Description
Companies and organisations making products and delivering, be it for profit or not for profit rely on a handful of processes to get their products manufactured properly and delivered on time. Each of the process acts as an operation for the company. To the company this is essential.
Pacific Sign & Graphics Process and Operations Strategy
Daniel Nitahara EGR 482 – Dr. Lulay April 26, 2007
Table of Contents Executive Summary ............................................................................................................ 3 Purpose............................................................................................................................ 3 Background ..................................................................................................................... 3 Strategic Planning Management ..................................................................................... 3 Innovative Planning Management .................................................................................. 3 Brand Promise................................................................................................................. 5 Results and Discussion ................................................................................................... 5 Introduction......................................................................................................................... 6 Fall Project Summary ..................................................................................................... 6 Spring Project Preview ................................................................................................... 6 Background ......................................................................................................................... 7 Strategic Planning Management ......................................................................................... 7 Innovative Planning Management ...................................................................................... 8 Brand Promise................................................................................................................... 11 Results and Discussion ..................................................................................................... 11 Conclusion ........................................................................................................................ 12 References......................................................................................................................... 13 Acknowledgements........................................................................................................... 14 Appendix........................................................................................................................... 15 Table 1.0 – Takt Time Calculations.......................................................................... 15
2
Executive Summary
Purpose
The purpose of this project is to reorganize the process and operation principles of Pacific Sign & Graphics through strategic planning management, innovative process management, and brand promise.
Background
Pacific Sign & Graphics is a custom sign manufacturer in Honolulu, Hawaii, specializing in commercial, hospitality, corporate, and custom signage. Since opening its doors in 1960, Pacific Sign & Graphics has established itself as a premiere signage company in Hawaii. Some recurrent clientele include, Hawaii Pacific Health Care, Clarence Lee Designs, Sae Designs, and Tripler Hospital. As the sign industry has evolved from craftsmanship driven industry to a technological driven industry, Pacific Sign & Graphics has had to adapt to the changing environment. The transition has allowed Pacific Sign & Graphics to reduce turnover time and improve quality in their process. However, management has not made to transition along with the operations.
Strategic Planning Management
Separate daily task vs. strategic planning Monthly strategic planning meetings Delegate day-to-day task
Innovative Planning Management
One of the “vital” elements for Pacific Sign & Graphics is the process and operation efficiency. Currently, Pacific Signs has the technology to be productive and operate successfully, but is not efficient. Non-Value Added time is the amount of lead time between job process operations. Because the majority of time is spent performing nonvalue added processes, indicated in Figure 0.1, allocating value added time efficiently could minimize the impact of non-value added time.
3
Place Order Job Ordering
Value Added
Non-Value Added
Deliver Order
Employee Lead Time
Fabrication Assembly
0
5 Days of Job Duration Figure 0.1. Employee Lead Time (Non-Value Added)
10
Using the concept of lean manufacturing used by Leatherman Tool Group, Inc.1, the takt time was calculated to determine how much time was needed to complete a single process during fabrication, indicated in Figure 0.2. Takt time = Available time per day ÷ Demand of process per day Takt Time Router Silk Screen Spray Digital Print/Plotter Days/Process 7.81 9.96 13.42 6.29
Figure 0.2. Takt Time Through interpolating the takt time, the need for each process per week at Pacific Sign & Graphics is determined. As indicated in Figure 0.3, a process schedule can be planned to minimize employee lead-time. Monday Digital Print Router Spray Figure 0.3. Process Activity Schedule Tuesday Silk Screen Router Wednesday Digital Print Thursday Silk Screen Friday Digital Print
1
Jack Nichol and Rakesh Sridharan, Lean Transformation Immersion Overview, April 16, 2007.
4
Brand Promise
Plan for today, work for yesterday. This describes the chaos that running a small company entails. Basically, there are never enough hours in a day. By utilizing the concept of takt time and creating a process activity schedule, management would be able to allocate time to spend on strategic planning and improve process and operation by allocating employee to process activities on scheduled days. The brand promise for Pacific Sign & Graphics should be: Work for today, Plan for tomorrow Having a guideline to work by and remind management of the vision of the company, it helps the entire company be on the same page. The attitude and behavior of management will trickle down to employees and the results will show in the products and services.
