VIETNAM NATIONAL UNIVERSITY OF HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY NGUYEN THUY LINH IMPLEMENTATION OF DMAIC METHODOLOGY FOR REDUCING THE SCRAPPED MATERIALS IN AN ADHESIVE MANUFACT
INTRODUCTION
Overview
Manufacturing industry is one of major parts, which contributes to thrive the economy, create employment, and drive innovations not only of developing countries but also developed ones Furthermore, it has to be mentioned about the significant contribution of small and medium scale enterprises (SMEs) towards financial development [1] According to the statistical results from Vietnam Ministry of Planning
& Investment in 2021, SMEs accounted for 97% of over 800,000 operating enterprises and contributed 45% of GDP with 5 million positions for employees On the other hand, it is observed that the productivity performance of these businesses is somewhat unstable and poor As the results, defects and non-conformance materials sharply increase and impact directly on revenues and environmental sustainability Although industrialization is important for the economic growth, it cannot be ignored the negative effects on environment [2] Moreover, sustainability has become one of vital customer requirements and a competitive perspective among businesses recently [3], therefore, they are paying attention to look actions of reducing scrapped quantity as well as cost and increase efficiency
In fact, adhesive components play necessary parts in most of manufacturing industries including woodworking, packaging, automotive, fashion and footwears and so on [4] The huge demand generating from these industries is not only a chance of aiding but also a challenge of the adhesive market This is because, if every product does not meet the high standard and demand from customers, the non-conformance is created Meanwhile, adhesive manufacturing companies specialize in chemical adhesive products, which is paid high cost and efforts to treat wastes [5] In other words, beside the loss of benefit, companies also face the financial issues of disposal cost and legacies of environment protection Therefore, this study focused on one adhesive manufacturing
2 company, which is located in the South of Vietnam This factory is facing familiar issues others in the same business area such as high quantity of scrapped materials, large disposal cost and unstable process control Besides, competition among this company and competitor is very high, especially about the market share, therefore, sustainable strategy is one of their priorities in the period of 2023+
Six Sigma in general and DMAIC in specific are well-known as effective methodology for quality improvement and waste elimination [6] Meanwhile, scrap in the production process is defined as part of production that cannot be accepted as final product due to the production failure, and it is still classified as waste Therefore, it is potential to use a tool of Lean Six Sigma (LSS) to decrease the scrapped quantity This is the reason why “Implementation of DMAIC methodology for reducing the scrapped materials in the adhesive manufacturing company” has been chosen as the subject in this research.
Research purpose
This paper is presented a DMAIC project, undertaken within a company for production adhesive products, which deals with identification and reduction of scrapped materials generated during processes By this way, project’s value contributes to save costs, bring company’s profit, increase business margin and achieve sustainable strategy.
Research content
The study has following research contents, which would classify into three assumptions as:
- Identify which process parameters/ factors affect the scrapped materials, and variations in the process due to the existing measurement system
- Determine potential root causes creating scrapped materials
- Recommend actions and control plans to optimize process and monitor the quantity of scrapped materials.
Scope and limitation
Due to the limited capability when collecting and analyzing data from the company, this project has the researching scope and limitation as below:
- Research object: Adhesive manufacturing factory is located in the South of Vietnam
- Product: all materials are used and controlled at plant
- Research data: all data is collected from Jan to Dec 2022.
Thesis structure
The thesis structure includes five parts as below:
LITERATURE REVIEW
Six Sigma
In the mid-1980s, a statistic-based methodology was proposed by Motorola with the purpose of improving the process performance and reducing operational cost, which was call Six Sigma This methodology is simply defined to reduce defects via identifying the roots of variation, eliminate them and proof errors impacting on processes and focus on the whole-hearted satisfaction of the customer [7] In 2019, A Maged et al proposed Six Sigma approach into plastic injection molding, which is consider as one of the challenging processes to meet the requirements of good quality and low cost [8] The quality of finished good increasing from 4.06% to 4.5% and the cost of poor-quality decreasing by 45% are the positive results they obtained after researching In another research of Guerrero and colleagues in a Wood furniture firm from USA, implement of six sigma helped to reduce the defects up to 25% along with reduction in waste by 13% [9] Furthermore, Antony et al also proved the positive effect of six sigma in their study of three kinds of firm [10] In particular, commonly used tools such as SIPOC, fishbone diagram and hypothesis testing contributed to the improvement of their customer satisfaction, return on investment and product quality
Beside aforementioned benefits, problem solving by using the concept of statistical thinking could also gained from the application of Six Sigma [11] To illustrate this point, in the research in 2016, Lameijer et al pointed out that dimensions like TQM, improvement strategies and HRM affected strongly to employees’ attitude [12] Moreover, during the utilization of Six Sigma in this research project, several tools and techniques were employed Consequently, knowledge and skills of the people involved in the project would be enhanced.
