Improving the Stainless Steel System at Process Technology International Using 5S, Process Improvement, and Inventory Control

Author

Juan Fernando Sanchez
Jordan Nash
Enis Ormanci
Erion Tafa

Date of Submission

Spring 4-21-2020

Project Type

Senior Design

Major

Industrial & System Engineering

Committee Chair/First Advisor

Dr. Adeel Khalid

Abstract

Process Technology International (PTI) is a small manufacturing company producing industrial equipment used in the processing of steel. The purpose of this project is to reduce costs and improve inefficiencies within the stainless steel system.

After meeting with industry sponsors and determining their most pertinent issues, we decided to search for inefficiencies in three places: inventory controls, manual processes, and physical workspace arrangement. To measure how the current inefficiencies were affecting costs, the team performed EOQ analysis on the inventory controls and time study evaluations on the processes. By collecting demand data, holding cost, ordering cost and price break cost data from the steel providers, EOQ analysis was able to be performed. The team then began taking time studies of the relevant processes, identifying and timing movements that were considered ‘non- value-added’ meaning they added no value to the process.

With the non-value-added steps identified, a cost was assigned to each based on the time that it took, and the labor cost of the worker performing the process. The team performed pareto analysis to identify the costliest steps and performed a descriptive and qualitative analysis to determine which non-value-added movements could be eliminated by either process improvement, workspace improvement, or a combination of the two.

The team identified four alternatives with the potential to reduce costs and inefficiencies:

Solution 1. EOQ Implementation

Implement an economic order quantity and reorder points for stainless steel inventory controls. These give the purchasing department specific inventory levels at which they will order specific quantities that optimize stainless steel ordering, holding, and unit costs.

Solution 2. Standard Operating Procedure Implementation

Create and implement standard operating procedures (SOPs) for the welding processes. Each SOP will specifically instruct the operator to layout necessary tools such that later excess movement is avoided.

Solution 3. Workspace Improvement

Build and utilize a new stainless steel storage rack, two dedicated carts, and specialized tool storage at the two welding stations. Use the new organized rack, tool holders, and carts to cut down on wasted time spent searching for materials, searching for tools, and manually transporting items across warehouse.

Solution 4. 5S Total Quality System Implementation

Completely overhaul facility with a 5S quality system that implements all of the other suggestions and additionally adds demarcation and color-coded labeling to the various storage areas throughout facility. 5S system eliminates non-value-added movements from processes and improves efficiency throughout entire system.

Using cost-benefit analysis, the team found that each solution provided potential cost savings.

TOPSIS analysis was performed using five variables: cost of implementation, annual cost savings, time to implement, employee acceptance, and ease of implementation. The TOPSIS analysis revealed that the workspace improvement suggestions (solution 3) provided the closest-to-ideal solution to the stainless steel system inefficiencies.