Material Handling, Inventory and Productivity Improvement

A Lean Six Sigma Approach Case Study

Wa-Muzemba Anselm Tshibangu

Morgan State University, Department of Industrial and Systems Engineering

1701 E Cold Spring Lane, Baltimore, MD 21251, U.S.A.

Keywords: Lean Six Sigma, Material Handling, Inventory Management, Process Improvement.

Abstract: This paper describes a two-step strategic-tactical Lean Six Sigma methodology as used by the author to

improve productivity, enhance inventory and material handling management, and thus, reduce operational

costs at “Down Town Press Inc.”, a commercial printing press located in New York State, USA. A close

look at the company’s performance revealed a troubling picture with only 51 % utilization of personnel,

nearly $40,000 of invested capital underutilized annually, and an excess of monthly inventory costs of

almost $29,000. This study was conducted to help the company avoid a fatal bankruptcy and regain

financial prosperity. First, a strategic Six Sigma DMAIC procedure approach is deployed to better

understand the deep turmoil faced by Down Town Press Inc. Second, a more tactical Lean approach is

applied to identify various wastes and propose a set of techniques, technologies and strategies to reduce or

eliminate the identified wastes, and thus, reduce operational costs. The continuous improvement changes

proposed at the conclusion of the study suggest a possible reduction of $300,000 in yearly operational

capital. Furthermore, with the implementation of the proposed Inventory Management integrated with a

comprehensive Material Handling Management System, the study predicts a higher utilization of employees

and, therefore, an increased productivity.

1 INTRODUCTION

Established in the late 1930s, Down Town Press Inc.

is a family-owned downstate New York based

company that has served and continues to serve the

local industry and private businesses in printings by

providing various customized items including

calendars, check books, customized envelopes with

company logos, and a variety of prints, journals, and

pamphlets. To protect business privacy, the

company’s real name, the exact physical location of

its operations, and financial/ figures (turnovers) have

been purposely altered and coded in most parts of

the paper without losing the essence of the benefits

generated by the study. Throughout years of

successful operations, Down Town Press Inc. moved

from the status of a small family owned factory to a

medium-size company with operations spreading on

a 100,000 square foot floor, three dozens of

machines, approximately 120 employees, and more

than 1,000 varieties of items in inventory on-hand.

Due to the high increase of demand from local

businesses, the company is now using the intuitive

software ERP to manage their daily activities and

operations. Although the company realized some

noticeable expansion due to the increase in volume

and complexity of operations throughout time, the

firm management style, however, had remained the

same for the last decades. Down Town Press Inc. is

still operating in the old fashion and traditional

ways, with huge amounts of raw materials on the

shelves. With one single family exclusively

managing the facility by just and primarily focusing

on the profits generated by the company, very little

attention was paid to the deep and alarming decline

of operating and/or performance indexes, until

recently when the management realized that not only

competition was establishing solid roots and

stronger ramifications, but also the company’s

profits were shrinking. With non-accurate or almost

nonexistent forecasts on seasonal demands and a

totally inexact information on the actual level of

inventory on the shelves the company started

experiencing difficulties in the daily management of

operations, resulting in missing delivery promises,

losing markets, hence, valuable customers. Down

700

Anselm Tshibangu W..

Material Handling, Inventory and Productivity Improvement - A Lean Six Sigma Approach Case Study.

DOI: 10.5220/0005025307000707

In Proceedings of the 11th International Conference on Informatics in Control, Automation and Robotics (ICINCO-2014), pages 700-707

ISBN: 978-989-758-040-6

 2014 SCITEPRESS (Science and Technology Publications, Lda.)

Town Press Inc. requested the service of one of the

authors to assess the problem and recommend

possible immediate solutions.

