that the results do not show the full potential of the method, but the very even scores obtained in all scenarios shows its multifunctionality, meaning that however the weight of the criterions the Major Kaizen manages to have reasonable scores in all scenarios. 8D 8D is a rigid and easy to apply method, it s fourth step: temporary solution also makes it a fast method to show results. On the other hand it s rigidity limits it s potentialities. For these reasons, it was expected for the 8D to obtain a good score in the focused on results manager scenario, but a little lower on the other two scenarios. However this method 8

9 was the one that obtained the best classification in all scenarios. It is thought that these results were affected by the low evaluations obtained by the Major Kaizen and PDCA for the reasons already explained related to the motivation and Lean culture of the team. Those scores could have potentially been higher with a different environment. Although the results were slightly different than those expected the scores of the 8D in each scenario reflect something about the method. The scenario in which the 8D obtained the highest score was the one of the manager focused on results, lowering those values in the other two scenarios. PDCA PDCA is from all the methods the most flexible, which on one hand is a catalyzer for a more creative and out-of-the-box thinking, but on the other hand requires a deeper understanding of the quality tools and Lean thinking. This method thus has the risk of not producing effective solutions if performed by an inexperienced and uncreative team. For these reasons it was expected that this method obtained a high score in the focused on Lean culture manager scenario and lower scores on the other two scenarios. In the focused on Lean culture manager scenario PDCA was not the one with the highest score but it was where this method obtained its higher score, reflecting its potential for the scenario. Theoretical Scenario The graphic on Figure 7 illustrates the scenarios in which the continuous improvement methods are expected to have the best use of their strengths. It is not intended to claim that each method can only be applied on the scenario shown on the graphic but to demonstrate the scenarios, based on theory, on which each method will fully utilize its characteristics. The two axis are the Lean maturity of the company and the complexity of the problem. By analyzing Figure 7 it can be seen that DMAIC is the method most suited for complex problems in companies with high Lean maturity. That PDCA also requires a high Lean maturity but is more suited for less complex problems. Followed by Major Kaizen and A3 problem solving which have its best use in less mature in Lean companies and for even less complex problems than the PDCA. And the method most suited for the least complex problems and in the companies with the least Lean maturity is the 8D.bbbbbbbbbbbbbbbbbb Figure 7 Scenarios in which the continuous improvement methods are expected to have the best use of their strengths It remains to say that with this thesis the influence of 3 factors in the choice of which method is best for each scenario was studied: The Lean maturity of the company The type of manager The complexity of the problem And it is clear that the Lean maturity of the company is what potentially imposes a limit in the choice of the method. Meaning that a manager focused on Lean culture that wants to 9

10 implement a PDCA on a company with a low Lean maturity will have difficulties, given that the PDCA requires a high Lean culture and knowledge of quality tools. On the other hand, a manager focused on results that wants to implement an 8D on a company be it with a low or high Lean maturity will have relative ease. So the hypothesis that is recommended to be validated with further studies is that the Lean maturity of the company is what imposes the limit on the choice of the continuous improvement method. References [1] I. Kalb, "Innovation Isn't Just About Brainstorming New Ideas," 8 Julho [Online]. Available: [Accessed 8 June 2016]. [2] A. L. e. R. Charan, "Why Innovation Matters," Abril [Online]. Available: [Accessed 8 June 2016]. [3] S. MacFarland, "Why Is Innovation Management So Important to Compete?," 30 Outubro [Online]. Available: [Accessed 8 June 2016]. [4] D. Bradley, "Continuous Improvement Necessary For Business," 17 Janeiro [Online]. Available: [Accessed 9 June 2016]. [5] "Kaizen," Lean Production, [Online]. Available: [Accessed June ]. [6] "Major Kaizen," Unilever, [7] "8D Problem Solving Process," Mind Tools, [Online]. Available: [Accessed 7 June 2016]. [8] F. G. Adler, "The 8D Problem Solving Process," Operational Excelence Consulting, 17 Dezembro [Online]. Available: [Accessed 7 June 2016]. [9] "Supplier Training 8D Problem Solving Aproach," Brooks, [Online]. Available: df. [Accessed 7 June 2016]. [10] "How to implement the PDCA cycle," East West Manufacturing, [Online]. Available: [Accessed 6 June 2016]. [11] "PDCA Problem Solving Tools and Technique," Flevy, [Online]. Available: [Accessed 7 June 2016]. [12] "Applying PDCA A3 Thinking and Problem Solving," Lean Enterprise Academy, 22 Abril [Online]. Available: [Accessed 7 June 2016]. [13] S. D. Bellamy, "PDCA Problem Solving Guide," 22 Agosto [Online]. Available: [Accessed 7 June 2016]. 10

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