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Otscon Inc. Industrial Assessment

Team Members: Corey Wands, Jack Hahn, Nick Hummel (Co-Op)

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Table Of Contents

Executive Summary 2

Opportunities and Objectives 4

Company Background 4

Objectives of Assessment 4

Material Flow Analysis 5

Value Stream Map 6

RPA Analysis & Results 7

Muda Analysis 8

Interactions and Range of IE Techniques 9

Initial Project Charter 10

Opportunity 11

Preliminary Plan 11

Data Requirements 11

Team Role Plan Spring 2019 12

Appendix 13

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Executive Summary

The objective of this report is to discuss the potential issues that will be analysed and
addressed in our future project at Otscon Inc. Our team as well as our colleagues participated in a
tour of Otscon’s facility where we observed the company’s operations that produce a variety of
products such as press brakes and brake pedals. The aim of the tour was to analyse the company
and look for opportunities for improvement. This paper will discuss Otscon’s present state,
present a problem statement, and finally discuss and propose a future state.

At this point in this project, the data available to our team is limited and we assume that
Otscon will likely approach us with their own opportunities for improvement - as a good
company should. Nonetheless, our team will confidently present the following observations in
hopes of finding common ground that provides a valuable learning experience and a viable,
cost-effective solution for Otscon.

In its current state, Otscon has the following perceived issues:

● Visual management deployment
● Product flow, space use & material movement means
● Inventory and WIP levels

These problem areas were identified based on our team and our colleagues’ physical
observations and RPA-lean analysis scores that can be found in the appendix section of this
report.
The RPA measurement scores (appendix table 2), specifically, revealed potential focus
areas for our team. In the categories of visual management deployment, product flow, space use
& material movement means, and inventory and WIP levels, the averages were 5, 6, and 6,
respectively. These scores are average (6) to just below average(5). Since these areas were

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communally agreed upon to be subdued or less than optimal, our team chose them as
opportunities for improvement.

Our team believes that inventory management at Otscon is the best opportunity to pursue.
To do so, industrial engineering techniques such as linear optimization, modeling and data
analysis will be deployed in efforts to reduce inventory and WIP levels. In addition, the
implementation of 5S and lean techniques into Otscons inventory management system will
certainly add value to their process.

For this project to be successful, substantial data will need to be collected. This will
include production data and order data to determine inventory and WIP levels. In addition, our
team would like to take data on spatial requirements and availability at the facility as we believe
there is opportunity to relocate inventory to more efficient areas on site. Data gathered will
enable our team to create statistical models for simulation efforts as well as present hard
evidence to Otscon.

There are many opportunities for improvement at Otscon. All together, our team’s goal is
to work with their managers to develop an inventory management system that is well optimized
for future orders, tightly organized, reduces potential for variation and improves overall quality.

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Opportunities and Objectives

Company Background
Otscon Inc., is a job-shop automotive manufacturer located just east of Columbia, MO.
The company specializes is making parking brake and brake pedal assemblies tied to
several-year deals for a specific catalogued product. Their product scope includes hand brakes,
cane brakes, foot pedals, and brake pedals. The manufacturing process is linear (i.e. the process
flows from point A to B to C… and so on) and primarily uses stamping, injection molding, and
welding to manipulate imported raw materials before assembly, batching, and export. Ostcon’s
production is driven primarily through manual labor but some automated machinery is present.
While Otscon’s final products themselves are rather simple, the linear process flow felt
complicated due to spacing issues, abundant clutter, and seemingly excessive inventory.

Objective of Assessment
The objective of this assessment is to perform Industrial Analysis on Otscon’s
manufacturing process in order to identify problem areas and develop a preliminary plan to be
executed in the Spring 2019 semester. This report will include material flow analysis, RPA lean
analysis, muda analysis and details of potential opportunities for improvement. Our team will
then designate an initial project charter from an aforementioned opportunity and outline the plan,
methods, and roles we hope to pursue at Otscon Inc.

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Material Flow Analysis

During our walk through tour at Ostcon we were able to generalize their material flow
processes throughout the plant. There are multiple production systems producing different
products that work around each other in the same areas, and all flow through sections of the plant
in similar order.

