Reduced Turnaround Time And Improved Processes: A Continuous Improvement Plan For Latino Engineering

Challenges faced by Latino Engineering

Question:

Disacuss About The Reduced Turnaround Time Improved Process?

An investor organization recently acquired engineering equipments manufacturing organization called Latino Engineering based in South Whales, Australia. The company had 300 employees and most of them were retained in the company after acquisition. Latino engineering designed developed and manufactured specialized engineering equipments for utilities, infrastructure, construction and Oil & gas industries.

After Latino engineering was acquired by the investor firm, the company stared to face some major issues in the company as complaints of the customers started to increase drastically within 12 months of the deal.  The customers who were earlier happy with the services of the organization had started to complain about multiple issues such as poor follow ups, delivery of wrong or defective instruments, long turnaround time, and unresponsive service team.

As consumer complaints increased, the customers of Latino engineering were losing confidence in the organization which further resulted into decrease of orders and thus, a decrease in revenues of the engineering firm. The bottom line and profitability of the company were also declined significantly. With the frequency of complaints received about mentioned issues, the company clearly needs to make improvements in its processing cycle, quality of equipments, information systems, and service deliveries. With appropriate steps taken to enhance the existing system of Latino,  the company would be able to resolve the issues that caused complaints to rise. The company has only 3 months to do that. Thus, six sigma principles would be used and a continuous improvement plan would be developed as it would allow company to make significant changes in less time. The company is losing its customers already and if the improvements are not made fast then the company has a risk of losing even more of them soon. This could be very damaging to the reputation of Latino engineering as well as the investor organization. Thus,  it is essential to develop and implement a continuous improvement plan in the organization.

Objectives of the continuous improvement include:

• Improvement in the turnaround time
• Improvement in the service deliveries and follow ups with customers
• Reduce the production of defective parts in the manufacturing unit
• Improve the information systems of the company such that delivery errors can be reduced

Assuming that the continuous improvement plan would get approved in the first week of Oct 2017, the project would start from 11th Oct 2017 and would be completed in three months by 10th Jan 2018.

Action Steps	Milestones
Root cause analysis	25th Oct 2017
Proposal development	5th Nov 2017
Approval of proposal	6th Nov 2017
Initialization and preparation	26th Nov 2017
Activities planning	1st Dec 2017
Final approval of plan	2nd Dec 2017
Quality improvement	5th Dec 2017
Process cycle improvement	10th Dec 2017
Designing and development process improvement	20th Dec 2017
Service delivery improvement	25th Dec 2017
Improved system testing	5th Jan 2018
Employee feedback	8th Jan 2018
Project Closure	10th Jan 2018

The challenges that Latino Engineering is currently facing include:

Equipment defects: Customers are complaining of receiving defective orders. Defective products can result from faults or defects in designing or manufacturing processes.  However, quality issues can still be avoided from reaching the stage of final product delivery if they are detected using appropriate performance benchmarking or testing procedures. However, the company is unable to do that because of which, customers are receiving defective products. This suggests that the company needs to improve upon its quality management and performance management systems such that defect free products can be manufactured.

Objectives of the continuous improvement plan

Decline in the efficiencies: The efficiencies of the operations in the company are reducing mainly due to decline in productivity of the staff. The staff is unable to follow up with customers effectively and timely during the designing and development phases which affects the final outcome of production which is often not satisfactory for the customer. Other issues that have resulted from these inefficiencies are wrong or misplaced orders, wrong delivery and bad service  (Tech-Clarity, 2012).

Turnaround Time: The Company is facing major delays in processing orders because of which employees are unable to respond to the queries of customers on time. The customers are frequently complaining about these delays in serving them. The turnaround time of the company after placement of the order is very long as per customers. The company lacks integration in different processes of the supply chain which is further adding to the turnaround time as the speed of work is dependent on people involved in completion of work. Moreover, the company is using a number of applications from different vendors that cannot exchange information between each other directly because of this lack of integration causing delays in communication and updates.

Wrong deliveries to customers: Some customers of the company have received wrong deliveries which reflect upon the challenges of delivery and information processing. The company is thus facing problems in the area of information management which is affecting the deliver services of the company.

The principles of six sigma are being used for preparing the continuous improvement plan for Latino Engineering which would include the following:

The causes behind the problems currently faced by Latino Engineering can be identifies as below:

Equipment defects: As per six sigma concepts, a defect can defined as a variation from the expected value of the output that is not acceptable to the user or the customer of the product. TO be able to see the defect, acceptable limits of the product performance must be known. These limits act as measurable benchmarks of performance in the industry. Benchmarking can be used to identify the causes behind equipment defects. These benchmarks are defined by industry experts from the industry  (Baudart & Corp, 2016).

