13

Case Study 2: Final Assembly Operations

13.1 Introduction
This study applied the define, measure, analyze, improve, and control
(DMAIC) Six Sigma methodology and Lean principles [1] to redesign a final
assembly work unit to increase capacity and reduce costs in a light manu-
facturing company located in the United States. The final assembly work
unit that was redesigned for this study was responsible for 38% of the com-
pany’s revenue stream and experienced various cost and process efficiency
issues. These issues included an assembly-­line imbalance, floating bottle-
neck operations, safety concerns, high percentages of non-­value-­added time
for employees, housekeeping issues, and storage issues. In addition, the
company was seeking to increase production in this work unit to attain a
larger market share. To accomplish these goals, the organization applied the
Lean Six Sigma approach to create a meaningful and practical road map.
This study illustrates such an application including a case study and results.
The case study focuses on the creation of value stream maps, line balancing,
and facility redesign to identify and track key processes within the facility.
The manufacturing organization in this study initiated Lean Six Sigma to
improve the financial outlook and attain a sustainable quality system with
the following objectives:

• Retain and attract customers.

• Reduce manufacturing costs.
• Increase process flexibility and output based on market demand.
• Increase capacity.
• Increase workflow and information flow.
• Improve process documentation.
• Enhance safety and housekeeping.

The case study is organized into five sections to address these objectives. In
this section an overview of Six Sigma analysis is provided; in Section 13.2, a
background description of the case study is provided; Section 13.3 discusses

159
 160 Lean Six Sigma for Engineers and Managers: With Applied Case Studies

the application of the Lean DMAIC approach; Section  13.4 discusses the
improvement results; and Section  13.5 draws conclusions on the Lean
DMAIC cost reduction initiatives.

13.2 Background
13.2.1 About the Company
The organization studied is a leading manufacturer of industrial cleaning
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equipment headquartered in northwest Ohio, USA. The company began

operations in 1911 and conducts business in more than 60 countries with over
$3.1 million in annual sales and employs 155 individuals. Their operations
are based on one shift, and their hourly workers are unionized. The com-
pany has explored options to relocate its operations to less expensive regions,
such as Mexico or the southern United States, where they could save money
by reducing labor costs and overhead due to increased costs and economic
downturns. Before moving forward with these plans, the company investi-
gated reducing costs at its location.

13.2.2 Targeted Areas for Improvement

The process that was examined for improvement was the final assembly line
for an automatic commercial floor scrubber that is available in three mod-
els and contains 416 different parts. The primary goal was to create a value
stream map by applying Lean Six Sigma concepts to reduce waste and to
develop a more suitable facility layout. The process studied has many forms
of waste that a revised layout would reduce. As with many other Lean proj-
ects, the waste involved excess movements, redundancies, rework, errors,
poor training techniques, and poor process flow, and were all within the
direct focus.
Based on conversations with management and observations within the
facility, the following areas of improvement were identified to reduce costs,
improve workflow, and increase productivity:

• 40% improvement in space utilization

• 50% less work in process (WIP)
• 30% improvement in quality
• 20% improvement in worker productivity
• 20% increase in capacity
• 10% reduction in operating costs per unit
• 10% less scrap, with improvements in scrap control
 Case Study 2: Final Assembly Operations 161

13.3 Application of Lean DMAIC Process

13.3.1 Define
This first step of the DMAIC cycle identifies the goal, objectives, and scope
of the project. In addition, the project team is formed and the timeline estab-
lished. Tools used during this stage include brainstorming, critical to quality
(CTQ) analysis, and scope definition. The primary objectives of this project
were to increase capacity by 20% and reduce costs per unit by 10%, and the
primary metrics were the annual capacity in terms of value of units sold per
year and the weekly operating costs for the facility. As discussed later in the
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analysis phase, the process was baselined at an average annual capacity of

8,000 units for the preceding two-­year period. Operating costs were also cal-
culated for the same two-­year period normalized based on production rates.
The project team consisted of the facility manager as the sponsor, the engi-
neering manager as the project leader, the manufacturing engineer as the Six
Sigma black belt, and several shop floor and maintenance personnel.
The project timeline was established at the first meeting of the team and is
displayed below:

• Identify project objectives: 2 weeks

• Form Six Sigma team: 1 week
• Develop the project timeline: 1 week
• Define and clarify the project goal: 1 week
• Measure the current state of the operation: 8 weeks
• Analyze performance of the operation utilizing various Six Sigma
tools: 10 weeks
• Improve the operation based on data provided in previous steps:
6 weeks
• Control the operation and develop quality/­cost control mechanisms:
6 weeks
• Conclude the project, document results, and disband the Six Sigma
team: 3 weeks
• Total Time: 38 weeks

The project time line was 38 weeks; the project was concluded within the
38-week timeframe.