Results and Discussion
The results of the reorganization of the process and operations principles for Pacific Sign & Graphics have yet to be determined. Implementation has not started because of the timing between this project and the company’s project schedule. However, these suggestions to the company are feasible and do not require the company to risk any profit or sales. The monetary value of the company will come with time, but without the brand foundation of the company and process and operations principles the company has no monetary growth potential.
5
Introduction
The purpose of this project is to reorganize the process and operation principles of Pacific Sign & Graphics through strategic planning management, innovative process management, and brand promise.
Fall Project Summary
Last semester’s objective was to increase profits for Pacific Sign & Graphics, Inc. through a building expansion. The proposed plan is intended to provide sufficient space to increase employee productivity and maximize operation efficiency. A feasibility analysis of a building expansion was completed. The results of the analysis, indicated in Figure 1, showed that a building expansion was feasible, as long as the additional equipment and capabilities would be able to generate and additional $250,000 in annual sales. Although this capability showed potential growth for Pacific Sign & Graphics, the risk of incurring and additional $120,000 was too much for Pacific Sign & Graphics to take on without the guarantee of maintaining the same profit margin
Pre Sales Costs Net Income % of Sales 1,063,172 1,029,670 24,790 2% Post 1,250,000 1,160,000 4,191 0.34% % Change 18% 13%
Figure 1. Pre and Post Construction Sales, Cost, Income
Spring Project Preview
An alternative way to increase profits without getting bigger was to use concept of lean manufacturing. In manufacturing plants, implementing just-in-time production has resulted in reductions estimated at 20% - 40% in production costs; 60% - 80% in inventory; up to 90% in rejection rates; 90% lead times; and 50% in scrap, rework, and warranty cots. Furthermore, increases of 30% - 50% in direct labor productivity and of 60% in indirect labor productivity have also been achieved2. Without incurring additional costs, Pacific Sign & Graphics could reduce costs by operating more efficiently, reducing non-value added activity. I started the project by starting with the art department. Based upon my feedback from evaluations by the all personnel of Pacific Sign & Graphics, most frustration with organization rested with the art department. After weeks of looking at how to improve the job process through the art department, the analysis resulted in more complicated problems that began to detour from the original project objective. In another class, the CEO of Leatherman Tool Group, Jack Nichol spoke about their operations strategy. Based upon their presentation, I realized that
2
Leondes, Cornelius T., Computer Aided and Integrated Manufacturing System: Intelligent Systems Technologies. World Scientific Publishing Company; 2003.
6
Pacific Sign & Graphics encountered the same problem. The problem was not with the job process, but with management. The reorganization of process and operational principles starts with management.
Background
Richard Yoshizawa started Pacific Sign & Graphics 46 years ago, after returning to Honolulu from New York. Richard started Pacific Sign & Graphics silk screening logos on vehicles. Today, the second generation business is operated by Nathan and Lynn Nitahara and Craig and Cheryl Sumida. From its humble beginnings, Pacific Signs has grown to become one of Hawaii’s leading sign manufacturers. Some past notable clients of Pacific Sign & Graphics are: Sony Open Golf Tournament (1998-present) Tripler Medical Center (2004-present) Kaiser Permanente Medical Center (1985-present) Hawaiian Open Golf Tournament (1965-1998) Honolulu International Airport (1962)
The family owned/operated company is located in Honolulu, Hawaii. Pacific Signs employs 12 full-time and 2-3 half-time persons. Pacific Signs offers full service signage services from design to installation, specializing in commercial, hospitality, corporate, and custom signs. Pacific Sign’s services include: Fabrication ADA Signs Screen Printing Vinyl Graphics Graphic Design Digital Printing Installation As the sign industry has evolved from craftsmanship driven industry to a technological driven industry, Pacific Sign & Graphics has had to adapt to the changing environment. The transition has allowed Pacific Sign & Graphics to reduce turnover time and improve quality in their process. However, management has not made to transition along with the operations.
