Process improvement in an office environment using Lean Six Sigma

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<ul><li><p>Process improvement in an office environment using Lean Six Sigma </p><p> Finding ways to work smarter instead of harder in day-to-day </p><p>customer service operations </p><p>by </p><p>David Gransson </p><p>Arnela Tunovic </p><p>Diploma work No. 100/2012 </p><p>at the Department of Materials and Manufacturing Technology </p><p>CHALMERS UNIVERSITY OF TECHNOLOGY </p><p>Gothenburg, Sweden </p><p>Diploma work in the Masters Programme Quality and Operations Management </p><p>Performed at: Panalpina AB </p><p> Fljelbergsgatan 18, 431 37 Mlndal </p><p>Supervisor: Anna Trmnen </p><p> Panalpina AB </p><p> Fljelbergsgatan 18, 431 37 Mlndal </p><p>Examiner: Peter Hammersberg </p><p> Department of Materials and Manufacturing Technology </p><p> Chalmers University of Technology, SE - 412 96 Gothenburg </p></li><li><p>i </p><p>Process improvement in an office environment using Lean Six Sigma Finding ways to work smarter instead of harder in day-to-day customer service operations David Gransson &amp; Arnela Tunovic </p><p> DAVID GRANSSON &amp; ARNELA TUNOVIC Diploma work no 100/2012 Department of Materials and Manufacturing Technology Chalmers University of Technology SE-412 96 Gothenburg Sweden </p><p>Telephone + 46 (0)31-772 1000 </p><p> Chalmers Reproservice </p><p>Gothenburg, Sweden 2012 </p><p> Process improvement in an office environment using Lean Six Sigma Finding ways to work smarter instead of harder in day-to-day customer service operations DAVID GRANSSON &amp; ARNELA TUNOVIC </p><p>Department of Materials and Manufacturing Technology </p><p>Chalmers University of Technology </p></li><li><p>ii </p><p>Acknowledgements </p><p>This thesis is a part of the requirements for a M.Sc. degree in Quality and Operations Management at Chalmers University of Technology, and has been carried out at Panalpina AB in Mlndal, Sweden, during the spring and summer of 2012. </p><p>We would like to acknowledge and thank our supervisors, Anna Trmnen, Area Head of Business Process &amp; Quality Northern Europe at Panalpina AB, and Peter Hammersberg, University lecturer, at the Department of Materials and Manufacturing Technology, Chalmers University of Technology, for their support throughout this project, and for giving us the opportunity to perform this thesis. </p><p>We would also like to thank the operators at the Ocean Import Department, their managers, and other employees at the Head Office for Panalpina Northern Europe for their interest in the project, and their willingness to help us whenever we had any problems or questions. </p><p>Gothenburg, August, 2012 </p><p>David Gransson &amp; Arnela Tunovic </p></li><li><p>iii </p></li><li><p>iv </p><p>Abstract </p><p>This project aims to analyze the current state and provide improvement proposals for the Ocean Import Department at Panalpina in Gothenburg, Sweden. The department is currently experiencing a heavy workload and feels that there is a need for a new way to improve their processes since they are lagging in performance when benchmarked against other departments within Panalpina. By using Lean Six Sigma the project could connect to an ongoing global continuous improvement program within Panalpina as well as the local interest for Lean Six Sigma. </p><p>The project was executed according to the DMAIC cycle known from Six Sigma theory. The first part was dominated by the measurements of the current state and different workshops, with the goal to map the process and frame problems and causes to variation in the process. During the second part of the project focus shifted towards Lean thinking as this turned out to be the appropriate course for this project. </p><p>It was realized that the greatest improvements lied in continuous improvements instead of heavy data analysis. Information and communication became the main themes in the project, both excess and lack of them is causing a stress on the operators, partly due to Panalpinas worldwide operations which create room for many cultural differences and makes it hard to standardize processes. But even communication within the office has room for improvements, and waste is created as the customer is not always in focus. </p><p>Two models were developed that are meant to guide the future work with continuous improvements by identifying problem areas and providing guidance for how to handle them. Future measurements are recommended on variables inside the process, using process charts. This is a resource efficient way of measuring a process that gives easy analysis and a possibility to predict problems so that suitable countermeasures can be applied. </p></li><li><p>v </p></li><li><p>vi </p><p>List of abbreviations </p><p>B/L: Bill of Lading (receipt of shipment for legal and practical purposes) DMAIC: Improvement methodology used in Six Sigma FCL: Full Container Load LCL: Less then Container Load PDCA: Plan Do Check Act; improvement methodology used in Lean. PMT: Process Measurement Tool SOP: Standard Operating Procedure WIP: Work in progress (material being in production) </p></li><li><p>vii </p></li><li><p>viii </p><p>Table of Contents </p><p>1 Introduction ....................................................................................................................1 </p><p>1.1 Background ..............................................................................................................1 </p><p>1.2 Goal Statement ........................................................................................................2 </p><p>1.3 Project planning .......................................................................................................2 </p><p>2 Theory .............................................................................................................................3 </p><p>2.1 Introduction to Six Sigma ..........................................................................................3 </p><p>2.2 Introduction to Lean .................................................................................................4 </p><p>2.3 Lean Six Sigma ..........................................................................................................7 </p><p>2.4 Lean in service and administration ...........................................................................8 </p><p>2.5 Six Sigma in service and administration ....................................................................8 </p><p>2.6 Change management ...............................................................................................9 </p><p>3 Methodology .................................................................................................................11 </p><p>3.1 Literature study ......................................................................................................11 </p><p>3.2 Action research ......................................................................................................11 </p><p>3.3 Workshops .............................................................................................................11 </p><p>3.4 Observations ..........................................................................................................11 </p><p>3.5 Measurements .......................................................................................................12 </p><p>3.6 Interviews ..............................................................................................................12 </p><p>4 Define............................................................................................................................13 </p><p>4.1 Identification of process and customer requirements.............................................13 </p><p>4.2 Initial identification of problem areas .....................................................................17 </p><p>4.3 Fishbone Diagram ...................................................................................................19 </p><p>4.4 A defined summary ................................................................................................19 </p><p>5 Measure ........................................................................................................................21 </p><p>5.1 Identification and classification of process parameters ..........................................22 </p><p>5.2 Detailed measurements of the process ..................................................................25 </p><p>5.3 A measured summary .............................................................................................29 </p><p>6 Analyze ..........................................................................................................................31 </p><p>6.1 The measurements .................................................................................................31 </p><p>6.2 Insight in the process visit Gemba ....................................................................32 </p><p>6.3 Investigate the possibilities of a reorganization ......................................................32 </p><p>6.4 Areas of focus for improvements ............................................................................33 </p><p>6.5 An analyzed summary ............................................................................................36 </p><p>7 Improve .........................................................................................................................37 </p></li><li><p>ix </p><p>7.1 Introductory workshops .........................................................................................37 </p><p>7.2 Identified areas of focus for improvements ............................................................39 </p><p>7.3 Model for continuous day-to-day improvement work ............................................43 </p><p>7.4 Model for long-term improvements .......................................................................45 </p><p>7.5 Benchmarking ........................................................................................................48 </p><p>7.6 Cultural change ......................................................................................................48 </p><p>7.7 An improved summary ...........................................................................................48 </p><p>8 Control ..........................................................................................................................51 </p><p>8.1 Control parameters ................................................................................................52 </p><p>8.2 Updated FMEA .......................................................................................................55 </p><p>8.3 A controlled summary ............................................................................................56 </p><p>9 Results...........................................................................................................................59 </p><p>10 Discussion ..................................................................................................................61 </p><p>11 Conclusions ................................................................................................................63 </p><p>12 References .................................................................................................................65 </p><p>Appendix A: Problems that would cause a customer to change forwarder ...........................69 </p><p>Appendix B: Affinity-Interrelationship Method (AIM) ...........................................................70 </p><p>Appendix C: Cause and Effect Matrix ....................................................................................71 </p><p>Appendix D: Process Measurement Tool (PMT) ....................................................................72 </p><p>Appendix E: Detailed improvement suggestions for job costing ............................................73 </p><p>Appendix F: Detailed improvement suggestions for invoicing ...............................................74 </p><p>Appendix G: Current state description of the process ...........................................................76 </p></li><li><p>1 </p><p>1 Introduction </p><p>1.1 Background </p><p> Panalpina 1.1.1</p><p>Panalpina is a global shipping company with around 15 000 employees worldwide, represented with offices in more than 80 countries. The head office for northern Europe is located in Gothenburg, Sweden and has 40 employees. Approximately 20 employees are working directly with the day-to-day operations involved in shipping; air freight as well as ocean freight, import as well as export. </p><p>Today Panalpina has an internal continuous improvement program called PanCIP, containing elements from both Lean and Six Sigma. The goals are, among others, to move away from a fire fighting modus and standardize the way the company works with improvements. This includes involving every employee by performing daily improvements on department level. This project is partly derived from the PanCIP initiative, where identifying problems as well as improvements is central. </p><p>Global benchmarking within Panalpina shows that the productivity of the six employees at the Ocean Import Department in Gothenburg is quite moderate, at the same time as they are experiencing a high workload with much stress and a high pace in the daily work. Since the company previously has tested some Lean and Six Sigma tools it was decided to investigate how these concepts could be used to decrease the workload on the employees by raising productivity and the quality in the processes. To ease productivity benchmarking and process analysis Panalpina has developed their own Process Measurement Tool, which was thought to provide data to different Six Sigma tools. Lean was included since the initiative is well known for raising productivity and quality through focus on customer and reducing waste among other things. </p><p> Problem Description 1.1.2</p><p>Today there is a global way of working within Panalpina, associated with a standardized way of measuring efficiency in certain activities. Through international comparison with other Panalpina offices, the Gothenburg office has realized that there is a need for improvements in efficiency, since the number of handled shipments per employee is too low. At the same time, the operators are experiencing a very high workload; therefore there is a need to improve the way of working. </p><p>There will be a change in business system within Panalpina, from FOS to SAP TM in a couple of years. Therefore the local office is interested in a Lean Six Sigma improvement project for several reasons. Apart from raising productivity, a successful Lean Six Sigma project will provide a good analysis of the current state as well as the state after the improvements are implemented. A thorough description of the current state and the existing problems is an important delivery of a project like this, and suggestions about where to start with solving them will allow the company itself to start solving the problems with a longer timeframe in mind. This will create a stable growing ground for continuous work on improvements after the end of this project. This analysis of the current state will also serve as a foundation for benchmarking of SAP regarding efficiency. Thus there will be a possibility to compare the current state with an improved state and finally the future state with SAP. </p></li><li><p>2 </p><p> Sustainability 1.1.3</p><p>A Lean enterprise is working in an efficient manner with as low volumes as possible of created waste, both regarding it...</p></li></ul>

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