13.3.2 Measure
In this phase of the project the key metrics were identified, the data collection
process was developed and executed, and the performance and variation of
 162 Lean Six Sigma for Engineers and Managers: With Applied Case Studies

Suppliers Inputs Processes Outputs Customers

See Process >Finished floor
>Metal Flowchart in cleaning
fabricators >Stamped parts Figure 13.2 equipment >Dealers
>Component >Parts and
suppliers subassemblies >Institutions

>Businesses

FIGURE 13.1
SIPOC diagram.

the current system were baselined. Included in this phase was the devel-
opment of a SIPOC diagram and vital X analysis. Figure  13.1 displays the
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SIPOC diagram.
The output variables analyzed for this process were the manufacturing
capacity and operating costs. The Six Sigma team conducted a brainstorming
session to identify causes of variation in the system and potential vital Xs
that caused the variation in the system. The input variables (potential vital
Xs) included:

• Lack of real-­time product and order data

• Inefficient facility layout
• Lack of communication
• Training and associated documentation
• Lack of standardized/­efficient processes
• Lack of work standards
• Lack of control mechanisms

Data were collected for this project for the previous two years utilizing a
combination record review, database review, and real-­time data collection
from current processes. The data were collected by the Six Sigma team using
standardized forms.
Meaningful Six Sigma metrics were established based on the data and goal
of the project. These metrics included the process cycle time, weekly operat-
ing costs, value-­added activity analysis, and material handling flows/­costs.
The tools utilized for this phase were very effective and allowed for a strong
quantified baseline of the current process in terms of operation process time
and costs as discussed in Section 13.3.3.

13.3.3 Analyze
The third step of the DMAIC cycle involved studying the data and trends
observed in the measurement phase to provide a data-­driven basis for improve-
ments. Several Six Sigma tools were applied to understand process capability
 Case Study 2: Final Assembly Operations 163

and to identify the vital Xs, which are the root causes of delivery failures and
cost overruns. The tools and data analysis methods applied included:

• Value stream analysis

• Pareto analysis
• Root cause analysis
• Failure modes effects analysis (FMEA)

Before identifying and analyzing root causes, a baseline for the current
process performance was established and a process capability analysis was
performed. On-­site data were collected over an 8-week period and analyzed
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by the project team concurrently over a 14-week period.

The value stream mapping process included the flow of information and
a diagram of the various processes of the product’s path from customer
to supplier. The value stream map was created by dividing the process in
three phases:

1. Create the current-­state map (process flowchart).

2. Conduct time studies to baseline current process metrics.
3. Identify opportunities for continuous improvement and methods to
reduce non-value-added activities.

The remaining subsections provide more detail on each of these three steps.

13.3.3.1 Current-­State Map (Process Flowchart)

This step involved conducting interviews with employees in the work unit
and several days of observation. Data were collected to document and
understand the steps of the process. From the information that was gath-
ered, the following items were determined: customers, suppliers, steps of
operations, flow, stock, transport, cycle times, number of operations by sta-
tions, uptime, changeover time, downtime per process, inventory stations,
inputs, outputs, and delays.
Once the collection of data was complete, an analysis of the data was com-
pleted in order to understand the value stream. Figure  13.2 is a diagram
of the current-­state value stream map. A process flowchart is a tool used
to map out the steps of a process. In this particular application, there are
five elements (and symbols) that are used: operation (○), transportation (⇨),
inspection (□), delay (⫐), and storage (▽).
Within the project process flowcharts were created for all assemblies. A
process flowchart is a good tool to use in order to represent a process easily.
It can also provide opportunities to identify value-­added activity, non-­value-­
added activity, and non-­value-­added waste easily.
 164
Process Flowchart
Summary

Lean Six Sigma for Engineers and Managers: With Applied Case Studies
Category No. Dist.
Process Description: Breaker Panel Assembly Operations 9
Company/Location: NSS Transfers 5 51.5 feet
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Recorded By: Ed Russel Inspections 0