Strategic Planning Management
Pacific Sign & Graphics is a small business. Unlike large corporations, Pacific Sign & Graphics does not have the capability of hiring managers to oversee day-to-day operations. Everyone involved with the company wears many caps to successfully accomplish day-to-day tasks. However, management is still responsible for the strategic planning of the company. Accomplishing both daily tasks and strategic planning can be done through three actions: Separate daily task vs. strategic planning 7
-
Monthly strategic planning meetings Delegate day-to-day tasks
Separating daily tasks vs. strategic planning is a small, but necessary action. This involves allocating a portion of time per day to strategic planning. For Pacific Sign & Graphics, each member of management should allocate 25 – 30% of each workday to strategic planning. Shown in Figure 2.
|-------------------------------------------+-------------|
75% Daily Tasks 25% Strategic Planning
Figure 2. Daily Tasks vs. Strategic Planning Monthly Strategic planning meetings are designed to keep all management on the same page of the direction of the company. Within management, every person has a different view of how operations should be run. Although each member of management is responsible for a different department of the company, all departments are involved in each job process. The differences between departments and management causes miscommunication and disorganization within the company. Identifying and defining “vital” elements of the company will keep management on the same page. The vital elements are based upon the decisions that will be guiding elements for the company in the future. In order to start strategically planning management cannot be caught up with day-to-day tasks. Delegation of day-to-day tasks by management will allow time for management to use for strategic planning, as well as, instill greater responsibility to employees. If employees are able to manage themselves, then the entire company benefits. Empowering the employees will encourage them to be more productive.
Innovative Planning Management
One of the “vital” elements for Pacific Sign & Graphics is the process and operation efficiency. Currently, Pacific Signs has the technology to be productive and operate successfully, but is not efficient. Non-Value Added time is the amount of lead time between job process operations. Because the majority of time is spent performing nonvalue added processes, indicated in Figure 3, allocating value added time efficiently could minimize the impact of non-value added time.
8
Place Order Job Ordering
Value Added
Non-Value Added
Deliver Order
Employee Lead Time
Fabrication Assembly
0
5 Days of Job Duration
10
Figure 3. Employee Lead Time Using the concept of lean manufacturing used by Leatherman Tool Group, Inc., the takt time was calculated to determine how much time was needed to complete a single process during fabrication3. The allocation of time will allow Pacific Sign & Graphics to schedule process activities and utilize employees for other process activities during lead time. Takt Time is the amount of time needed to complete an activity to meet the current demand. At Leatherman, takt time is used to calculate the amount of time needed to produce a single unit of product to meet the current demand. Takt time = Available time per day ÷ Demand of process per day In order for Pacific Sign & Graphics to use the same concept, the demand was translated to the demand for the use of specific process. In the fabrication process, material is sent to different departments depending on the type of sign ordered and the process requested. To calculate the demand of each process, the total amount of jobs during the last three months were counted. Indicated in Figure 4, the amount of jobs requiring a specific process was determined. Process Demand Router Silk Screen Spray Digital Print/Plotter Total Jan 20 15 13 25 50 % 40% 30% 25% 50% Feb 16.8 12 9.6 21.6 48 % 35% 25% 20% 45% March 21 18 11 25 52 % 40% 35% 22% 48% 3 Month Total 58 45 34 72
Figure 4. Process Demand (Jan, Feb, Mar, 2007)
3
Jack Nichol and Rakesh Sridharan, Lean Transformation Immersion Overview, April 16, 2007.
9
After determining the demand for each process during the last three months, the demand per work day was calculated. Indicated in Figure 5, the demand for each process per day will be used to calculate the takt time for each process. Process Router Silk Screen Spray Digital Print/Plotter Demand/Day 0.96 0.75 0.56 1.19
Figure 5. Process Demand per Day Using 7.5 hours of work time available per day the takt time was calculated. As indicated in Figure 6, the takt time for each process is the amount of days needed to complete one job in order to meet the demand. Takt Time Router Silk Screen Spray Digital Print/Plotter Days/Process 7.81 9.96 13.42 6.29
Figure 6. Takt Time per Process Through interpolation of the takt time and need for each process per week at Pacific Sign & Graphics. The amount of days per week each process needs to be in activity can be determined, as seen in Figure 7. As indicated in Figure 8, a process schedule can be planned to minimize employee lead time. Process Activity Router Silk Screen Spray Digital Print/Plotter Per Week 2 2 1 3
Figure 7. Process Activity per Week Monday Digital Print Router Spray Figure 8. Process Activity Schedule Tuesday Silk Screen Router Wednesday Digital Print Thursday Silk Screen Friday Digital Print
10
Establishing a process activity schedule will provide Pacific Sign & Graphics the ability to increase the employees without adding employees. Instead of the current style of operations, where each process activity runs every day on a job demand basis, creating a process activity schedule will allow for additional employee to work in other departments. Implementing a process activity schedule will allow management to plan job schedules in a better organized structure.