2 OBSERVATIONS

A preliminary analysis of the firm using a strategic

Six-Sigma DMAIC procedure revealed that the two

areas mostly in need of improvement were the

“Materials Handling” and the “Inventory

Management” systems. Quantitative tests and

communication with management and crew

members on the floor revealed that the major

problems in these two problematic areas were

interlinked and self-compounding. Although

diligently working all day long, material handling

crew members had a very low effective utilization

with a very poor accomplishment because of a lack

of awareness of stock location and quantities on-

hand. No real-time data is available to assist in

locating stocks. Furthermore, there is no integration

of the current enterprise resource planning system

(ERP) and the materials handling system. As a

result, work as done at the Down Town Press Inc. is

not efficiently performed, and at the same time, a

significant amount of money is lost and wasted in

non-productivity while operating costs are

exponentially increasing. In the next sections the

paper describes the methodology and improvement

models used to face and meet these challenges.

3 METHODOLOGY

The methodology adopted in this project is a two-

step approach. First, in a strategic approach this

study implements a thorough DMAIC strategy to

properly define the problem and uncover the areas in

need of improvement at Down Town Press Inc. and

the extent of the remedial actions. Second, in a

more tactical approach and using Lean techniques

and tools, the study implements the solutions to the

problems as identified in the first and strategic

approach. The combination of DMAIC a powerful

six sigma tool with some of the Lean techniques

such as 5s, kanban, and kaizen has provided a sound

analysis of the current situation and a set of remedial

solutions that helped in designing a robust

configuration of the overall facility and generate

significant cost savings.

4 ANALYSIS AND

IMPROVEMENT OF CURRENT

SYSTEM

One of the most widely used Lean Six-Sigma

improvement procedures is a model known as

Define-Measure-Analyze-Improve-Control, popular

under the acronym of DMAIC. This procedure is

used when a project's goal can be accomplished by

improving an existing product, process, or service,

4.1 First Step Strategic Approach:

DMAIC Procedure Implementation

The DMAIC structure is a procedure established into

five phases, each phase being the preparation to the

next one(s) while using specific tools. In the next

sections a short description of each phase is

provided along with the specific actions and tools as

they were used during their implementation under

this study.

4.1.1 Define

The purpose of Define phase for the improvement

team is to clarify the goals and refine their

understanding of the potential value of a project

(George, 2002). The most important goals are

obtained from the end user customers. This study

obtained goals from direct communication with the

management, shareholders, and employees. As

mentioned earlier, it transpired from these

communications with the workers and the

management that the major goal of this project was

to improve the material handling system as well as

the inventory management in order to enhance the

overall productivity level and gain some significant

cost savings.

4.1.2 Measure

The purpose of the “Measure” phase in DMAIC is to

gather data that describes the nature and extent of

the problem. During this phase the team establishes

valid and reliable metrics to help monitor progress

towards the goal(s) defined at the previous step. At

Down Town Press Inc., this phase involved two

steps:

First, gathering of quantitative data and in the

areas of stock accuracy information, materials

handling systems, and crew member productivity. A

three-day time and motion study was conducted in

order to survey three material handlers and their

daily activities. Results from the three day time

MaterialHandling,InventoryandProductivityImprovement-ALeanSixSigmaApproachCaseStudy

701

study showed that the three crew members were

only being effectively utilized an average of 51% of

the day. The rest of the day was spent

unproductively fighting with the system, looking for

stock and searching through pick tickets. The

monetary effects of this low productivity will be

investigated later in this study.

Second, another study was conducted during an

inventory cycle count, in which all the stock items

that were incorrectly stored, or whose location was

incorrect or unknown to the system were noted.

Among these were some items found located in

multiple locations while the system had them only in

one location on file.

4.1.3 Analyze

The goal of the “Analyze” phase in DMAIC is to

interpret the data and/or information in order to

establish the cause-and-effect relationships that

produce the flaws in the system. During the

“Analyze” phase the purpose is to develop

knowledge that will help a Lean Six Sigma team to

implement the countermeasures that address the

underlying causes of problems in the next Improve

phase of the DMAIC procedure (George 2002).

