Todd Hester Service Center First Pass Fill Improvement - Cummins

Todd Hester
Service Center
First Pass
Fill Improvement

2
Service Center First Pass Fill Improvement
Project: Improve the service center first pass fill percent from 79.2% to
83.2% while maintaining the Central Parts Warehouse fill rates at ‘Green’
level (≥86%) status.
Belt: Todd Hester
Sponsor: John Havel
RDO / Distributor / Entity: Cummins Power South
Net Annual Savings $256,660
* Savings based on reduced spend for engine down orders less
the CPS freight recovery percent per month.
Avoidance Savings: $0
Days to Close: 176
Project Closure Date: 9/23/2009
Project Closure Status: Green
CFSS: No

3
Measure Phase – Highlights
Service Center First Pass Fill Improvement
Inputs (Xs) Outputs (Ys)
Customer OE Demand
Customer WO Demand
Available Parts / Inventory
BMS Suggested Order
C/U/S
C/U
C/U
C/U
C
Service Center
Parts Order
Fulfillment
First Pass Fill Rate
RECT
Customer Satisfaction
Back Order Quantities
Xelus TSL Calculations C/U Inventory Turns
CPW Parts Availability C/U
Parts Usage History C
Parts Allocated in BMS C
WebCUMPAS Orders U
Inputs (Xs) Process Outputs (Ys)
Inbound Parts
Bin Location
C/U/S
C
C Parts Stock
On Hand Inventory
Allocation to WO / OE ticket
Itemized Parts List C Received
WO / OE Ticket C/U
Itemized Parts Stock Replinishment C
Work Order Demand C/U Customer Order
Order Entry Demand C/U
Work Order Quote C
On Hand Inventory C/U
Service Center First Pass Fill Improvement
WO/OE/CUMPAS
OE Customer
Demand
Customer Order C/U Backorder Item / Incomplete Order
Allocate Order
Filled Item / Complete Order
Fill Pass Fill Rate
Backorder Item / Incomplete Order C/U Satisfied Customer
Filled Item / Complete Order C
Invoice Customer
Backorder Parts
Unsatisfied Customer
Part Sales History C Updated TSL's
Support Stock C Xelus Usage levels Parts Stock Replinishment
Recorded Parts Usage C Updated
Branch Inventory Dollars
Failure or
Problem
Service
Center FPF
'Miss'
Summary of Failure
FTA (Fault Tree Analysis) SHEET Related Document
Part Name Service Center First Pass Fill
Abstract: This FTA investigates root Conclusion: Date
Title
Service Center First Pass Fill - Service (WO's) & Parts (OE's)
causes of missed service center FPF
parts.
Development of Causes (Result - Cause)
Action Plan
Failure Mode
(Top)
WHY?
Work Order FPF
Miss
Order Entry FPF
Miss
WHY? WHY?
WHY?
Xelus Suggested TSL
Inaccurate
Parts Not Available
Mis-use Process
Detailed Causes of (Top) Failure Mode Basic Characteristics
Unpredicatable demand
event
MDC stock not avaiable
Xelus has not yet
established a TSL
Parts Receipts Initiated
in Process at Shop
Order Qty > Max Stock
Level
Part In-Transit
Quantity on Hand
Available - Missed??
Open Order at Service
Center
Stock level depleted
prior to next delivery
Mobile (subloc) FPF
process not followed
Inconsistent use of
support stock flags
Lookup parts inventory
or cost on WO or OE
Inadequate Usage for
Min. Stock Level
Lack of Knowledge or
Training on FPF
Lack of Knowledge or
Training on FPF
Lack of Knowledge or
Training on FPF
Service Level Leadtime
CPW Backorder
Parts Usage
Receipts in Process
Xelus TSL Levels
CPW Backorder to SC
Miss
Part Item History
Order Received, not
Allocated in BMS
Sell Qty > TSL
Parts Order / Ship but
not at Branch
Part on Hand at
Branch, but not Filled
Orders Open > 30 Days
Low Qty/Ordered/Not
Replinished in Time
Mobile vs. In-Shop FPF
Misses
Standard Processes
Exist
Deleted Items from
'Live' OE / WO
Same as Sell Qty >
TSL result
80% of misses have an
est. TSL = 0
Relationship exists with
FPF & Mobile
Inconsistent use, could
incorp in training
Relationship exists with
FPF & Deletions
Presumed Failure Mechanism No Problem
Uncertain
One of the causes X
MEASURE
ANALYZE
IMPROVE
• Process Maps
• FTA
• Failure Modes and Effects
Analysis
• Multi-Vari Studies
• Design of Experiments
(DOE)
CONTROL • Control Plans
TSL
Transit Time
QOH Available
Open Orders
TSL
Training
Training
Training
15
12
7
3
3
Investigation Item
Critical Input Variables
Investigation Result
Within 2 days, orders
are not in process
4% of misses meet this
criteria
1% of misses meet this
criteria
2% of misses meet this
criteria
4% of misses meet this
criteria
Judgemen
t
Found Critical X’s
Controlling Critical X’s
X
X
X
X
X
X
X
All X’s
1st “Hit List”
Screened List