Brand Promise
The final part of reorganizing the process and operational principles of Pacific Sign & Graphics is recreating the brand promise. The brand promise can be described as the values and principles that guide the company. This is an important part the present and future success of the company. The differences within management are both, good and bad for the company. The differences provide balance to company. All the members of management have different strengths and weaknesses. The all members are able to make up for the weaknesses of the other members, creating a balanced management. The bad is the operations and strategic planning of the company. Although each member is strong in a different area of the business, the lack of communication about job production leads to miscommunication between employees and inefficiency in operations. The strategic planning for the future of the company is currently non-existent because of the requirements of attending to day-to-day tasks. If there was a brand promise for Pacific Sign & Graphics at this moment, it would be: Plan for today, work for yesterday. This describes the chaos that running a small company entails. Basically, there are never enough hours in a day. By utilizing the concept of takt time and creating a process activity schedule, management would be able to allocate time to spend on strategic planning and improve process and operation by allocating employee to process activities on scheduled days. The brand promise for Pacific Sign & Graphics should be: Work for today, Plan for tomorrow Having a guideline to work by and remind management of the vision of the company, it helps the entire company be on the same page. The attitude and behavior of management will trickle down to employees and the results will show in the products and services.
Results and Discussion
The results for reorganizing the process and operation principles for Pacific Sign & Graphics have yet to be determined. Implementation has not started because of the timing between this project and the company’s project schedule. However, these suggestions to the company are feasible and do not require the company to risk any profit or sales. The monetary value of the company will come with time, but without the brand foundation of the company and process and operations principles the company has no monetary growth potential.
11
Conclusion
During this project, going back to the fall semester, I have focused on how to improve the company through expansion and job process. However, the problem was not with the size of the company or job process, it was with management. Although management is running a successful business, the company can always get better. Through the presentation by Jack Nichol and Rakesh Sridharan of Leatherman Tool Group, I was able to use the same concept of lean manufacturing used by Leatherman and apply it to Pacific Sign & Graphics. Creating strategic planning strategy will force management to allocate time toward strategic planning and keep the vision of the company consistent. Utilizing takt time and creating process activity schedule will allocate time for employee and process activity. Other departments will be able to utilize employees during non-process activity time. Changing the brand promise for the Pacific Sign & Graphics will help management keep the vision of the company in their mind and use it as a guideline for the company.
12
References
Jack Nichol and Rakesh Sridharan, Lean Transformation Immersion Overview, April 16, 2007.
Leondes, Cornelius T., Computer Aided and Integrated Manufacturing System: Intelligent Systems Technologies. World Scientific Publishing Company; 2003.
13
Acknowledgements
I would like to thank everyone who has helped me throughout my project. Anytime I needed help each one of you were always there with open arms, taking me under your wings and guiding me towards me goal. I would not be able to do this project without all of your hard work and support. Thank you very much. • • • • • • • • • • • • • • • • • Bob McCarthy Burt Perry Dr. Khalid Khan Dr. Ken Lulay Dr. Robin Anderson Don Draper Eric Pozzo John Friess Robin Gomes Lynn Nitahara Matt Chapman Pacific Sign & Graphics Richard Yoshizawa University of Portland University of Portland, Center of Entrepreneurship University of Portland, School of Engineering University of Portland, School of Business
14
Appendix
Table 1.0 – Takt Time Calculations
Available Time Work Less: Lunch time Less: Morning Set-up Less: Afternoon Clean-up Total Available Time Work Hrs/Day 8.5 0.5 0.25 0.25 7.5 3 Month Total 58 45 34 72
Job Demand Router Silk Screen Spray Digital Print/Plotter Total Demand Router Silk Screen Spray Digital Print/Plotter Takt Time Router Silk Screen Spray Digital Print/Plotter Process Activity Router Silk Screen Spray Digital Print/Plotter
Jan 20 15 13 25 50 Demand/Day 0.96 0.75 0.56 1.19 Days/Process 7.81 9.96 13.42 6.29 Per Week 2 2 1 3
% 40% 30% 25% 50%
Feb 16.8 12 9.6 21.6 48
% 35% 25% 20% 45%
March 21 18 11 25 52
% 40% 35% 22% 48%
15
doc_343650879.pdf
Companies and organisations making products and delivering, be it for profit or not for profit rely on a handful of processes to get their products manufactured properly and delivered on time. Each of the process acts as an operation for the company. To the company this is essential.