For this study and for few selected items, three

major analyses were performed including a time

study analysis, an ABC Analysis, and a run-out time

inventory analysis. Results from this three-axis study

showed that nearly 20% of the inventory counted

had either location or quantity errors. A plant-wide

study would have surely shown an even greater

deviation.

This study helped justify the need for

improvement while revealing problems such as

inaccurate stock information, poorly managed and

unorganized warehouse, low personnel productivity,

excessive inventory levels.

The ABC analysis led to the classification of

items according to their volume in stock and value in

monetary terms. The reader is referred to Heizer et

al. (2013) for details about the concepts of run-out

inventory, EOQ, re-order point, ABC analysis, and

other operations management terminology and

concepts, and to Meyers and Stewart (2002) for

details on motion and time study for lean

implementation

The run-out analysis has been conducted to

identify which items would run out first and what

should be the optimal sequence of using them while

minimizing the inventory costs. Furthermore, using

the Economical Order Quantity (EOQ) model, re-

order point and optimal order quantities were

derived for the most strategic items in the shop.

The results of the ABC analysis based on

monthly sales records and the subsequent run-out

and time analysis studies are represented in the

following graphs. Figure 1 represents the Pareto

chart used to conduct the ABC classification of the

top items in stock by on-hand quantity. Note that the

item 61004 70 # copy paper, representing 20%

accounted for the highest level of inventory on-hand.

This item (61004 70#) as well as both offset texts

item 801210000 50# and item 100960 60#, fourth

and seventh on the ABC Pareto classification,

respectively, are items set aside for a wholesale job

of calendars. The ABC analysis is based on Pareto’s

rule of 20/80.

Figure 1: ABC Pareto Chart of the Top Ten On Hand

Inventory Items by Quantity.

The next highest items in volume were the envelope

stocks (item 30001).

In order to keep the analysis simple, this study

decided to only track these four envelope stocks

(second, third, fifth, and sixth on the Figure 1 of the

Pareto ABC classification) because they are run on

the same machine and in the same department.

This study anticipated that after a thorough

analysis of inventory on-hand and material handling

the results derived for these four items would be

indicative of the general situation in the factory and,

therefore, could be used for the overall improvement

of the entire system.

The value of the Pareto principle for a

practitioner is that it reminds him/her to focus on the

20 percent that matters. The reader is referred to

authors such as Heizer et al. (2013) and Krajeski et

al.(2013) for more complete details and examples on

ABC classification and run-out time inventory

management.

The derived classification consists of grouping

items according to annual sales volume, in an

attempt to identify the small number of items that

will account for most of the annual sales volume and

ICINCO2014-11thInternationalConferenceonInformaticsinControl,AutomationandRobotics

702

that would be the most important to control for an

effective inventory management, following the

20/80 rule of the Pareto theory.

In this study, after analysis the above targeted

four items were classified into three categories: A -

outstandingly important; B - of average importance;

C - relatively unimportant as a basis for a control

scheme. In theory, each category can and should

sometimes be handled in a different way, with more

attention being devoted to category A, more or less

to B, and less to C.

Figure 2 shows the revised Pareto with the four

selected/coded items. Figure 3 shows the results of

the inventory analysis comparing the monthly

demand and the inventory on-hand at the month’s

end. It is important to note that both coded items

30001 and 30002 end of month inventory on-hand

at represent more than twice the forecasted monthly

demand and required amount.

Figure 4 shows the results of the run-out time

analysis that was conducted after daily and weekly

demands were calculated. The various run-out times

for the selected items are compared to the respective

supplier’s lead time.

Figure 2: Pareto Chart for Selected Items Processed at the

Same Equipment.

MonthlyDemandandOnHandLevels

634,592

310,408

319,524

99,855

141,249

965,476

90,797

90,359

200,000

400,000

600,000

800,000

1,000,000

1,200,000

30001 30002 80004 801032057

ITEMNUMBER

MonthlyDemand

OnHandatMonthsEnd

Figure 3: Monthly Demand vs. On hand Inventory Levels

for Four Selected Coded Items.