Inaccurate order processing: if the data generated or managed during the order management process is inaccurate then it can lead to deficiencies in deliveries. Some of the factors where problems can be seen include size of consignment, product value, and contractual arrangements. Causes behind these problems can include missing address, order entry errors, order modifications, wrong address entry, and insufficient delivery information received  (Jakobsson, 2010).

Identification of the causes behind the problems

Designing and development issues: The customers of Latino Engineering are complaining about the insufficient follow ups from the staff of the company during the stages of product design and development that is affecting the outcome of the development. There are inefficiencies observed in information management that are making it difficult for the company employees to resolve the customer queries. Common causes of inefficiencies in information management during design and development  could be complexities of product management, lack of control over changes, and more (Vaidyanathan, 2012).

Turnaround Time: The time taken between the order placement and the delivery is the turnaround time. A list of activities that consume time in the process include:

• Checking of the availability of stock
• Designing of unavailable equipments
• Identification and listing of part requirements
• Parts procurement
• Parts delivery
• Parts assembling
• Product testing
• Order dispatch
• Logistics and Transportation
• Equipment delivery (Chakraborty, Kumar, & Malguri, 2016)

Following improvements are required:

Order management: The Company needs to have better control over the order management system such that processing problems like wrong order entries, order duplication and other order processing errors can be eliminated.

Turnaround time reduction: As per the complaints from the consumers, the turnaround time is high which is causing concerns in customers. Thus, the company has to work on the process cycle time in a way to reduce the total turnaround time for the customer orders.

Service delivery: Service delivery problems can cause problems of delays, delivery errors, and can affect the servicing capability of the company employees. Because of this lack of the staff productivity, customers are getting dissatisfied. In order to solve these service management issues, the company needs to work of the services.

Reduction in Defects: Defects are resulted when the product is not fulfilling the quality requirements. The company is not able to ensure that the deigning and manufacturing processes follow the desired quality standards which are why defects are increasing. To make improvement in the situation, it is essential that the company uses a strong quality management practice.

The needs identified in the previous step can be fulfilled using following action steps:

• Order management process control: To control order management process, organization should use right structure with right people having right skills. Thus, the company needs to modify its structure to enable better control which can be done by centralizing management of resources so that the whole lifecycle of the product can be managed from a single place. With this centralization, multiple processes including product catalogue, product pricing, and information management can be managed from one location.
• Enhanced operational efficiencies: Order processing cost can be reduced with reduction in quotation errors during the processing of orders. For this, an automation software may be installed in the organization that would allow employees to process orders through the system which would reduce the probability of errors and thus, improve the efficiency of order processing.
• Improve quality: To enhance the quality of services provided by the company including designing, development and manufacturing, it is essential that the business processes implemented are accurate and consistent with the quality specifications or benchmarks defined by the industry. Thus, a industry trends must be studied with respect to quality of products and systems based on which performance of products may be measured such hat defects can be identified and eli9minated before the final product is delivered to the customer(Capgemini, 2017).
• Turnaround time reduction: Centralization of processes would also centralize the information sources such that order processing time would reduce as multiple systems would not be required for managing information. Further, with automation of the order processing system using computers would reduce the time taken by the employees on managing processes which would further reduce the turnaround time. An application can be implemented such that it provides automatic task allocation facility upon receiving the order such that the interdepartmental communication time is reduced. The system would automatically check for the availability of the person and would assign the task accordingly and the information about the same would be notified to all the employees allocated work and those managing them through the centralized system. All these measures would reduce the turnaround time significantly  (MindTree, 2017). Besides these measures, there can be several other ways that company can use to reduce the order processing cycle time for Latino Engineering such as:
• The processing of the orders is done in a sequential manner such that one process is followed at one time. However, some of the processes can be actually run simultaneously without the need of waiting for a previous process to complete. If this is done, the waiting time and thus, the processing cycle time would also be reduced. Concurrent engineering methods can help the staff do this. Some of the tasks that can be managed simultaneously include concept development, bill creation, and product designing. With the implementation of concurrent engineering, the process cycle can be reduced up to 80%.
• Besides concurrent processing, modification in some of the processes can also help reduce the processing cycle time such as document approvals. Instead of taking approvals for every process immediately, the approval process from one department can be clubbed such that all the processes and documents to be approved go one department at one time instead of going to and fro between different departments for approvals. This would reduce the processing time of the order (Bhojni & Raj, 2015).
• When people are working in the organization, they can get interruptions from multiple calls from clients for follow up. Instead of the staff answering their calls, if an IVR system can be implemented, the system can be used for automatic updating of the information to the client such that only when there is some major concern that needs to be discussed with the company staff, the staff would be connected to. This would reduce the e number of calls that would go to the staff directly and thus, will save the order processing time (Andersen, 1999).