DMAIC cycle
DMAIC is one of major improvement methodologies in Six Sigma The DMAIC model refers to the five interconnection phases, which helps organization to solve the
5 problem and improve their processes’ performance The detailed DMAIC cycles was defined shortly by Dale et al as below [13]:
- Define (D): The problem and requirements of the customers are explicitly identified The define phase sets the expectations of the project’s improvement and maintenance of focus on Six Sigma strategy on customers’ requirement Furthermore, Project scope, team member’s role, and the object of project are well defined in this stage
- Measure (M): In this phase, the teams will take a snapshot of the existing processes or product using data analysis The current system will be measured using a variety of metrics
- Analyze (A): The Analyze phase of DMAIC helps project teams identify problems in the production process that cause product defects This phase of Six Sigma methodology is loaded with tools to help spot the problems in the production process and to determine if these problems are the root causes of defects
- Improve (I): This phase focused on determine a solution which is based on the uncovered problem in the first three phases Experimentational and statistical techniques to generate enable improvements solving problem or defects are applied
- Control (C): This is the fifth also a final phase as well within the DMAIC process The main activity in this phase is to control the improved process In other words, the control phase is about ensuring that the new process is implemented and do not revert to old ways.
Recent Studies
A large number of research studies highlighted the success of DMAIC application in the context of manufacturing in general and in the aim of reducing scrapped rates in specific In 2016, Tiwari et al developed a model to optimize the process parameters and eliminate the casting rejection in Indian foundry industry [14] The results showed that after the implementation of DMAIC, the rejection rate reduced by 25.44% In addition, response surface methodology – one of the techniques in DOE - was employed in the
Improve phase to develop an empirical model, which correlated the casting process variables with the desire’s quality characteristics In another study, by using the DMAIC approach in the glass manufacturing section, Yadav and coworkers also achieved 93.57 percent yield compared to 88.4 as before improvement [15] Detailly, after identifying and setting target of reducing the defects as per management target, all inputs and controllable data are collected to identify process gaps and probable causes are found via cause-and-effect diagram in measure phase In the analyze step, their implementation of cause-and-effect matrix, statistical and hypothesis tests supported to funnel critical root causes Next, DOE is applied to find the optimal parameters setting for each defect, which are controlled well in the control phase
Meanwhile, scrapped elimination has attracted attentions from researcher Recently, a case study published in March 2023 showed that DMAIC cycles and six sigma tools contributed to obtained 90% of reduction in the number of wastes in the assembly process of refrigeration appliances [16] According to the conclusion of Ioana et al, reducing variability and enhancing process capabilities show that productivity has grown a result of removing the scrap-causing variables The research case study taken place in a water bottling factory in Greece of Panagiotis at el also was successful in decreasing the scrapped bottles via approaching DMAIC [17] In fact, their project improved the loss rate significantly from 0.5% to 0.2% This gives a yield of 77.78% which corresponds to the sigma level of 2.26 against old level of 1.6
METHODOLOGY
The approach and methodology following by DMAIC cycles has been shown in Figure 3.1 as below:
Refer literature reviews and previous studies
Define the research target and limitation
Measure the impacts of input factors on research purpose
Identify the problems in the process
Determine the root causes of defects
Verify and valid the effectiveness of solution
In particular, every single step is described detailly as followings:
The main purpose in this step is to understand object, define the problem need to be solved, set up the target and find out the research limitation
- Study the object: Collecting basic information of research object and understanding properties and characteristics of process and production system are the foundation to give effective solutions and improvement plans And these solutions are suitable and feasible to the nature of object
- Define the problem: Combining the VOC/ VOP analyze and pareto chart supports to define the problem as well as specific the scope of projects For collected data, it is confident and convinced the reason why this project should be started and implemented at the current time Furthermore, SIPOC is also a tool, which is applied in this step As the outcome, key metrics of processes are deeply understood, and team is established based on it
- Study literature review and related research: after identifying exactly the problem company is facing as well as main focus of study, it is necessary to learn deeply and find knowledge background, literature review and the way how to apply tools Furthermore, it is important to refer other previous case studies, which supports to understand how DMAIC cycle are implemented successfully
- Target setting up: This step sets up the target for the research The target should be clear, actual, measurable, and evaluable
- Define the scope and limitation: There is a variety of factors impacting to research object, therefore, project is well defined to conduct in specific conditions, scope and limitation
Expectation results: General information of research object, the urgency of conducting the project and the plan of research implementation
Measuring indexes to evaluate the current status and finding out input factors impacting significantly the problems are the main aims in this phase This is crucial to be clues and foundation to conduct next step
- Measure to evaluate the current status: Evaluating the problem is expressed via measuring indexes such as scrapped rates, process capacities, defect ratios, …
- Find the clues: Based on process mapping, the logic and flow of materials are revealed and understood Input variables are classified into controllable (C) or uncontrollable (U), which support to start the Cause-and-Effect Matrix (C&E matrix) Next, C&E matrix narrows down and prioritizes input factors having the strong relationship with output variables (issues) Those factors would be identified as clues causing problems directly and keep to be analyzed next
Expectation results : Status of current scenario is identified and clues contributing to problems are measured and determined before moving to the next step
In this phase, finding out root causes of problem is the main requirement Ishikawa (fishbone) and 5-WHY methods are the popular technique in problem solving and root causes verifying, therefore, they are also applied in analyze phase In addition, if necessary, it is also recommended collecting more data and applying data analysis tools to clarify the problems and their root cause as well Real data also support to increase the convince level from others
