The project is based on a medical device outsourcing company in the US. In 2018 the company added a 44,000 sq ft new warehouse. With the scales of growth and market competition, it has come to a need to optimize production capacity to achieve 98% monthly on time delivery target. Optimizing production capacity comes with efficiently managing operations that impact overall product lead time. A primary factor that impacts the overall product lead time is production preparation time. Production preparation time is impacted by lead times of 3 operations managed by the new warehouse - Receiving Inspection, Incoming Inspection, and Material Packing Operation. In fact, material packing operation is impacted by lead times of receiving and incoming inspections, since material packing does not even start for a part number until its receiving and incoming inspections are completed and parts are transferred into a warehouse storage bin. Therefore, it is critical to efficiently manage product lead time from receiving inspection to bin storage to achieve 98% monthly on time delivery target. There are no current company projects that focus primarily on the product lead time from receiving parts to bin storage. As a result a project was defined and carried out to evaluate per lot total lead time from receiving parts to bin storage in the new warehouse. Current process flow from receiving inspection to bin storage was traced, a process flow was developed, cycle times of all process steps were recorded and a current value stream was developed. Based on current value stream total lead time of 12.5 hrs, a goal for total lead time per lot was set at 60 minutes or less. For current value stream map analysis lean based and quality-based metrics were defined, and kaizen bursts activities were identified in regard to lean and quality metrics. Kaizen burst activities were used to craft improvement opportunities, where they were incorporated into a new process map called, future value stream map. Future value stream map was developed with predicted cycle times on identified improvement opportunities and it was analyzed with respect to lean and quality metrics. Upon analysis, future value stream map was predicted to reduce labor cost by $5.72 per lot. This predicted annual savings of $228,890. Labor cost savings were primarily contributed by value added and non-value added work load reduction of receiving clerks followed by that of Quality Inspectors. Total lead time was predicted to be at 739.6 minutes, 10.7 minutes reduced per lot from current process. Total lead time without supplier or quality waiting times (effective working time) per lot was predicted to be 58.6 minutes, which met the target lead time of 60 minutes or less. That was a 5.7 minute time reduction per lot inspection from the internal (company) current process itself without any regard to external (supplier or quality) waiting times. 90% of total lead time included supplier waiting time. Therefore, total lead time in the future value stream map could be further improved if supplier waiting times were significantly reduced which would lead into achieving total lead time target of 60 minutes or less.
Date of Degree
Master of Science (MS)
Automotive and Manufacturing Engineering Technology
Science, Engineering and Technology
Perera, P. (2018). Inspection Process Flow Development for a Warehouse [Master’s thesis, Minnesota State University, Mankato]. Cornerstone: A Collection of Scholarly and Creative Works for Minnesota State University, Mankato. https://cornerstone.lib.mnsu.edu/etds/839/
FINAL VSM_calculator.pdf (240 kB)
Final VSM Calculator
Future VSM.pdf (97 kB)
Process Flowchart.pdf (112 kB)
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