Pacific Sign & Graphics Process and Operations Strategy
Daniel Nitahara EGR 482 – Dr. Lulay April 26, 2007
Table of Contents Executive Summary ............................................................................................................ 3 Purpose............................................................................................................................ 3 Background ..................................................................................................................... 3 Strategic Planning Management ..................................................................................... 3 Innovative Planning Management .................................................................................. 3 Brand Promise................................................................................................................. 5 Results and Discussion ................................................................................................... 5 Introduction......................................................................................................................... 6 Fall Project Summary ..................................................................................................... 6 Spring Project Preview ................................................................................................... 6 Background ......................................................................................................................... 7 Strategic Planning Management ......................................................................................... 7 Innovative Planning Management ...................................................................................... 8 Brand Promise................................................................................................................... 11 Results and Discussion ..................................................................................................... 11 Conclusion ........................................................................................................................ 12 References......................................................................................................................... 13 Acknowledgements........................................................................................................... 14 Appendix........................................................................................................................... 15 Table 1.0 – Takt Time Calculations.......................................................................... 15
2
Executive Summary
Purpose
The purpose of this project is to reorganize the process and operation principles of Pacific Sign & Graphics through strategic planning management, innovative process management, and brand promise.
Background
Pacific Sign & Graphics is a custom sign manufacturer in Honolulu, Hawaii, specializing in commercial, hospitality, corporate, and custom signage. Since opening its doors in 1960, Pacific Sign & Graphics has established itself as a premiere signage company in Hawaii. Some recurrent clientele include, Hawaii Pacific Health Care, Clarence Lee Designs, Sae Designs, and Tripler Hospital. As the sign industry has evolved from craftsmanship driven industry to a technological driven industry, Pacific Sign & Graphics has had to adapt to the changing environment. The transition has allowed Pacific Sign & Graphics to reduce turnover time and improve quality in their process. However, management has not made to transition along with the operations.
Strategic Planning Management
Separate daily task vs. strategic planning Monthly strategic planning meetings Delegate day-to-day task
Innovative Planning Management
One of the “vital” elements for Pacific Sign & Graphics is the process and operation efficiency. Currently, Pacific Signs has the technology to be productive and operate successfully, but is not efficient. Non-Value Added time is the amount of lead time between job process operations. Because the majority of time is spent performing nonvalue added processes, indicated in Figure 0.1, allocating value added time efficiently could minimize the impact of non-value added time.
3
Place Order Job Ordering
Value Added
Non-Value Added
Deliver Order
Employee Lead Time
Fabrication Assembly
0
5 Days of Job Duration Figure 0.1. Employee Lead Time (Non-Value Added)
10
Using the concept of lean manufacturing used by Leatherman Tool Group, Inc.1, the takt time was calculated to determine how much time was needed to complete a single process during fabrication, indicated in Figure 0.2. Takt time = Available time per day ÷ Demand of process per day Takt Time Router Silk Screen Spray Digital Print/Plotter Days/Process 7.81 9.96 13.42 6.29
Figure 0.2. Takt Time Through interpolating the takt time, the need for each process per week at Pacific Sign & Graphics is determined. As indicated in Figure 0.3, a process schedule can be planned to minimize employee lead-time. Monday Digital Print Router Spray Figure 0.3. Process Activity Schedule Tuesday Silk Screen Router Wednesday Digital Print Thursday Silk Screen Friday Digital Print
1
Jack Nichol and Rakesh Sridharan, Lean Transformation Immersion Overview, April 16, 2007.
4
Brand Promise
Plan for today, work for yesterday. This describes the chaos that running a small company entails. Basically, there are never enough hours in a day. By utilizing the concept of takt time and creating a process activity schedule, management would be able to allocate time to spend on strategic planning and improve process and operation by allocating employee to process activities on scheduled days. The brand promise for Pacific Sign & Graphics should be: Work for today, Plan for tomorrow Having a guideline to work by and remind management of the vision of the company, it helps the entire company be on the same page. The attitude and behavior of management will trickle down to employees and the results will show in the products and services.