Expectation results : Main factors and root causes causing the problem are well defined
Based on the identified root caused at Analyze phase, solutions and improvement ideas are discussed and proposed in this phase Improve process, re-design and standardize work instruction are potential approaches to eliminate defects and decrease the scrapped rate Application of DOE in this phase is useful to find out critical conditions and optimize the process After implementing improvement actions, it is important to check the effectiveness and feasibility of plan Comparison between before and after improving or hypothesis testing are effective methods applied in this phase
Expectation results : Feasible solutions are given to solve the defined problem
The main purpose in this step is to build the plan to maintain positive results after conducting improvement
In conclusion, Chapter 3 described specifically methodology to implement this study successfully The details of these activities are presented in the following sections of this research According to orders, the define step on next page would show the approaching way to objects, establish supporting team and set up targets
DMAIC APROACH
Define phase
This case study deals with reduction of scrapped materials in an adhesive manufacturing company, which is located in the South of Vietnam This company provides a variety type of glue applying in many fields such as fashion and sport industry, packaging, consumer, metal products and so on
The business strategies are made to order (MTO) and made to stock (MTS) For some special items there is the hybrid of two models They supplied for both domestic customer and exported ones as well like Thailand, Indonesia, etc
Water-based adhesive and Solvent-based adhesive are two main products manufactured and traded in company Furthermore, hotmelt adhesive has accounted for the major consumption but it is imported into Vietnam Figures 4.1 displayed three main kinds of product, which are being monitored in the researched factory
Besides, System Analysis Program (SAP) and Manufacturing Execution System (MES) have been used in this company to monitor customer’s orders and material flows to production and delivery schedule However, during daily operations, there are some problems and struggles appearing and presenting, which have impacted significantly on the profit and margins, and created waste as well Meanwhile, sustainability is set up as key strategy to focus and thrive the business (Figure 4.2)
Figure 4.2: The strategy of research company in 2020+
Therefore, reducing the waste in general and decreasing the scrapped materials in specific are defined as the appreciated project to contribute directly to company’s vision
4.1.2 Overall procedure of materials flows
In this research, scrapped materials are not only defined as defected products, but also focused on non-conformance materials and exported good Therefore, every part in the supply and operation chains could generate waste if it is not monitored well So, the supply chain and production process are combined and described generally in the diagram below (Figure 4.3):
Figure 4.3: The overall procedure of material flow
In the process, depending on input data of customer order and forecast, Material Requirement Planning (MRP) system and planners analyze and finalize the quantity of raw materials or trading goods need to be bought Then, raw material orders are built, and suppliers ship ordered shipment to company
Whenever raw materials are available at the in-coming gate, Quality Control (QC) technicians pick samples and perform tests If tests are failed, this shipment is proceed followed by Supplier Complaint Management System (SCMS), which supports to handle failed shipment and find the way to improve with suppliers On the other hand, the received quantity of raw materials is stored in warehouse if all required properties of materials are qualified
Before production, materials providing to production order are prepared through picking and staging steps In this case, prepared materials are followed by First Expire First Out (FEFO) logic All available components are weighed and transferred to production floor by forklifts
RM/ TG receipt RM in-coming test Storage
MRP RM/ TG plan order
Batching production is conducted with the MES implementation Depending on the type of finished goods, production technologies are mixing, reaction or cooking with specific conditions At the end of manufacturing process, operators pick sample for QC to inspect Like which happens at incoming gates, if tests are passed, this batch is confirmed to fill and store at warehouse However, failed testing results give unsuccessful batch and move to Non-conformance Management and Review system (NCMR) In which, solutions and decisions are made after discussion, and two main popular ones are reworked and scrapped There are not only are failed batches which are created in production but also in other workstations such as warehouse or customer sites with the failure modes of expiry, damage logistic or quality issue Furthermore, those material always jump into NCMR and are handled in there
As a part of define phase in DMAIC methodology, historical preliminary data were collected to define the size and nature of the existing problem The records of the scrapped materials in the 2020 – 2022 period were collected in Table 4-1 According to the data, although the percentages of waste were quite stable during the given time around 0.14%, the quantity increased significantly As the consequence, the cost for disposal and business margins were impacted sharply, moreover, the sustainability strategy was affected seriously In particular, scrapped materials in 2022 (including Finished goods, Semi-finished goods (SFG), Trading goods and Raw materials) were recorded with total quantity 70.51 tons, and the total impacted value is 215.5 TEUR Furthermore, few customers rated company has not been able to meet their requirements about sustainable production
Table 4-1: Scrapped materials in the 2020-2022 period
Not only refer from the voice of customer, voice of business and voice of process were also listened and recorded through brainstorming All critical requirements are shown in Table 4-2 Therefore, it need to be implemented to enable high goal of waste reduction by using a powerful methodical technique such Six Sigma
Table 4-2: Summary of VOC/VOB/ VOP
Voice of customers Customers need vendors having the strong sustainability strategy and green production
Voice of business High volume of scrapped materials contributes to processing and disposal costs, which impacts directly to organization’s benefit and business margins
Voice of process Increase the workload to handle scrapped materials, which effects on processing time and labors Moreover, it is consumed cost and resource for inventory, which is used to contain scrapped materials
The SIPOC diagram prepared for this project by the project team can be seen in the Figure 4.4 This is a high-level process map was created by brainstorming session to review the relationship among process, suppliers, and customers Furthermore, it also
