Six Sigma Applied to Warehouse Operation

Topics: Process capability, Control chart, Six Sigma Pages: 11 (2698 words) Published: March 23, 2013
A project Report on

“DMAIC App to improve Warehouse Operation”

Undertaken At
xxxxxxxxxxxxxxx Warehouse
In fulfilment of Capstone Project of
Post Graduate Diploma in Industrial Engineering (PGDIE)


Rajul Agarwal (103)
Puneet Jain (107)


Under the guidance of
Dr. K. Maddulety
NITIE, Mumbai

National Institute of Industrial Engineering, Mumbai-400087


“Too often we are so preoccupied with the destination, we forget the guiding light” -anonymous
I take this opportunity to extend my sincere thanks to HCCB, India for offering a unique platform to earn exposure and garner knowledge in the field of Warehousing Management. I wish to extend my sincere and heartfelt gratitude to my guide Mr. Sudhakar Nair, Warehouse Manager HCCB who guided, supported and encouraged me during the entire tenure of the project. I sincerely thanks to Dr K. Maddulety, my faculty guide, who has been guiding me throughout the project.

1. Executive Summary
This project illustrates an approach to address the complexities faced by beverage industry by identifying critical supply chain activities which indirectly affect Customer Satisfaction. The solution is based on Six Sigma implementation through DMAIC Approach at these critical nodes. It has been established through various experiments that Customer Loyalty & Retention is very low in such industry; hence the customer satisfaction is directly affected by product unavailability. So the product availability is found to be a major concern here as it directly affects the customers buying decision. It is observed that in this industry, Product availability is majorly affected by the inconsistencies at the warehouse. This project particularly focuses on these warehousing processes which include the transportation of goods from plant to warehouse, then storing goods at warehouse and finally dispatching of goods to the customers. Based on this we have attempted to provide a blue print of possible advantages such as improved fill rates and better service levels. An empirical study was conducted at XYZ Beverage Company which produces carbonated soft drinks (CSD) and Non-Carbonated Beverages (NCB). Subsequently, its complete warehousing operation process was understood and DMAIC approach was used to improve the process dynamics. In the measure phase, using Process Capability Analysis it was found that the warehouse process doesn’t follow six sigma levels owing to the high level of damages/defectives and additionally there was a vast scope of improvement. Henceforth, Root cause analysis was done to identify the various causes of damages/defectives. The major causes identified here were lack of standardized operating procedures (SOP), over stacking & overloading. In the implementation phase, an action plan divided Phase wise, is proposed here so as to take into account variability caused by the two shifts in which the warehouse operates. A strict control needs to be followed so as to maintain six sigma levels, for which p-chart type should be used in combination with proposed Warehouse Operation check list.

Table of Contents:
Acknowledgement| …1 |
1. Executive Summary | …2|
2. Literature Review| …4|
3. Introduction| …4|
4. Process Mapping| …5|
5. Define Phase 6.1 DMAIC project Charter Worksheet 6.2 CTQ tree 6.3 Voice of Customer 6.4 Voice of Business | …5…5…5…6…6| 6. Measure Phase 7.5 data to be measured 7.6 Process sigma calculation 7.7 Statistical summary of defectives 7.8 Control chart 7.9 Process capability analysis| …6…6…7…7…8…9| 7. Analysis Phase 8.10 Root Cause analysis| …9…9| 8. Implementation Phase 9.11 Proposed action plan 9.12.1 Dividing process 9.12.2 Major Changes Identified| …10…10…10…10| 9. Control Phase 10.12 identifying the controlling elements...
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