Raw materials are received and then pressed in die sets or cut by heavy machinery. The
newly pressed or cut raw materials are sent to an area on the floor dedicated to welding, where
different parts such as breaks and pedals are welded according to their own needs, following
their own flow paths that workers at the plant know how to operate well despite having a
jumbled and confusing layout. After welding, parts are sent to their respective assembly lines.

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 There are normally three or four different assembly lines operating in the assembly area.
Each line is manpowered with little machinery assistance, and each person performs a task or
two before sending the partially assembled parts to the next step in assembly. Finished parts are
sent to inventory where shipments get organized, and either put into storage until later shipping
or go into holding to await shipping. Operating under standard production quotas, Ostcon
employees and systems strive to reach ideal tact times of producing one finished part at each
assembly station in around 25 seconds. Our team developed a rough estimate value stream map
that demonstrates the product flow and corresponding times.

Value Stream Map

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RPA Analysis & Results

Above shows the individual category averages from all students’ RPA measurement
scores (raw data in Appendix Table 2) for the Otscon tour. The average categorical totals
summed to 69 points in lean rating which earns a company rating of average to slightly above
average.

Otscon received sixes and sevens almost universally, but as can be seen, they score a 5 in
visual management deployment. Visual aids at Otscon seemed rather subdued or not present
during our tour. This is definitely an area our team will address and seek to improve upon. While
scores of six and seven are considered the norm, we do believe many of the scores of six can be
looked into for improvement as well - specifically, point (5), product flow, space use & material
movement means and point (6), inventory and WIP levels. Spacing at large seemed an issue at
Otscon, and with further analysis our team thinks could be a potential area for improvement. As
for inventory and WIP levels, inventory seemed to be ever present with a high WIP. Our team
needs more information in regards to this potential problem, however we want to get to the root
of why there is so much inventory and potentially provide a solution.

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 In addition to the RPA measurement scores, all students also participated in a RPA
questionnaire (Appendix table 1) that provided further insights into areas for improvement at
Otscon. Overall, Otscon received an average of 57% yeses on the questionnaires. Similar to the
RPA measurement scores, this is an average rating. While several sections had majority “no”
answers, question 13, “Is the plant laid out in continuous product flow lines rather than in
“shops”? Received the lowest score with only one yes. Almost unanimously, students agreed that
there was rough process flow at Otscon which was also outlined in the RPA measurements. The
“shop” seemingly impedes the flow at Otscon and could potentially be addressed. Furthermore
questions 1, 2, 6, 8, 16, and 18 all received low “yes” ratings. All of these questions detail visual
aids and performance measures being displayed throughout the facility. These ratings show that
visual aids and performance measures should be a point of discussion when working with Otscon
in the following semester.

All together, the RPA results detail many opportunities for our team to apply industrial
engineering techniques and practices to hopefully find and improve upon a process at Otscon.

Muda Analysis
Transportation - ​Receiving and shipping bays. Facility transportation feels spread out and
forklift transit between lines appears lengthy - specifically between assembly and holding

Inventory - ​Inventory appeared to be in multiple locations throughout the facility and in excess.
Inventory consumed a substantial amount of floor space.

Motion - ​Manual workstations were fixed and required little movement from the worker.
Automated production lines were efficient and fixed as well. Forklifts were heavily used to move
parts and inventory around the large facility.

Waiting - ​From initial observations, it seemed as if finished product was waiting in holding for
some time before export.

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Over-Processing - ​Much time was being spent by engineers on creating new machining for a
rather simple production.

Overproduction - ​As a make-to-order production, there is presumably no overproduction at

Otscon

Defects -​​ Based on initial observations, there is no data on defects, however with many
production lines being manually operated, variations are expected.

Interactions and Range of IE Techniques

From the information discovered from RPA analysis, our team hopes to expand upon the
three aforementioned opportunities for improvement using industrial engineering techniques in
order to improve a process or several processes at Otscon.

1. Visual aid system - At Otscon we believe 5S techniques would be a great method to

remedy the company’s lack of visuals. Our team believes that 5S could be deployed
especially in the inventory and holding areas where there were several aisles of stacked
goods with simply no labeling or method for product location. Upon a second visit, we
believe we will find other ways to utilize 5S across the facility as well.