16 provided the background and information to build the effective team, which helps to ensure that the problem will be revised and solved perfectly with all aspects (shown as Figure 4.5)
Figure 4.4: SIPOC diagram for materials flow of process
Figure 4.5: Project Team Structure and Functions
To ensure that the research is in control and focuses on the project problem explicitly, the boundary of the project also had to be defined and clearly indicated For this clarification, project charter is used to summarize the project’s scope, boundary,
VOC/VOB//VOP, goal and team’s role in this research project This project charter is presented in Table 4-3
Measure phase
As shown in Figure 4.6, although the number of materials scrapped every single month is still in the control limit, the moving ranges have big variances The average value is 5,875KG/ month and it is considered as an alarm number
Figure 4.6: I-MR Chart for scrapped quantity
The inputs, actions and outputs of a process can be represented visually using a step- by-step process map The approach is clarified this graphical representation and illustrate description Furthermore, this graph also allows pinpoints controllable (C) and uncontrollable (U) inputs of process under study Those controllable factors are classified and brought to brainstorm with team to find out which one has significant impacts on the mentioned problems – scrapped materials Figure 4.7 below describes the process mapping of this study
Figure 4.7: Process mapping of monitoring materials
Causes and Effects Matrix is applied to evaluate critical inputs, which contribute significantly to output There are four main range rates from 0 to 9 Score 9 stands for the strong and direct relationship, while the opposite pattern is true for score 0 The moderate and low correlation is rated with 1 and 3 respectively [19] The Table 4-4 showed that there are 5 out of 45 inputs having the high contribute to the total scrapped quantity
Table 4-4: Cause and Effect Matrix
No Process Step Process Input Scrapped
- Right RM as PO requires
- Right Qty as PO requires
- A Kit of prepared RM with flags
- Returned/ extend SL RM/ TG
INPUT TYPE PROCESS OUT PUT INPUT TYPE PROCESS OUT PUT
3 RM/ TG plan RM order 3 27
8 RM in-coming test Sampling method 3 27
10 RM in-coming test QC inspectors 3 27
11 RM in-coming test Samples 3 27
14 RM/ TG Storaged WH operators 3 27
17 RM/ TG Storaged Storage procedure 3 27
19 Prepare RM for production RM 3 27
20 Prepare RM for production WH operators 3 27
21 Prepare RM for production SOPs 3 27
42 NCMR control Sale/ CS/ Production/ MM/
4 RM/ TG plan MRP data 1 9
9 RM in-coming test Testing method 1 9
12 RM/ TG Storaged Qualified RM/TG 1 9
13 RM/ TG Storaged Storaged conditions 1 9
15 RM/ TG Storaged Available Space 1 9
18 Prepare RM for production Facility (weight, printers, ) 1 9
Mixers, materials, defect types, material categories and storage location are chosen to check whether they are clues or not before moving to the analyze phase
The data collection plan is described detailly as the below table:
Related condition (Stratification factors) to record
Sampling plan Data collection format
Quantity (KG) of scrapped materials (RM,
FG, SFG and TG) in 2022
Convert SAP data to excel format
4.2.3.1 Impact of materials categories on Y
There are four main materials monitored and controlled in the factory such as raw materials, semi-finished goods, finished goods and trading goods By the rule of Pareto, it is seen that trading goods and finished goods have a significantly contribution to Y (Figure 4.8)
Figure 4.8: Pareto chart of scrapped quantity divided by material categories
4.2.3.2 Impacts of Defect types on Y
Figure 4.9 indicates that scrapped materials due to quality issue, expired goods and customer returns pose the heavy impacts on Y Other defected types also have contributed but they are not significant
Figure 4.9: Pareto charts of scrapped material divided by defect types
4.2.3.3 Impacts of Storage locations on Y
There are four warehouses built in factory Because most of material are stored at normal conditions (ambient temperature and ventilation), two big warehouses are built for them, where one is internal warehouse located inside the factory (5016) and the other is external warehouse (SJJW), which is outside Cool warehouse (S5P6) is used to stored raw materials and trading goods at low temperature The last one is sample warehouse (SJJX), in which adhesive samples are available for sales to pick and introduce to customers
Similar practice for two above factors, Pareto approach shows that the scrapped materials from internal warehouse (5016) and cool warehouse (S5P6) accounted for a major portion of the total scrapped quantity of factory, 58.7% and 25.7% irrespectively (Figure 4.10) Therefore, two kinds of those warehouses are chosen to analyze root causes and found the ways to improve
Figure 4.10: Pareto charts of scrapped material divided by Storage Location
4.2.3.4 Impacts of NC materials on Y
In 2022, it is recorded that there are 185 products scrapped with 291 batches, which is equal to 70.5 tons It means that not only the quantity of products, but also scrapped frequency for one item impacts on total scrapped quantity Therefore, impact of NC materials on total scrapped quantity is evaluated via its scrapped quantity and batches, and they have the same weight The score of each range is defined in Table 4-6 and Table 4-7 Based on the current data, it is divided into five ranges and scale from 1 to 5
Table 4-6 Rating score of scrapped quantity
Table 4-7 Rating score of number of scrapped batches
Table 4-8 The Score of Materials Impacting on Y
Weight of Number of scrapped batches
According to the score getting from the Table 4-8, there are two products contributing significantly on Y such as product 2141112 and 1877631 However, the former one has been stopped producing in the early of 2021, therefore, it is focused on product 1877631 - AQUENCE GL 92 ETICOL to analyze and improve
4.2.3.5 Summary of input factors contributing to Y
By applying C&E matrix and Pareto approach in the analysis, there are eight input factors have sharp impacts on the total quantity of scrapped materials They are:
- High scrapped quantity of Finished Goods
- High scrapped quantity of Trading Goods
- High scrapped quantity of Expired Materials
- High scrapped quantity of Out-of-spec Materials
- High scrapped quantity of Returned Materials
- High scrapped quantity of materials stored in Internal Warehouse (5016)
- High scrapped quantity of materials stored in Cool Warehouse (S5P6)
- Product 11338923 - AQUENCE GL 92 ETICOL has high scrapped quantity
In which, the Cool Warehouse (S5P6) is used to store Trading Goods in the factory, while almost 90% Finished Goods is kept in Internal Warehouse (5016) Therefore, four aforementioned factors are simplified into two ones as materials stored in 5016 and S5P6, and prioritized to solve in this study (Appendix A.2)
Furthermore, historical data also show that a majority of out-of-spec and returned materials, which were disposal finally, were stored mostly in 5016 and S5P6 Therefore, it is feasible to pay more attention to improve and control materials in both warehouses rather than focus on the defect as quality issue and goods returned