Delays 1
Storages 1 12.5 feet
Date: Friday, October 17, 2008 Totals 16 64 feet

Cycle Time
Inspection
Operation

Quantity
Distance
Transfer

Lead Time
Storage
Delay
Step Description of Method Comments

1 D Get Face Plate 11 ft. 8 sec. 1 8 sec.

2 D Get Decal and (7691221) 6.5 ft. 15 sec. 1.1 23 sec.
3 D Place Decal 40 sec. 1 63 sec.
4 D Place (7691221) 18 sec. 1 81 sec.
5 D Tighten 8 sec. 1 89 sec.
6 D Get (6491261) and (4890791) (×2) 13 ft. 7 sec. 1.2 96 sec.
7 D Place (6491261) & Tighten 24 sec. 1 120 sec.
8 D Get Screws 6.5 ft. 21 sec. 4 141 sec.
9 D Get Bolts and the Red Cable 14.5 ft. 11 sec. 4.1 152 sec.
10 D Prepare (4890791) (×2) 18 sec. 2 170 sec.
11 D Place (4890791) (×2) 26 sec. 2 196 sec.
12 D Tighten 7 sec. 4 203 sec.
13 D Add the red cable 9 sec. 1 212 sec.
14 D Checking Directions 16 sec. 228 sec.
15 D Mistakes 15 sec. 243 sec.
16 D Store 12.5 ft. 16 sec. 259 sec.

FIGURE 13.2
Current-­state process flow diagram.
 Case Study 2: Final Assembly Operations 165
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FIGURE 13.3
Current-state spaghetti diagram.

In terms of the value stream mapping, a spaghetti flow diagram was cre-
ated by taking the existing layout of the facility and generating flow lines
of product through the work unit. The flow diagram displays the path of an
employee working on the main assembly. As displayed in Figure  13.3, the
main assembly area is heavily circled as shown by the multiple lines, which
indicate employee movement within the work area. There are also several
lengthy trips that add up to a large amount of waste within the process. The
information that was received from the spaghetti diagram helped to deter-
mine which areas were critical, which areas needed to be closer, and which
areas did not need to be moved.

13.3.3.2 Baseline Time Studies of Current Process

A time study was performed on the work unit to baseline the current process
metrics in terms of mean process times and the related standard deviations.
This information was required to balance the assembly line process for the
layout redesign. A time study is conducted by following an operator through
a process or assembly and documenting the durations of the basic elements
of the process. Several key concerns are crucial to an effective and accurate
time study, such as pace rating, several observations of the process with
the same operator and same procedure, and some degree of consistency. The
information provided from time studies and the process flow sheets will be
an integral part of creating a new, more efficient layout and procedure.
For the time studies six observations of each assembly were recorded. Soon
after the start of taking time studies it was evident that the various operators
assembled the parts differently, and their procedure changed between cycles
 166 Lean Six Sigma for Engineers and Managers: With Applied Case Studies

Element Observations
1 2 3 4 5 6 Mean St. Dev.
Get Face Plate 8 3 4 5 3 6 4.8 1.9
Get Decal and (7691221) 15 5 5 2 6 5 6.3 4.5
Place Decal 40 31 30 30 32 31 32.3 3.8
Place (7691221) 18 12 8 18 17 17 15.0 4.1
Tighten 8 6 4 7 7 6 6.3 1.4
Get (6491261) and (4890791) (×2) 7 6 6 6 6 6 6.2 0.4
Place (6491261) & Tighten 24 24 26 24 25 25 24.7 0.8
Get Screws 21 12 10 18 13 11 14.2 4.4
Get Bolts and the Red Cable 11 10 12 11 11 11 11.0 0.6
Prepare (4890791) (×2) 18 21 20 19 20 19 19.5 1.0
Place (4890791) (×2) 26 11 23 14 17 21 18.7 5.7
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Tighten 7 18 7 8 7 12 9.8 4.4

Add the red cable 9 8 7 7 7 8 7.7 0.8
Checking Directions 16 45 21 12 35 36 27.5 13.0
Mistakes 15 26 0 0 21 9 11.8 10.8
Store 16 10 13 15 13 15 13.7 2.2

Total 259 248 196 196 240 238 229.5 27.0

FIGURE 13.4
Time study results.

(they did not follow a standard process). To remedy this issue, the team con-
sulted with one trained operator to complete six rotations following the same
process. The results from the time study are displayed in Figure 13.4.

13.3.3.3 Opportunity Identification for Continuous

Improvement and Identification of Methods
to Reduce Non-Value-Added Activities
The team identified opportunities for continuous improvement by highlight-
ing some of the areas of waste within the processes and recommended meth-
ods to eliminate these activities; these are discussed in Section 13.3.4 related
to improvements.
From these five previously mentioned steps, a Pareto analysis was per-
formed to determine the largest contributors to cost overruns. The analysis
indicated that over 50% could be contributed to a lack of standard proce-
dures and related monitoring mechanisms, and an additional 40% could
be contributed to an inefficient layout. The Improve section targets these
two areas.
A failure mode effects analysis was conducted. The Six Sigma team ana-
lyzed the data and system to determine the failure modes, potential effects,
severity, occurrences, and detection. The key findings from the study are
listed below and the actions taken are listed in the Improve section of this
case study.
 Case Study 2: Final Assembly Operations 167

13.3.4 Improve
The fourth step of the DMAIC cycle focused on identifying and implement-
ing system improvements based on the findings of the Analyze step. After
identifying and analyzing the potential vital Xs, the team created a list of
improvement initiatives to address each issue. Meetings and focus groups
were held with the customers, managers, line workers, suppliers, and engi-
neers and other staff to review the results and develop the following list of
improvements. The following improvements were identified:

• Redesign the facility layout for optimal efficiency by reducing

employee and material movement within the work area.
• Improve and monitor labor utilization versus the established engi-
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neering standards to ensure that savings are being realized.

