Assignment: Assignment Part C Project Charter
Course: JWI550 Operations Management
This kaizen event will focus on improving the bar end (scrap) removal process. The event that will be held the next three days and will last half the day each day. At the end of the saw process there is material left over that can either be returned to inventory to be used to make another part or the end is too short and is considered scrap. The bar end scrap is presently not being handled and the finance team just did a major cleanup of the physical scrap and system inventory to get it under control. Now that the cleanup is complete, we would like to focus on how to maintain the current inventory and ensure the scrap does not accumulate again. Currently, only one saw employee transacts the scrap out of the system, other saw employees will put it back into raw material and another handful just put the scrap pieces in a random spot. The purpose of the kaizen is to identify the inconsistencies with the handling of the bar ends, brainstorm possible procedures, choose the best suited process and then discuss how to implement the new process.
- Six Sigma Project for Consideration
2) Project Charter
Bar End Process improvement and Scrap Reduction
Currently there is an issue identifying and disposing of the bar ends properly. The accuracy of this process is on 50%. The bars are not being scrapped out of the system and properly put to a separate scrap pile. They are being returned to inventory causing extra work for the finance team. This is also causing inventory values to be over stated due to the material being scrap (lesser value) and being placed back into inventory at its full purchased value. The finance team is currently identifying them weekly and asking the saw department to revisit the bar ends and scrap them on a separate occasion. Saw is handling the scrap ends on rare occasions instead of dealing with them when they are created. The company is also losing money by not selling off the scrap for any residual revenue.
Goal statement or Objectives
The goal of the project is to maintain the bar end scrap inventory on a regular basis. By achieving this, we will be able to have regular scrap shipments sent out for revenue and properly maintain the inventory from a space perspective and a valuation perspective. The raw material staging area will be kept maintained and organized.
Out of Scope
- The kaizen will focus on the last two steps of the saw operation as outlined in the Value Stream Map (image 1).
- Analysis will focus on the current process and focusing on the process steps that are not working well.
- The meetings will be held for four hours a day for three days. This includes the project kick off discussion and final report debriefing.
- The kaizen will not focus on the entire saw process that is lined out in the Value Stream Mapping.
- No other metrics will be measured in the kaizen other than the accuracy improvement of the bar end removal.
- Volume. The volume of the inventory must be reduced.
- Timeliness. Bar ends need to be identified, transacted out of the system and placed in a designated scrap bin within a certain time frame.
- Age. The process needs to eliminate aging scrap material.
- Volume will be measured reviewing the inventory report on a regular basis to monitor a reduction of bar ends.
- Timeliness will be tracked by documenting the start of each process to the completion of the process.
- Age will be monitored by reviewing the inventory report on a regular basis to monitor the aging of the bar ends in inventory.
- Reduction of inventory to manage
- Increased organization of raw material yard
- Documented procedure for handling bar ends
- Increased time to spend on making product
- Reduction of raw material in inventory
- Steady flow of scrap revenue
- Hot Shop Operations Manager
- Saw Department Team lead
- Raw Material Manager
- Raw Material Team Lead
- Material Handler Team Lead
- Shipping Manager
- Shipping Team Lead
- Financial Analyst
Critical-to-quality requirements or CTQs of the processes within the scope of this project
Below are the CTQs that are directly traceable to the scope of the project:
Key metric Y (or key metrics Ys)
Milestone dates for each phase of DMAIC (or DMADV)
The time required per week should be no more than 2 hours to complete the entire process.
Project Champions – Plant Controller and Plant Manager
Project Leader – Senior Financial Analyst
Project Team Members