Table 4-9 Summary of clues having high contribution to Y
1 High scrapped of expired materials
2 High scrapped of materials stored in Internal warehouse (5016)
3 High scrapped of materials stored in Cool warehouse (S5P6)
4 Product 1338923 - AQUENCE GL 92 ETICOL has high scrapped quantity.
Analysis Phase 28 1 Analyze root causes for high quantity of expired materials 28
4.3.1 Analyze root causes for high quantity of expired materials
The diagram 4.11 below shows how the 5-WHY methodology was applied to find root cause of high expired materials at plant
High scrapped quantity from expired materials
It could not sold before expired date
It could not used up before expired date
It is impossible to rework expired goods
Phasing-out procedure was not followed as plan
MOQ is much more than quantity required to sell
It takes too much time to RW and clear stock
Product quality is very bad
No products is suitable and/ or available to rework
Information/ action were not updated on time
Ratio of RW is very small
It takes long time to implement guidelines
It will impact on quality with high ratio
Quantity of sale sample is much less than one packed
Remained quantity is not utilized effectively
There is no solutions on time
Sale sample is not reviewed and control frequently
A small quantity is enough to trial at line
No procedure to monitor to control
No clear MOC procedure to follow up
Figure 4.11 5-WHY Brainstorming root cause of expired materials
In total expired materials, it is accounted for approximately 75% of total expired material due to inability to sell before the expiration Moreover, the majority of this quantity is product 2141112 - LOCTITE AQUACE PR-607 After brainstorming and interviewing with process owners (including sales, customer service and R&D), it was planned to delete this kind of products and replaced the new better items, which would meet higher customer requirements However, COVID -19 pandemic explored, which impacted not only customers’ demand but also business of this company As the consequence, it was not able to sell and clear current stock within its shelf-life and finally scrapping decisions was made Currently, this item is inactive to trade, and the preventive plan to avoid similar problems in the future has been built by other team – Supply and Planning Therefore, it is necessary to continue mentioning in this study
In addition, rework was considered as a solution to solve the expired materials In this term, it is allowed to use a small portion of non-conforming materials into new production batch and ensure that all properties of new products are qualified and met customer satisfaction (Appendix D) However, the large quantity as well as the high risk of quality are reasons why scrapped quantity of expired materials is very high
The last 25% of total expired materials belongs to sale’s samples, which are used to introduce to new customers or try new applications for existing customers for widen market share It was requested a small quantity to pick out, and the remaining one was stored as warehouse The worst scenario (as disposal) occurred because sales cannot use up all requested quantity before expiry date while there is not procedure or work instruction to control remained goods after picking
Conclusion: Samples requested by sales for introducing or marketing were not utilized well before expiry date, which contributed a lot in scrapped quantity to expired This problem occurred because procedure has not been defined clearly with action owners, timeline, tasks and so on
4.3.2 Analyze root causes for high scrapped of materials stored in Internal warehouse (5016)
Table 4-10 figured out that quality issue is the main defected type for materials stored in Internal warehouse with around 50% For 12.15% return goods from customer, it was recorded that 84.61% batches were returned due to quality issue while the remaining ratio belonged to logistic and planner In other words, materials stored in the internal warehouse have serious problems about quality
Table 4-10 Classification of defect types and frequency for materials stored in the internal warehouse
No Defect types Frequency Percent
1 Out-of-spec/ Quality Issue 53 49.53%
Due to limitation of researching time, only quality issue was paid more attention to break out and find root causes under the ice (Figure 4.12) During the GEMBA walk, it is showed that there are no problems for the storage conditions Goods are kept at ventilate room, avoid sunlight directly and controlled temperature around 30-40 o C as SDS required Meanwhile, reports in 2022 recorded gelation is the popular issue for unqualified products Those products are classified to produce via reaction technology, which requires to control temperature, reaction time, components, and their specific properties to ensure reaction be occurred completely Unless those points are not
32 monitored correctly quality of products is affected seriously, specifically gelation (Table 4-11)
Table 4-11 Analyze of Defected Goods Manufactured by Reaction Technologies
Critical Control Point In Process Temp
High scrapped quantity from internal warehouse
No effective solutions to improve
Defect types was defined wrongly
Reaction process did not occur completely
Reaction process was not controlled well
No CCPs was well defined
No unique definition Root Cause
Figure 4.12 The 5WHY Brainstorming root cause of scrapped materials in Internal
Conclusion: Defining critical control point in process is very important to monitor the quality of product as well as detect any abnormal factors impacting on products quality In this study, products made by reaction technology were not determined control point in process, therefore, it was not able to ensure reaction occurred completely As a consequence, products become gelation overtime and could not be sold
4.3.3 Analyze root causes for high scrapped of materials stored in Cool warehouse (S5P6)
According to the Table 4-12, materials stored in the cool warehouse were disposed mostly due to expired reason (accounted for about 62%) Quality issue was not detected in this warehouse because in-coming test was not performed to check the quality inside products for imported products
Table 4-12 Classification of defect types and frequency for materials stored in the Cool warehouse
No Defect type Frequency Percentage