RunoutTimeAnalysisResults

15 15

30001 30002 80004 801032057

ITEMNUMBER

RunoutTimeofOn

HandatMonthsEnd

SupplierLeadTime

Figure 4: Run-out Time in Days vs. Supplier Lead Time

for Four Selected Coded Items.

It is important to note the lack of correlation

between the suppliers’ lead times and the number of

days covered by the stock on-hand. Coded items

30001 and 30002 have over 40 days worth of stock

with a lead time of just only 2 days. A simple

implementation of a Just-In-Time structure would

reduce the inventory level and the associated holding

costs. To the contrary, both items 80004 and

801032057 are dangerously close to the reorder

point threshold as shown in Figure 4.

Based on the results accumulated so far in this

study, it becomes appropriate at this stage of

analysis to initiate the second step of the approach

used in this study and already deploy some of the

Lean tactical tools in the rest of the DMAIC phases.

4.2 Second Step Tactical Approach:

Utilization of Lean Tools and

Techniques

As said earlier, a combination of Lean and Six

Sigma tools were used.in order to make this study

powerful and robust. In a first step Six Sigma tools

were deployed through a DMAIC procedure to

Define the problem, Measure its extent, and Identify

(Analyze) the causes. Now that the causes are

known and the cause-and-effect relationships

established, the study moves to the second step of its

approach, the use of Lean tools to Improve and

Control the system.

4.2.1 Improve

In the “Improve” phase of a DMAIC procedure the

goal is to develop solutions targeted at the confirmed

causes as identified in the Analyze phase (George

2002). Based upon the findings from the several

analyses conducted throughout this study it became

clear that the gap between the current ERP software,

MaterialHandling,InventoryandProductivityImprovement-ALeanSixSigmaApproachCaseStudy

703

the materials handling system and the crew needs to

be bridged. The “Lean theory” advocates the

identification of waste also known “muda” in

Japanese, followed by its reduction and or complete

elimination.

In the case of Down Town Press Inc. the two

areas of waste generation have been identified as

material handling and inventory management. In

order to reduce or eliminate this waste, this study

recommended two powerful lean tools, namely:

i) An electronic “kanban”.

ii) A warehouse-wide 5S.

“Kanban” is a visual signaling system based on

cards, plastic markers, small balls or an empty bin or

area of the floor or software-based signal that is used

to trigger an efficiency improving action.

5S is a methodology for workplace housekeeping

based on the following steps: Sorting, Setting in

order, cleaning (Shining), Standardizing and

Sustaining the discipline while keeping and

emphasizing on Safety. This tool needs to be

implemented as an inventory tool in order to

maintain the inventory on-hand for selected items at

the right amount as determined by the EOQ

approach used in the Analyze phase. This process

shall be conducted to organize stock, minimize

empty travels, stock search times and increase user

safety. The reader is referred to Heizer et. al. (2013),

Tshibangu et al. (2008), Krajeski et al. (2013) for

specific details on Lean tools and techniques

including kanban and 5S.

This study has also recommended new

technology including Forklift Fleet Management

System (FFMS) to be implemented in combination

with the techniques listed above. Among others, the

use of three VX7 full screen vehicle mounted

computers (VMC) on forklifts to track the inventory

on-hand and update the ERP in real time. This

solution requires the current ERP software to

interact with a full-size high resolution screen,

barcode scanning ability, and wireless connectivity

across the plant. Figure 5 shows the projected

working capital savings for each of the four selected

stock items in case the suggested Lean tools and

inventory forecasting techniques are implemented. A

rather large 20% cushion was used to allow for

variations in demand and possible supplier issues.

As the DMAIC procedure was being deployed

and implemented in this study, it became evident

that the “Analyze” phase was instrumental in finding

the root causes of all the problems, including: stock

information inaccuracy, low crew member

productivity and, excessive on-hand inventory

levels. Further investigation of the productivity issue

revealed that the main factors impairing productivity

achievement include:

i) Lack of procedures, organization, and

accountability; No interface communication

or interaction between the ERP software, the

material handling system and the crew

members on the floor.