For implementation of the continuous improvement plan in Latino engineering using six sigma processes, the time available to the company is only 3 months and thus, a fast and highly organized process that guarantees effective implementation is required. For this, the company can take Awareness-Motivation-Competency-Implementation approach in which implementation would take four steps including:

Awareness: Before the actual implementation of the continuous improvement plan, it is essential that the employees of the company are well informed about the expected changes in the system so that they would know how the changes in the processes would affect their work. Thus, the first step to this development would be creation of awareness about the adoption of six sigma and continuous improvement processes in employees of Latino Engineering. Some methods of awareness creation can be used by Latino Engineering such as poster campaign on expected results, informative newsletters, suggestion boxes, posting of benchmark results in the industry, motivational screen savers on systems and more.

Action steps for continuous improvement plan

Motivation: Once the staff is well informed, it also has to be motivated so that an acceptance is there for the new methods which would encourage the employees to learn and use new practices adopted by the organization. The role of senior management would be critical at this stage as they would need to keep their juniors motivated towards achievements which can be done by providing them rewards and recognition. The company needs a cultural transformation to be able to adopt the six sigma practices and thus, it is essential that all the employees are motivated towards adopting the change as the change would demand significant work from them.

Competency development: , At this stage, the employees of Latino Engineering would be trained on the use and applications of six sigma practices as it would necessary to develop their competencies for managing the improvement processes. Developing competencies is necessary because of the employees are not competent enough then it can lead to failure of the improvement plan. The organization can use trainings for enhancing the competencies of people. Training would build a strong foundation for the development as the employees would be able to learn about six sigma practices as well as acquire skills. Certifications on six sigma can also be provided to a selected staff to give them extensive practical knowledge. Regular training involving all the staff members can include topics like waste elimination, lean principles, DMAIC, defect identification, quality management, lean design, and productive maintenance.

Implementation: Once the staff is both motivated and equipped to handle required improvement tasks and processes, the actual implementation of the six sigma methods would take place through the execution of the planned activities. However, before this can happen, a suitable environment has to be created for adoption for which, data would be collected from the system and it would be analyzed using software tools for suggesting how improvement practices can be implemented. The tools can also be used for tracking project activities, managing training and triggering the processes for improvement. A continuous morning and reviewing of the improvement activities would help the company ensure that the plan is implemented effectively and is giving expected results (Sarma, 2017)

Six sigma knowledge-base provides a variety of ways communication can be managed between the staff and the stakeholders for different purposes. Some of these methods can be used by Latino engineering such as:

• Meetings for regular discussions and decision making
• Town hall gatherings for announcements
• Memos to employees for information
• Presentations for training and guidance
• Minutes recording for updates
• Q&A sessions for training and problem resolution
• Intranet posts for informing
• Manuals for training
• Emails for regular communication
• Phone calls for emergencies for informing
• Milestone events for giving recognition and motivation
• Survey for getting feedback
• Suggestion boxes for improvement
• Brown bag lunches for team management

Based on the needs of stakeholder groups, appropriate method of communication can be used.

Conclusions

This report was prepared to suggest a continuous improvement plan for the Latino Engineering which is facing major complaints from customers who are upset about the order processing errors, processing time delays, product and service quality. The report explored the root causes of the problems identified and it was found that the company needed to improve upon its order processing system, information management system, and quality management practices. For this, a continuous improvement plan based on six sigma principles was recommended. Some improvement steps were suggested including implementation of concurrent engineering, modification of process sequences, installation of order processing software, and more. These changes are expected to reduce the process turnaround time, enhance service delivery capabilities and reduce product defects.

References

Andersen, B. (1999). Process Cycle Time Reduction. ASQ.

Baudart, F., & Corp, F. (2016). Figures don’t lie: Be honest about your OEE score. CFE Media.

Bhojni, S., & Raj, M. (2015). Perspective: The New Order in Order Management. Infosys Limited.

Capgemini. (2017). Streamlining the Order-to-Cash process. Capgemini.

Chakraborty, S., Kumar, B., & Malguri, A. (2016). Reducing the Truck Turnaround Time inside a Heavy Manufacturing Industry through Makigami Analysis. International Journal of Advanced Information Science and Technology (IJAIST), 39-45.

Jakobsson, L. (2010). The Impacts of Incorrect Sales Orders on the Purchase Order Processing, Continuous Improvement of the Purchase Process. HELSINKI SCHOOL OF ECONOMICS.

MindTree. (2017). Reduced turnaround time and improved process efficiency for an insurance provider. Mindtree.

Sarma, A. D. (2017). Follow a Structured Approach to Continuous Improvement. iSixSigma .

Tech-Clarity. (2012). Tech-Clarity Perspective:Best Practices for Developing Industrial Equipment . Tech-Clarity, Inc. .

Vaidyanathan, R. (2012). Design to Deliver: A Game Changer for the Discrete Manufacturing Industry. Genpact.