To define root causes, 5WHY methodology is applied to dive and discuss with multiple teams (Figure 4.13) It is reported that packaging problem such as torn bags, dent drums, and leaking, etc were detected when importing to Vietnam and they could not be accepted by customers (Figure 4.14) However, the lack of procedure to handling issue goods led them kept in warehouse for a long while until over expiry date
High scrapped quantity stored at Cool
They were dropped/ hit during storage
Quality of pack is not good
They were not delivered before expiry date
Damaged goods were not delivered
No solution to resolved damaged goods
Damaged good was not reviewed
Solutions for damaged good are ineffective
No required review by a cross functional team and source plant
Wrong loading method on pallets
No official SOP to solve damaged goods
Customers do not accept damaged goods
Figure 4.13 The 5WHY Brainstorming root cause of scrapped materials in Cool
Figure 4.14 Damaged trading goods when imported in Vietnam
Conclusion: Goods after importing to Vietnam have serious problems with packaging and could not be delivered to customers Because there is no procedure to solve similar problem, every single issue was not reported to source plants and other team to find the solutions Finally, products were expired and then scrapped
4.3.4 Analyze root causes for high scrapped of Product 1338923 - AQUENCE GL 92 ETICOL
AQUENCE GL 92 ETICOL is the main products in this company Particularly, the consumption of this product is in the top of seller every year and it is supplied for key customers and famous brands Therefore, any problems occurring for this production can lay the disadvantages on company’s images and can take a risk of loss market shares However, it is recorded that nearly 5,000 KG of AQUENCE GL 92 ETICOL were returned due to bad quality Customer faced problems of high viscosity and gelation for below batches they received (Table 4-13)
Table 4-13 Re-inspection results of issue batches of Product 1338923 - AQUENCE
This kind of product is produced by cooking process at 82 o C and combined to mixing during production process After raw materials are charged into the vessel, then they are heated by steam until reaching at require temperatures Cooking time depends on QC guidance, and this guideline was based on initial viscosity, which is measured before heating However, there are still big variations of control point in manufacturing as shown in Table 4-14
Table 4-14 Process Parameters of issue batches AQUENCE GL 92 ETICOL
For the same batch size and mixer, criteria for cooking process are significantly different, which lead qualities issue In other words, factors and conditions of cooking process for AQUECE GL 92 ETICOL are not optimized In addition, Ishikawa methods is also applied in this part to verify effects of other factors like materials, manpower, machine, measurement, and nature of weather However, there are no abnormalities found and they are mostly controlled well (Figure 4.15)
Figure 4.15 Fish bond Diagram for analyzing cause of high viscosity issue
Conclusion: Cooking process of AQUENCE GL 92 ETICOL is not controlled well and defined optimized process parameters This is the reason why its quality is not good and unstable overtime, and become serious gelation when using at customes
Table 4-15 below displays the summary of found out root causes and proposed improvement plans and tools as well
Root cause Description Improvement Plan
No procedure to control sale sample
No on-time solutions to solve the remained quantity of sale sample
Build Work Instruction (WI) to control sale sample
Tasks and person having responsibilities for is not defined specifically
Points (CCPs) for goods produced by reaction technology are not defined in process
Control points relate to products quality are not set up and control during production, which cause issues for finished goods
Review and define CCPs for reaction products
(SOP) to handle damaged imported goods
Timeline, person in charge, missions… are not defined when damaged issues occurs until they are expired and scrapped
Build the SOP to solve damaged goods
Source plants are not informed and involved for damaged issue, so there are not improvement plans conducting
Current production depends significantly on personal experience
Defined and optimized process parameter to get the most qualified products
Big deviations of process parameters causing the sharp instability for finished goods
Improve Phase
4.4.1 Build up standard operating procedure
Standard operating procedures (SOPs) are a set of step-by-step instructions compile by an organization to help workers carry out routine operations [20] It supports for owners understand their job, the way to perform tasks correctly, and so on In fact, taking studied object in this research as a pilot, because there are not SOPs available in the
39 process, quantity of waste generated from its process is huge and alarmed Root causes have been defined after finishing Analyse phase, it is necessary to focus on building up SOPs for below processes to elminate wastes :
- SOP to control sale sample
- SOP to solve damaged imported goods
4.4.1.1 SOP to control sale sample
The Figure 4-16 showed the procedure monitoring the flow of sale samples
Figure 4.16 New procedure to control quantity of sale sample
- Finished goods is released to use after sales requested sample Remaining quantities are kept in warehouse for the next requesting time After a half of total product shelf-life, remaining quantities are blocked due to potential degradation of quality SAP supports to move materials into block stock automatically at the defined time
- For the quantity in block stock, Quality technician (QC) inspects all properties to determine rework ability This step has to be conducted carefully because the remaining quantities have been opened for a long while and quality can be degraded over time In the worst scenario, product quality is impacted directly when using these parts into new production orders
▪ If it can be combined in new batches, solutions are implemented at production floor And then, QC inspects production quality before delivering to customers During this time, a part is kept as retained sample to follow up products’ stability and detect abnormalities