4
Analyze Phase – Highlights
58, 5.2%
46, 4.1%
41, 3.7%
41, 3.7%
20, 1.8%
2, 0.2%
6, 0.5%
8, 0.7%
12, 1.1%
1, 0.1%
Three week First Pass Fill
Branch Analysis
876, 78.8%
C ategory
Description of Misses at Service Center Locations
PNA - Not Stocked Max = 0
other
PNA - Ordered in last 7 days
Not Replinished in Time
PNA - Order Qty > Max Stock
QOH available
No Min/Max Established
PNA - Open Order > 30 days
PNA - Open Order > 90 days
Receipt Initiated - InProcess
PNA - Receipts in Process > 2 days
Roughly 17% of all misses are possible controllable factors. The remaining
83% are due to unexpected demand or current demand does not meet Xelus
requirements (usage or dollar value constraints).

5
Analyze Phase – Highlights
2508
35
19
18
1513
12 12 10 99999
988
88
8 88
8 8
8
8
Pie Chart of ITEM - MAY 09 - WO
C ategory
3886396
5261315
5261316
3886395
CC2825
4956008NX
705290
3886397
107460
2881713
4955984
4955991
4956138
8D-XHD
2881668
3010550
3056138
4955468NX
4955517NX
4955926NX
4955983
4955985
4955986
4955990
4955992
4965064
4965069
Other
WO & OE - YTD ‘Miss’ and May ‘Miss’ compared
with three week study analysis
6.2 Flt Cal. – 3886396
Common Work Order Parts Numbers:
Bulk Oil QT Valv. – 705290
Oil Prem (1 Gal) – 70509
ES CM EGR Cool – CC2825
Kit, Turbocharger – 4955992,4955990,4955991,
4955986,4955983,4955984,
4955985 (Campaign)
6.2 Cal. Sing. – 3886395
Zap IT – 3886397
� Part number misses above due to order
processing through BMS when adding
additional quantities or modifying existing
items within a work order or order entry
ticket (see BMS screen shot).

6
Analyze Phase – Highlights
� Do not change only the ‘Quantity Ordered’ column with the total quantity of the parts used on
a ‘live’ work order or order entry. When doing this, the initial FPF ‘hit’ in BMS is deleted
and replaced with a ‘FPF ‘miss’ on the reporting.
� Adding duplicate parts (parts that have been quoted in an initial quantity and later changed to
an increased quantity) has a significant effect on the first pass fill rate in the service center,
especially on work orders.

7
Analyze Phase – Highlights
FPF
1.200
1.000
0.800
0.600
0.400
0.200
0.000
Service Center Only Product Code Analysis
AUTO
CAR CECO
CERTI
FICAT CES CPP
ES
DAYC
DRC FLG
O
FLG-
EXH
INTER KIM-
LUCA
STAT HOTS
S
E TART
MERC NELS
ON
Product Code Fill Rat e 0.595 0.824 0.927 0.800 0.600 0.810 0.805 0.888 0.758 0.751 0.250 0.958 0.317 0.571 0.167 0.747 0.827 1.000 0.692 0.837 1.000 1.000 0.893 0.728 0.600
Tot al Lines / Mt h 7 13739 21 1 3 32 1547 1884 66 45 1 24 94 1 1 3102 600 0 2 14 1 0 386 252 1
Product Code
OFF-
ENG
OTHE PARK PENR RACO
ONAN
R ER AY R
RV STAG VALV
VOITH ZF
OLINE
The Onan product code has the second highest WO&OE order
lines/mth with one of the lowest fill rates of any product category.
16000
14000
12000
10000
8000
6000
4000
2000
0
Avg Lines/Mth