ProjectedIndividualStockSavings

$7,442.64

$1,681.67

$1,860.66

$3,380.89

$420.42

$822.95

$13,523.56

$3,291.79

$0.00

$2,000.00

$4,000.00

$6,000.00

$8,000.00

$10,000.00

$12,000.00

$14,000.00

$16,000.00

30001 30002 80004 801032

ItemNumber

WeeklySavings

MonthlySavings

Figure 5: Projected Savings on four Selected Coded Items.

4.2.2 Control

The purpose of the last phase “Control” of a full

DMAIC procedure is to make sure that the gains

made throughout the other phases of the procedure

are preserved (sustained), until and unless new

knowledge and data show that there is an even better

way to operate the process (George, 2003).

For this study, in order to make sure that the

improvements/gains can be sustained, the following

actions were recommended and must be taken:

i) Random cycle counts and location audits shall

be conducted often to make sure that the physical

count and location are in accordance with the ERP

records. Cycle counts shall also be used to test the

effectiveness of the proposed kanban system.

ii) Regular meetings and frequent training

sessions should be held to discuss problems and

define corrective actions, assign tasks, and enhance

operators’ skills and/or abilities through internal

training sessions for example.

iii) Usage and applications of forecasting

methods to find the various EOQs and validate

kanban signal points.

iv) Time and productivity studies need to be

performed regularly to make sure operators are

being utilized at the maximum of their potentials.

v) Kaizen sessions need to be implemented.

Kaizen is a philosophy promoting teamwork, sharing

of ideas and continuous improvement that eliminates

waste. Figure 6 shows the projected total savings of

working capital if the kanban signaling system and

forecasting techniques for inventory management

are implemented on all four selected coded items.

ICINCO2014-11thInternationalConferenceonInformaticsinControl,AutomationandRobotics

704

ProjectedTotalInventorySavings

$6,484.92

$25,939.67

$0.00

$5,000.00

$10,000.00

$15,000.00

$20,000.00

$25,000.00

$30,000.00

Fourcombineditems

TotalweeklySavings

TotalMonthlysavings

Figure 6: Anticipated Savings From Better Inventory

Management.

5 HYPOTETHICAL EXAMPLE

OF SAVINGS GENERATED

FROM IMPLEMENTING

FLEET MANAGEMENT

SYSTEM

This section provides samples of engineering

economic calculations to illustrate how additional

savings could also be generated through the

implementation of a wireless Forklift Fleet

Management System (FFMS). Trucks and other

powered industrial vehicles are essential equipment

to the operation of warehouses and other storage

buildings.

This equipment, which includes forklifts, tow

motors, pallet jacks (walking or riding), and tractors

(or spotters) is used to move goods throughout the

building, loading docks, and trailer parking areas.

The efficient management of these important

resources has been very limited. Due to the size and

complexity of the facilities, and the unsupervised

nature of the work of the operators (like the case at

the Down Town Press Inc.) it becomes increasingly

difficult to keep track of where each piece of

equipment is located and how much work is actually

being performed.

Additionally, use by unauthorized personnel, as

well as unsafe use by authorized operators, has led

to accidents and injuries, as well as impacts, damage

goods and equipment or structures.

Currently, there is no wireless forklift fleet

management system at Down Town Press Inc. The

integration of such a technology in the operation of

business would assist in the monitoring of the

operations and maintenance of the vehicles and

batteries. The lack of a comprehensive utilization

data had caused Down Town Press Inc. to continue

to purchase and maintain more pieces of equipment

than were required to support the operation.

The current state of operations at Down Town

Press Inc. also lacks integrated logistic support

capability. Preventative maintenance (PM) schedules

are based on tasks being performed every certain

number of days, weeks, or months. This approach

completely ignores how much each piece of

equipment is actually run, creating a situation where

work-hours are spent on performing unnecessary

maintenance when other tasks could be finished with

those resources.

