Monica Estrada Nuñez

Six Sigma, Green

Belt

Standardized Planning

Codes

1

The Maintenance Department can not anticipate which

vendors will come in to conduct work until 72 hours before

expected

Annually, this inability to forecast incoming costs, regardless

of a robust scheduling program, contributes to $10M over

budget

Problem Statement

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Work Process AnalyzedOUTPUT

Completed Work

Timing

Changes in Schedule

Execution Administration

Things Affecting Work

Execution (INPUTS)

Budget

Labor

Equipment

Materials

Engineering

Inspection

Priority of Work

Availability of equipment to

be worked on

Processes

Planning

Scheduling

Approvals

Procurement

Project Plan

Identified basic infrastructure opportunities in Planning and Scheduling Process

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40 day sample of scheduling data used for evaluation

Planners surveyed on vendors they use for each resource

code in the sample

Actual Work Order costs referenced back to sample

schedule data

Methodology

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Current Vendor Configuration

23

8

23

37

0

5

10

15

20

25

30

35

40

Single Vendor Codes Multi-Vendor Codes

Resource Codes - Vendor Saturation

Resource Codes

Vendors Represented

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Single Vendor

Codes

Multi-Vendor Codes

% Vendor Forecast Uncertainty

Vendor Uncertainty

• Multi-Vendor codes increase uncertainty by 78%, and limit ability to identify which

vendors will be on-site

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SV work consistently costs less than MV work

Zeros omitted from cost averaging because we are targeting the costs of work orders which are in progress, or completed, but have been rescheduled historically

SV Reschedule Average: $3,850

MV Reschedule Average: $9,460

Actual Cost for Single vs Multi-Vendor

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At 79% efficiency, vendors under multi-vendor codes are POTENTIALLY costing our system an average of $47,000 in actual, un-forecasted costs

This is compounded by a 78% uncertainty on which vendors will be on-site on a week-to-week basis

For the 40-day sample, this represents an accepted risk of $4.5M efficiency loss, or $23.6M for the year

Conclusions

9/4/20158

At 92% efficiency and only half the reschedule rate of MV codes, SV code-based work orders present an efficiency risk of only $8,400 per work order. Moving MV codes to a SV infrastructure would require minimal effort, and provide the following benefits:

100% forecast ability per vendor on any timescale

Ability to identify vendors with high reschedule rates

Budget forecast control

Pre-emptive cost control

Recommendations

Align Planner standardized code use

In an effort to reduce redundancies, loss of time, employee frustration, inaccurate cost forecasting

If the process is not improved - $10M is incurred in costs, unnecessarily

The Process Improvement impacts:

Aligns Budgets and Applies Controls

Improves Business Processes

Aligns Resources

Path Forward

9/4/20159

Business process – Lack of standardized code use

$10M in costs are associated with this flawed business process

Process waste includes:

Lack of clarity in use of vendor codes

Short time to coordinate employee resource schedule

Lack of clarity for schedule due to short schedule horizon

Increased employee confusion

Purchase Order confusion and inaccurate entries

Process Waste and Costs

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Steps:

1. Obtain Management Approval for Change

2. Review and Update Codes, Accordingly

3. Develop Communications

4. Partner with SAP Administrator

5. Develop Job Aids

6. Advise and Train Employees

7. Implement Plan

Process Improvement Next Steps

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What will it cost to make the changes?

½ of 1 FTE (20 hours), in addition to engaging IT, Department Leads, Corporate Communications and Training

What steps need to be taken to make the changes?

1. Standardize Planning Codes

2. Update SAP

3. Develop and Deliver Communications

4. Develop and Deliver Employee Job Aids

5. Develop and Implement Employee Training

Process Improvement Recommended

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2015 Quarterly Process Improvement

Implementation Schedule D

MA

IC P

roc

ess

Define Measure Analyze Improve Control

Revisit Plan in 2016

Issue identifiedData collected & analyzed for cause and effect

Eliminate causes & determine effects

Monitor system

Key Stakeholder Role

Sponsor Planning Supervisor

Champion Division Manager

Change Agent Scheduler

Targets/Stakeholders Planners

Key Stakeholders

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Identified “Pros”

Increased accuracy of vendor resource forecasting

Reduced field supervisor process flow frustration

Reduced follow-up time

Omit negative business and process impacts

Improved Purchase Order accuracy and billing

Recapture $10M over multi-year schedule

Sell the Idea

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Questions