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PVR and How the Cookie

Crumbles

Lynne B. Hare

Kraft Foods

East Hanover, NJ 07936

Annual Quality Congress

May, 2002

Slide 1


Outline

• Why is PVR important?

• What is PVR?

• What is required?

• What is unique about this approach?

• How has it been successful?

Annual Quality Congress

May, 2002

Slide 2


Why PVR is Important?

Reduction

of Variation

Greater Throughput

• Reduced scrap & rework

• Fewer line stoppages

• Greater planning efficiencies

Higher Average Quality

• Happier customers

•Repeat sales

Annual Quality Congress

May, 2002

Slide 3


Why PVR is Important?

PVR might even restore Hare!

Annual Quality Congress

May, 2002

Slide 4


1. Choose production line

with greatest losses and

highest potential for

cost savings

2. Study line and

develop process flow

diagram

7. Graph resulting data

Tools: run chart, control chart,

histogram

What is PVR?

8. Examine graphs for special

effects and carry out data analysis

Tools: scatter plots, ANOVA, variance

component analysis

3. Develop suitable

quality and productivity

metrics for line, get

estimates of metrics

4. Identify variance

sources and where

they enter line

No

Are large

effects

present?

Yes

9. Develop and implement

a strategy to eliminate

special causes

Tools: brainstorming, cause &

effect diagrams, Pareto charts,

FMEA, DOE, RSM

5. Choose process step where

the losses are most costly or

consequences of poor

quality are greatest

Should other

unit operations be

studied?

No

11. Implement procedures

to hold the gains

Tools: control charts, audits

6. Develop and implement

a data collection plan

consistent with variation

sources

Yes

10. Move to the next most

costly unit operation

Move to the next most

costly production line

Annual Quality Congress

May, 2002

Slide 5


What is PVR?

1. Work where financial waste is.

2. “You can observe a lot just by watching.”

Then draw a process flow diagram.

3. Understand measurement precision and

accuracy. Assure correct KPIs.

4. Mark the flow diagram to indicate where

gremlins can creep into the process.

Annual Quality Congress

May, 2002

Slide 6


What is PVR?

5. Choose the process step where the losses

are most costly or consequences of poor

quality are greatest.

6. Collect the right amount of the right kind

of data.

• Problems are usually upstream of the pain.

• Get subject matter experts involved.

Annual Quality Congress

May, 2002

Slide 7


What is PVR?

7. Always, always, always, without

exception, plot the data – and look at the

plot.

– Plot data several ways: run chart, histogram,

scatter diagrams, etc.

– Use it to learn; use it to communicate.

– If this isn’t clear, see the next slide.

Annual Quality Congress

May, 2002

Slide 8


Hare’s First Rule of Data Analysis:

• Spanish: Siempre, siempre, siempre, sin excepción, haga un

gráfico de los datos – y mira el gráfico.

• Portugese: Sempre, sempre, sempre, sem exceção, faça um

gráfico dos dados – e analisem o gráfico.

• Dutch: Altijd, altijd, altijd, en zonder uitzondering, zet de

gegevens grafisch uit – en bekijk de grafiek.

• German: Immer, immer, immer, ohne Ausnahme, ermittle

eine grafische Darstellung der Daten – und schau den Grafik

an.

• French: Toujours, toujours, toujours, sans exception, fait

un graphique des données – et regarde le graphique.

Annual Quality Congress

May, 2002

Slide 9


What is PVR?

8. Examine graphs for special effects:

structural and assignable cause variation.

Assignable

Cause

Structural

Variation

Common

Cause

Capability

Capability plus

Structure

Performance

Total

Variation

Annual Quality Congress

May, 2002

Slide 10


Example:

Annual Quality Congress

May, 2002

Slide 11


What is PVR?

9. Develop and implement a strategy to

eliminate structural and assignable cause

variation.

10. If all the plums are harvested, move onto

the next opportunity.

11. Implement procedures to hold the gains,

once attained.

Annual Quality Congress

May, 2002

Slide 12


What is Required?

• Statistical Thinking

• Mindset

– Healthy discontent with the status quo

– Teamwork and multidisciplinary teams

– Management participation

– Data are a by-product of the manufacturing

process

• Overcoming a fear of learning

• Data sharing

Annual Quality Congress

May, 2002

Slide 13


What is Unique?

• Nothing, almost.

• Finance driven, just like Six Sigma.

• No sacred cows, just like …

• No quality gurus.

• Bottom up; then top down.

– Start small.

– Capitalize on the jealousy factor.

Annual Quality Congress

May, 2002

Slide 14


How Has it Been Successful?

• $100,000 to $150,000 on first pass.

• During 2 years, we carried out 20 such

projects.

• One domestic project netted $2,000,000

• More importantly, we changed

organizational culture. Now everyone

knows and wants PVR

• A framework has been set up for its

advancement.

Annual Quality Congress

May, 2002

Slide 15


Outline

• Why is PVR important?

• What is PVR?

• What is required?

• What is unique about this approach?

• How has it been successful?

Annual Quality Congress

May, 2002

Slide 16


Annual Quality Congress

May, 2002

Slide 17

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