▪ If it cannot be combined in new batches, those quantities are scrapped and it is investigated to avoid similar problems occurring
- After a process changes, there are some positive results getting and displayed in Figure 4.17 In which, the standard deviation was reduced significantly by 92.9% from 255.39 to 40.474 after improvement This is because this process was controlled and reviewed every single month Besides, the scraped quantity does also decrease sharply from 3,352.5 KG in 2022 to 730.75 KG, which is calculated until November 2023
Figure 4.17 I-MR chart of Scrapped Quantity of Sale Sample Before and After
Although aforementioned solution has contributed directly to margin and eliminated waste in process, there are some risks appearing as below:
- Quality issue of new products: combining non-conforming products into new production order is going forward to potential risks like bacteria contamination, out-of-specification, and so on
- Create extra activities: New process requires to invest human resources, cost and time to ensure effectiveness and efficiency of works
However, both risks are assessed as low potential risks and reasonable solution comparing to actual benefit received in 11 months in 2023 In conclusion, this process was approved to apply officially in factory
4.4.1.2 SOP to handle damaged imported goods
The main purpose of this procedure is created to define necessary process, which provides guidelines and solutions for a goods that its packing is damaged, leaked or/ and not meet customers’ requirements The specific procedure is described in Figure 4.18
Figure 4.18 New procedure to control quantity of Non-conformance Trading Goods
- Packaging issue can be detected by logistics team, quality team, sales team, forwarder, …
- Block and isolate: Issued packaging product shall be moved to block stock by
Logistics or quality team, and then Logistics team will isolate physically to prevent un-expected usage This task should be done within two hours from detected point of time
- Notice to Quality: Logistic head shall inform to Quality Head that the issue will be decided to repack or not And then, CCMS shall be raised to source plant for investigation and improvement
- Review and check: QC will inspect the issue goods and consider the ability of repacking goods If goods cannot be repacked, it is informed to source plant for asking returned or scrap decision
- Align with source plant and Business: Supply Chain team of received plant will communicate to source plant to get new packaging same as original one and label to conduct repacking If the source plant could not provide packaging or/and label with timeline as required 02 weeks preferably, received plant will replace new packaging and label Then, this packaging and label will be sent to source plant by soft copy to align and confirm before repacking In addition, repacking solutions are aligned and accepted by business team before conducting the next step
- Repack: o Solution shall be aligned with Quality head and documented to sure the implementation is done fully following given solution o It could be taken place by Logistic team and external warehouse if product is located in external warehouse In case of it is repacked out at External warehouse, Logistic team must assign personnel to supervise and send repacking report to QA head to approve Pictures of product after repacking shall be enclosed for refer
44 o It could be taken place by Production team if product is located in internal warehouse o Hygiene and mix up maters shall be highly considered to implement by Supervisor of in charge team Product name, IDH code, batch number…must be checked and noted in given check list o Do not allow to repack outside warehouse or production plant o At same time and same area, just only one product batch is allowed to process o Try to copy as same as possible to original packaging and label is strictly prohibited
- QC check: after re-packing, QC team will double check to ensure of doing right as given solution otherwise QC team will ask for re-do until confirmation Checked points are packaging shape, clean, tape, label position and direction, unit packages per pallet, palletize… The same checked points if it is taken at external W/H
- Align with customer: for repacked product batch, a notice letter from Quality head will be sent to customer thru Sales team or/and Customer Service team if we have agreement with them on this or/and this is one of their requirements which are save on “Customer requirement database”
- Usage decision SAP: After alignment with customer, QC team will remove from block stock to UU to sell products
Control Phase
Improve phase helped to reduce waste and improve product quality by conducting action as mention above, however, to maintain those positive results, it is nessessary to create control plans to monitor processes and control parameter This step is crucial because it ensure the defined problem not back to the old way
To eliminate waste due to expired and damaged materials, two procedures have been created and applied The next step is documentation current practices, and then
53 conduct training courses for process owners and operators to ensure full understanding of new process Figure 4.27 is the template of official work instructions which was created to provide enough title, version, description, … The meaning of version can be seen as a reminder to looking back the process to have an effectiveness check after a specific time In particular, at beginning stage, this procedure is evaluated after every 3 months, and then there is an annual update Moreover, work instructions are available on Document Integration System as live documentation, and sticked on Information Board at workplace for employees to look for easily
Figure 4.27 Template of Non-conformance Traded Good Handling Process
Furthermore, to monitor monthly scrapped quantities, it is proposed the list materials need to be disposal to update the status on time, which can be referred in Figure 4.28
Figure 4.28 Disposal report in Arp 2023
One of the most effective ways to eliminate quality issue for products is finding exactly root causes and performing suitable corrective and preventive actions Therefore, 8D template report is issued to solve and record every single problem (Figure 4.29) This report was only applied internally, but also shared with source plants and supplier for defected goods imported to Vietnam