8
Analyze Phase – Highlights
CDS MEASURES 2009
First Pass Fill Rates
MDC to Distributor
Distributor FPF to Customer Based on
Allocation
Allocation for Exclude Min/Max

9
Analyze Phase – Defined Improvements
Process Application
FPF Recording with BMS
� Parts Inquiry Look-up
• Non-Inventory Factors
Affecting FPF –
– Flt Calibrations / Zap-It’s
– Adding duplicate parts
• Any Part / Bulk Oil /
Coolant
– Campaigns
Fulfillment Processes
� Open Orders Periodic Review
� Mobile WO Parts Fulfillment
� Engine Down Ordering
Inventory Replenishment Application
First
Pass
Fill
Inventory Stocking Performance
� Product Code Specific Review
� Xelus Settings
– Xelus supplemental information
– CPS sales - Xelus says do not
stock (Zero Target Stocking Level)
– Engine Down Orders

10
Improve Phase – Highlights
Inventory Replenishment Application
� Manual review of parts < $2 that have a 0 TSL for support stock
min/max settings.
� Establish ‘F’ parts at a 3 day lead time within Xelus to prevent “sell
one/ order one” process.
� Within the Xelus calculations, set the service level of the ‘ONAN’
product code to 97% at the CPW and to 96% at the service centers
since Onan products are a more proliferated product group within
the CPS territory.
– Note: The increase in service levels will ‘bring in’ usage on parts
within Xelus that are currently being ordered ‘Engine Down’ and
creating excessive freight costs.
� Daily review of ‘Engine Down’ orders to prevent warranty orders
placed on the factory and monitor cases where the CPW could fill
the order instead of placing an engine down order.

11
Improve Phase – Highlights
Process Application
� Develop training and education documents detailing components
of first pass fill in the service centers:
Table of contents from FPF document – (complete document found in 6S database):
First Pass Fill – Training ..........................................................................4
Overview..............................................................................................4
Objective..…………………..……………………………………………………………...……4
Terms and Definitions……………………………………………………………….5
First Pass Fill Overview.....……….………………………………………………...6
Calculation of First Pass Fill………………………………………………………..6
Frequently Asked Questions………………………….…………………..……7 - 8
Non-Inventory Factors that Affect First Pass Fill.…...........................9- 14
Changing Quantities for Duplicate Parts…………….…………………………..9 - 11
Campaign Parts Usage……………………………………………………………………...11
Parts Inquiry…………………………………………………………………………………….12
Open Purchase Orders Review……………………………………………….............12
Daily Receipts Process...……………………………………………………………………12
Non-tangible Parts - Calibration Licenses………………………………………13 - 14
Fulfillment Processes for First Pass Fill………………………………………..15
Support Stock Management……………………………………………………………….15
Managing Service Center First Pass Fill………………………………….16 - 19
Zero Target Stocking Level Report……………………………………………….16 - 17
First Pass Fill - Parts Report …..............................................................18
First Pass Fill - Service Report…………………………………………...……….……..19

12
Control & Post Project Status
Individual Value
Individual Value
0.850
0.825
0.800
0.775
0.750
0.92
0.90
0.88
0.86
0.84
1
1
B aseline I m prov e P ost P roject
9
11
17
21
I Chart of Serv ice Center FPF Perce nt by Stage
X = .792
25
31
33
41 49
O bse r v a tio n
41 51
O bse r v a tio n
61
X = .828
I Cha rt of CPW FPF Percent by Stage
B aseline F P F P roject P ost P roject
X = .867 X = .862
57
71
65
81
73
91
81
U C L= 0.8666
_
X= 0.8355
LC L= 0.8045
U C L= 0.91532
_
X= 0.87321
LC L= 0.83110