The proposed comprehensive FFMS will provide

a variety of useful information to plant supervision,

including the following:

 Current (approximated) location of each material

handling vehicle

 Assurance that only qualified, trained operators

have access to vehicle

 Assurance that the equipment is not operated

until a pre shift safety checklist has been

completed

 Measurement of the amount of time that operator

is logged onto vehicle

 Measurement of the amount of time that the

vehicle is in motion

 Assurance that in the event of a collision of

significant enough impact to result in injury or

damage the goods or equipment, there is

confirmation on the identity of the operator who

was responsible for the event.

In order to provide this information each piece of

material handling will be modified with a

transceiver, sensors, and an operator interface panel.

The system will be used to verify operator

authorization, will guide the operator through a pre-

shift safety checklist, and will collect data on log

and movement time.

The system will also provide estimated location

information and will record any impact events. To

provide vehicle tracking capability, a number of

transceiver gateways will be installed throughout the

facility. These units will link the vehicles to

computers which can be accessed by supervisors or

management personnel. The flow of information

that will be received through these computers can be

used to manage the daily operation of the vehicles,

as well as to make future decisions concerning the

fleet. In the calculations presented in Tables 1 and 2

below show that significant savings are generated

from a hypothetical situation of an initial fleet of 50

vehicles downsized to 45 (as a result of FFMS

integration) during the course of one 8 hour-shift.

This downsizing of 5 units from an initial 50 unit-

MaterialHandling,InventoryandProductivityImprovement-ALeanSixSigmaApproachCaseStudy

705

fleet represents a 10% fleet reduction. The proposed

model assumes an hourly labor rate of $20 for the

handlers and $25 for the maintenance crew. The

inflation and discount rates are 1.90% and 7.00%,

respectively. The annual material handlers’ savings

in cost is calculated to be $228,800 while the

maintenance crew, at 50 hours per vehicle per year

will generate a saving of $6,250 per year.

Under this model, with an initial capital

investment of $157,667 over a three year life (from

2014 to 2016), the Net Present Savings would be of

$279,357 with a Return On Investment (ROI) of

121.7%. These encouraging results could be

extrapolated to the particular case of Down Town

Press Inc. and lead to promising savings on

operational cost

6 CONCLUSIONS: EXPECTED

RESULTS AND PROJECTED

IMPROVEMENTS

The total capital investment to install the proposed

three vehicle mount computers (VMCs) on the

forklifts is approximately $15,400. The proposed

equipment will lead to an impressive Return On

Investment of 189%. The reduction of paper usage

will be gradual and departmental. The first area to

be targeted is the envelope presses in which the most

waste is currently occurring. The use of pick lists for

issuing stock will be reduced one stock item at a

time to reduce the risk of complete system failure

and to allow changes to procedures.

Additional savings would be generated by

integrating a fleet management system that would

subsequently reduce the fleet size as increased

productivity will be generated through the other

proposed changes. It has been proposed a gradual

addition of the electronic transducers to the material

handling equipment through FFMS as savings are

generated from other areas. Initial investment could

be in the range of $157,667 for a fleet size of 50

vehicles including support and training.

At the time of completion of this paper, only a

partial implementation of the proposed solutions was

underway at slow pace, justified in part by

temporary economical and financial issues at Down

Town Press Inc. coupled with a level of uncertainty

in the chaotic market exchange and a certain dose of

fear and skepticism from the management.

However, the company management has

recognized the merit and benefits of the study

including i) an actual realization of an accurate real-

Table 1: Cash Flow Analysis of Hypothetical

Implementation of Fleet Management.