Figure 4.29 8D report template for problem solving
As mentioned in the improve phase, CCPs were set up and displayed on MES screen for operator to follow Those points are tracked and checked every batch produced (Figure 4.30) Moreover, to control the stability, the viscosity is measured and followed weekly within one week since manufacture date Table 4-18 is an example of following form for AQUENCE GL 92 ETCOL
Figure 4.30 Process parameters (temperature and speed) for batch produced in Aug
AQUENCE GL 92 30KG ETICOL Batch N433395119
Table 4-18 Stability report of AQUENCE GL 92 ETICOL
CONCLUSIONS AND SUGGESTIONS
Conclusion
This work is attempted to reduce scrapped quantity for material defects in supplied chains whose scope is from purchasing materials to producing and shipping to customer Scrapped materials are defined as a waste impacting directly on production cost, benefit, business margin and so on By a scientific approach, the study identified root causes and carried out implementation plans to solve the defined problem This study also built a diverse set of solutions with multi-dimensional perspectives, which were contributed ideas from different team Lean tools were applied flexibly to bring positive results and meet the goal of decreasing waste appearance and improving product quality
Starting from the current process, this research pointed out symptoms of problems, and analyzed reasons causing the high scrapped quantity of materials monitored in adhesive technology company Proposals and solutions for new procedure helped to reduced 70,5 tons of disposal quantity in 2022 to 50,7 tons updated to Nov 2023 (decreased by approximately 28%) Figure displayed summary of scrapped disposal quantities for every month These numbers were contributed from many attempt sources and departments; however, this research also has positive impacts on this bright outcome
Figure 5.1 Summary quantity of scrapped material YTD Nov 2023
To eliminate quantity of expired materials, which have to be scraped, the new procedure is recommended and documentation The procedure helps to define responsible person in charge, tasks, timeline, … when monitoring that item Therefore, collected results are great positive by decreasing from 3,352 KG in previous year to 730,75 KG in 2023 Given results indicated that DMAIC approach was applied successfully and bright significant savings for company
About the goal of reduction of materials in cool warehouse, the new updated work instruction created to support generate on-time solutions when issues occur Therefore, there was a drop in disposal quantity in cool warehouse to 28.8% from 18,090 KG to 5,224 KG This saving number proved collected benefit after applying lean tools in manufacturing sector
In addition, lack of critical control points is the disadvantage causing the high scrapped quantity due to quality issue Therefore, after identifying those factors and put them in control, issue batches as well as defected quantity after reaction production were
SUMMARY QUANTITY OF SCRAPPED MATERALS
59 eliminated in 2023 In other words, it is recorded that the quality of products made by reaction technology was very stable overtime Furthermore, Taguchi design is applied successfully to find the optimal parameters setting for defect of product AQUENCE GL
92 ETICOL Maintaining cooking process significantly improved stability of mentioned product, and there are not scrapped batches in 2023 as recorded data showing Beside contributing directly to purposed of waste reduction, quality improvement also increase the level of customer satisfaction
To sum up, DMAIC is significant for improvement in the existing process In particular, by the application of different improvements in diverse aspects, the goal of decreasing scrapped quantity of materials and waste in process that this study initially proposed has been achieved.
Suggestion
This study determined that DMAIC is the effective method to reduce waste and scrapped materials in operation process in an adhesive manufacturing company There are significant positive results collected after completing project, however, some suggestions need to be proposed due to limits’ presence
First of all, quantity of scrapped material recorded every month still has a high fluctuation, even though the average number is much lower In fact, new work instructions applying in warehouses and critical control points setting up in process helped to reduce defected materials, however, some other aspects like over-forecast, low demand, and so on still contribute to the total scrapped numbers Therefore, it is recommended to apply DMAIC cycle to those processes to reduce scrapped materials Besides, this project contributed mostly to cost savings and economical issue of company, for sustainability like environmental protection The impact still need to be clear, therefore, it is recommended to collect more data about waste disposal and compare to scenarios before improvement to evaluate the effectiveness of project
In addition, despite of benefits from new work instruction at warehouses, it requires investment about human resources, time, and cost to implement Therefore, cost balance is suggested to calculate after a period to ensure a feasibility of improvement
Finally, the research indicates that Taguchi design is suitable to optimized multi- variables in production processes with limited experiments and short time This method also supports to eliminate defected products after manufacturing process So, for quality improvements, it is necessary to apply Taguchi when finding best production conditions of other products
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APPENDIX A Statistic of Scrapped Materials in 2022
Table A.1: Summary of scrapped materials (Kg) in 2022
Raw material SFG/BULK Total
Table A.2: Summary of scrapped materials stored in warehouses in 2022
APPENDIX B Taguchi Design and collected experimental results
APPENDIX C Statis of Scrapped materials after improvement
Table C.1: Summary of scrapped materials (Kg) YTD November 2023
Raw material SFG/BULK Total
Table C.2: Summary of scrapped materials stored in warehouses YTD November
APPENDIX D Handling Procedure for Non-conformance Materials
Step time, #day Flow PIC
6.0 15 days (not too valid time) Processor
Evaluate for solution of rework