2. Linear process flow - Our team sees an opportunity to improve the process flow at Otscon
by using a “lean” analysis framework in order to optimize their production. The goals
would be to reduce potential for wastes, and identify non-value added tasks. This
opportunity for improvement would require baseline observation and data gathering to
develop a statistical model that provides insights. If Otscon is willing, taking their past
production data and future outlook data would allow us to develop a ranging database that
would more accurately show where numbers need improvement. In addition, linear
optimization, modeling and simulation would allow our team to test new process designs

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 and improve upon the numbers that we gather. This opportunity would require hard
evidence through data, as it would likely be the most costly of opportunities to resolve.

3. Inventory - To manage the inventory at Otscon, IE optimization techniques and 5S would

be necessary. By using 5S we believe that simply sorting alone would reveal a how much
inventory space is being occupied inappropriately. The additional four 5S steps would
then polish the inventory system in place. To optimize the inventory, our team would
gather baseline data on WIP and inventory levels in addition to floor space required. By
analyzing this data, our team could discover and appropriate cap on WIP inventory and
hopefully decrease overall inventory levels, reduce variation and improve product quality.
Furthermore, Linear optimization and modeling could be used in this opportunity to
ensure inventory is flowing appropriately throughout the production.

As it remains, these three problems are what our team perceives as areas for
improvement. Otscon’s team may provide a specific task for us but regardless of the task at hand,
we will work by the process of ongoing improvement to identify and exploit the constraints in
play.

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Initial Project Charter - Appendix Table 3

Opportunity
As our team begins the process of collaborating with Otscon, we aim to present our initial
observations then quickly decide our course of action with their team. We hope to work on and
improve upon their inventory management system because it could potentially be the most cost
effective and efficient improvement for their company. We believe we have the appropriate skill
set and tools to face this task head on.

Preliminary Plan
As our project begins to find traction, our team believes the first step will be further

observation, investigation, and data gathering about the flow and inventory management systems
at Otscon that allows us to create a statistical model for WIP & and inventory levels. We also
believe conducting a questionnaire with the Otscon managers could provide valuable insights
during this step. These steps will enable us to advance toward simulating the process at Otscon
allowing us to keep track of WIP and other variables of import. Our team plans to take the
simulation and model new environments and inventory layouts for Otscon and test for
improvements. Once an ideal model is decided upon the plan is to execute in addition to
implementing 5S and lean framework to the new system.
Last, our team will develop guidelines for sustainability and continual improvement
purposes. These guidelines will detail our project’s implementation, maintenance, and steps and
frameworks for continual improvement.

Data Requirements
There are many data requirements necessary in order to take on this project. The primary
players will be throughput and work in progress. Throughput will encompass Ostcon’s processes
from start to finish and sound data will tell us where value is being lost. In addition, we would
like to analyze the distances and times between processes for the sake of our baselines and

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modeling. Without these numbers we will not understand the process as a whole and where any
constraints exist. Lastly, general metrics such as number of units produced per day will help us to
understand how we can help with fulfilling orders while reducing WIP and inventory levels.

Team Role Plans for Spring 2019

Next semester, Corey and Jack will work together to get information from Ostcon’s
project Engineers that can lead us towards viable solutions for realized problems. All team
members will participate in data gathering, but Jack will be in charge of keeping data and
identifying potential bottlenecks and trends throughout all production operations. Corey will take
care of communications with Otscon. Nick will return next semester and help us model
operations in Simio and then create new alternative models that show the impacts of our teams
different solutions.

As a team we hope to create a positive change at Otscon as collaborators. As students, it

is our job to learn just as much as it is to help improve their manufacturing process and we hope
this reflects in our work. Our team has outlined a few observations in this report and hope to use
our time next semester to find a cost effective solution for one or several operations that could be
improved upon at Otscon.

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Appendix

Table 1 - RPA Assessment Questionnaire - Averaged Data (by % yes)

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Table 2 - RPA Measurement Scores - Complete Data

Table 3 - Project Charter

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