FleetManagementSystem CashFlowAnalysis

HypotheticalCase

Inflation/DiscountFactors:

Inflationrate ‐ Labor 1.9%

Inflationrate ‐ other 1.4%

Discountrate 7.00%

012Total

EndofYear 2014 2015 2016

Inve stm e nt

1.Hardware‐ Site ($100,000) ($100,000)

2.InstallationManagement $0 $0

3.Hardware‐ Spares ($33,333) ($33,333)

4.Contractedsitepreparations $0 $0

5.SharedProgramCosts ($10,000) ($10,000)

Contingency(10% ) ($14,333) ($14,333)

TotalCapitalInve stm ent ($157,667) ($157,667)

OperatingVariances

EndofYear 2014 2015 2016

4.ManualHandlerLabor

savings $233,147 $237,577 $470,724

5.Maintenancelaborsavings $6,369 $6,490 $12,859

TotalOperatingVariances $239,516 $244,067 $483,583

NetCashFlow(Undiscounted) ($157,667) $239,516 $244,067 $325,916

DiscountFactor(@8.6% ) 1.0000 0.9346 0.8734

DiscountedCashFlow ($157,667) $223,847 $213,177 $279,357

Netpresentvalue@ 8.6%: $279,357

Returnoninvestment: 121.7%

time stock information through the use of VMCs, ii)

a more organized work floor as the result of 5S

implementation, iii) an appropriate and accurate

inventory tracking of stock levels due to the

combination of forecasting models and kanban

signals, iv) and a higher personnel productivity as a

consequence of manpower utilization improvement

and enhanced skills and motivation from training.

This study shows a possible reduction of

$300,000 in the yearly operating capital and the

perspective of an extremely high and appealing cost

saving from material handling, due to a proposed

10% reduction of the current fleet size as the result

of the integration of a comprehensive fleet

management system as depicted in the scenarios in

Tables 1 and 2.

Table 2: Potential Savings Under Fleet Proposed 10%

Fleet Reduction 50 Vehicles vs. 45.

ExampleofProductivityEnhancementUsing 

ForkliftFleetManagementSystem(FFMS)

Inventory Current Proposed Change

Forklifts 22 20 ‐2

Ridi ngJacks 28 25 ‐3

TOTALS 50 45 ‐5

Days/Year:

Mat eri al aHandler 286

Mai l HandlerStaffing Current Proposed Change Hours FY14Rate DailySavings AnnualSaving

8hourShift 0 0 0 8 $20.00 $160 $45, 760

Total 50 45 ‐5 ‐40 ‐$800 ‐$228,800

MaintenanceOperator

MaintenanceSavings CurrentMHECount Proposed Change Hours FY14Rate AnnualSaving

At50hrsperunitperyear 50 45 ‐5 ‐250 $25.00 ‐$6,250

It worth it to note that this improvement and the

subsequently derived monetary savings were

achieved by solely considering four items and by

maintaining them at the right stock level in a factory

that contains thousands of such items. If, in addition,

ICINCO2014-11thInternationalConferenceonInformaticsinControl,AutomationandRobotics

706

similar improvement could be generated from the

rest of items and the integration of a comprehensive

fleet management system (FFMS), the possibility for

savings and continuous business improvement

through Lean Six Sigma is seemingly endless as

evidently displayed in this study.

REFERENCES

George, M. (2002-3). Lean Six Sigma: Combining Six

Sigma Quality with Lean Speed, McGraw-Hill.

Heizer, J. and Render, B. (2013). Principles of Operations

Management, 9

Edition, Prentice Hall.

Krajeski, Ritzman, and Malhotra (2013). Operations

Management, 9

Edition, Prentice Hall.

Meyers, F. E. and Stewart, J.R., (2002). Motion and Time

study for Lean Manufacturing, 3

Edition, Prentice

Hall.

Tshibangu, W. M. Anselm and Berlinski, Stephen(2012).

Productivity Improvement Through Facility Layout

Redesign: A Lean Six-Sigma Case Study. ICINCO

2012, Proceedings of the 11

International Conference

on Informatics in Control, Automation and Robotics,

Rome, Italy, July 28-31, 2012.

MaterialHandling,InventoryandProductivityImprovement-ALeanSixSigmaApproachCaseStudy

707