• Standardize and document all the new processes.
• Train all employees and supervisors in the new processes.

13.3.4.1 New Facility Layout

After analyzing the current-­state facility layout and the amount of traffic that
overlaps, the team recognized that there was significant waste throughout.
Through the analysis and application of facility planning tools, an improved
facility layout greatly reduced movement in the facility.
With the information that was gathered a future-­state layout was cre-
ated. This was completed to minimize the amount of travel in the facil-
ity, decrease the cost of transportation for parts and products, cater to the
proposed supermarket, and improve the overall tidiness of the facility lay-
out. Figure 13.5 displays the improved future-­state layout. By reducing the

FIGURE 13.5
Improved future-­state layout.
 168 Lean Six Sigma for Engineers and Managers: With Applied Case Studies

amount of space that the work unit occupies, the material and information
can flow more efficiently.

13.3.4.2 Labor Utilization
Labor utilization based on engineering time standards was very low for the
entire facility. Most operations were less than 60% efficient based on these
standards. A key reason for this was lack of manager attention to these stan-
dards and outdated specifications. Several newer product lines also did not
have labor standards in effect. Many work cells also had very low utilization
rates and performed similar operations as other cells.
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13.3.5 Control
The fifth and final step of the DMAIC cycle involves developing a system
to monitor and sustain the improvement initiatives. This was primarily
accomplished through the development of standard operating procedures,
enhanced training, and daily progress tracking for all categories of employ-
ees within the work unit. The main purpose was to ensure the implemented
improvements will hold and not revert to baseline figures. Logbooks were
maintained within work centers to record key metrics. Graphical charts
displaying the planned versus actual cost for each operation were also dis-
played daily as well. In addition, weekly meetings with the key staff were
held to discuss performance and to generate new improvement solutions.
These meetings involved a review of process times, customer surveys, and
adherence to standard operating procedures.

13.4 Improvement Results
Table 13.1 displays the combined improvement results from the implementa-
tion of Lean DMAIC. In the table, there is an emphasis on layout redesign and
value stream analysis. The table also displays the percentage and nominal

TABLE 13.1
Savings Achieved
Current State Improved State Savings/­Reduction
Cycle time mean 229.5 minutes 185.9 minutes 43.6 minutes
Cycle time standard deviation 27.0 minutes 13.3 minutes 13.7 minutes
Floor space requirements 1,120 square feet 810 square feet 310 square feet
Labor cost per unit $160.10 $129.60 $30.40
Annual labor costs at 8,000 units $1,280,000 $1,036,800 $243,200
 Case Study 2: Final Assembly Operations 169

savings achieved by rearranging the layout of the work unit to establish a

more streamlined operation. The savings were accomplished by modifying
the layout and work processes based on the spaghetti diagram, travel dis-
tances, and standard operation times. The savings were calculated by com-
paring the distances and travel times in the original layout and process to
the revisions identified during the improvement phase.
By modifying the work unit layout the company can expect savings of over
$243,000 per year based on cycle time/­labor cost reduction at 8,000 units per
year. This also equates to nearly a 20% increase in capacity.
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13.5 Conclusions
Strong efforts are needed for organizations to remain viable in today’s vol-
atile financial climate. Lean Six Sigma with an emphasis on value stream
analysis is such a tool to achieve this goal. This case study proposed a work
unit layout redesign process based on the DMAIC cycle and demonstrated
its application. It is suggested that organizations needing to trim costs and
boost productivity could achieve similar result improvements for stakehold-
ers and customers. Furthermore, the implications of this case study encour-
age other organizations to implement similar projects.
The Lean Six Sigma process and value stream analysis may be used as a
guide or road map for Six Sigma development training and improvement.
The case study demonstrated that through focused efforts, organizations can
achieve great successes with relatively short project launch periods. A direc-
tion for future research would be to apply the value stream analysis method-
ology for different industries and gauge the positive and negative impacts.

Reference
1. George, M. (2002). Lean Six Sigma: Combining Six Sigma Quality with Lean Speed.
New York: McGraw-­Hill.
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