Results and Discussion
The results of the reorganization of the process and operations principles for Pacific Sign & Graphics have yet to be determined. Implementation has not started because of the timing between this project and the company’s project schedule. However, these suggestions to the company are feasible and do not require the company to risk any profit or sales. The monetary value of the company will come with time, but without the brand foundation of the company and process and operations principles the company has no monetary growth potential.
5
Introduction
The purpose of this project is to reorganize the process and operation principles of Pacific Sign & Graphics through strategic planning management, innovative process management, and brand promise.
Fall Project Summary
Last semester’s objective was to increase profits for Pacific Sign & Graphics, Inc. through a building expansion. The proposed plan is intended to provide sufficient space to increase employee productivity and maximize operation efficiency. A feasibility analysis of a building expansion was completed. The results of the analysis, indicated in Figure 1, showed that a building expansion was feasible, as long as the additional equipment and capabilities would be able to generate and additional $250,000 in annual sales. Although this capability showed potential growth for Pacific Sign & Graphics, the risk of incurring and additional $120,000 was too much for Pacific Sign & Graphics to take on without the guarantee of maintaining the same profit margin
Pre Sales Costs Net Income % of Sales 1,063,172 1,029,670 24,790 2% Post 1,250,000 1,160,000 4,191 0.34% % Change 18% 13%
Figure 1. Pre and Post Construction Sales, Cost, Income
Spring Project Preview
An alternative way to increase profits without getting bigger was to use concept of lean manufacturing. In manufacturing plants, implementing just-in-time production has resulted in reductions estimated at 20% - 40% in production costs; 60% - 80% in inventory; up to 90% in rejection rates; 90% lead times; and 50% in scrap, rework, and warranty cots. Furthermore, increases of 30% - 50% in direct labor productivity and of 60% in indirect labor productivity have also been achieved2. Without incurring additional costs, Pacific Sign & Graphics could reduce costs by operating more efficiently, reducing non-value added activity. I started the project by starting with the art department. Based upon my feedback from evaluations by the all personnel of Pacific Sign & Graphics, most frustration with organization rested with the art department. After weeks of looking at how to improve the job process through the art department, the analysis resulted in more complicated problems that began to detour from the original project objective. In another class, the CEO of Leatherman Tool Group, Jack Nichol spoke about their operations strategy. Based upon their presentation, I realized that
2
Leondes, Cornelius T., Computer Aided and Integrated Manufacturing System: Intelligent Systems Technologies. World Scientific Publishing Company; 2003.
6
Pacific Sign & Graphics encountered the same problem. The problem was not with the job process, but with management. The reorganization of process and operational principles starts with management.
Background
Richard Yoshizawa started Pacific Sign & Graphics 46 years ago, after returning to Honolulu from New York. Richard started Pacific Sign & Graphics silk screening logos on vehicles. Today, the second generation business is operated by Nathan and Lynn Nitahara and Craig and Cheryl Sumida. From its humble beginnings, Pacific Signs has grown to become one of Hawaii’s leading sign manufacturers. Some past notable clients of Pacific Sign & Graphics are: Sony Open Golf Tournament (1998-present) Tripler Medical Center (2004-present) Kaiser Permanente Medical Center (1985-present) Hawaiian Open Golf Tournament (1965-1998) Honolulu International Airport (1962)
The family owned/operated company is located in Honolulu, Hawaii. Pacific Signs employs 12 full-time and 2-3 half-time persons. Pacific Signs offers full service signage services from design to installation, specializing in commercial, hospitality, corporate, and custom signs. Pacific Sign’s services include: Fabrication ADA Signs Screen Printing Vinyl Graphics Graphic Design Digital Printing Installation As the sign industry has evolved from craftsmanship driven industry to a technological driven industry, Pacific Sign & Graphics has had to adapt to the changing environment. The transition has allowed Pacific Sign & Graphics to reduce turnover time and improve quality in their process. However, management has not made to transition along with the operations.
Strategic Planning Management
Pacific Sign & Graphics is a small business. Unlike large corporations, Pacific Sign & Graphics does not have the capability of hiring managers to oversee day-to-day operations. Everyone involved with the company wears many caps to successfully accomplish day-to-day tasks. However, management is still responsible for the strategic planning of the company. Accomplishing both daily tasks and strategic planning can be done through three actions: Separate daily task vs. strategic planning 7
-
Monthly strategic planning meetings Delegate day-to-day tasks
Separating daily tasks vs. strategic planning is a small, but necessary action. This involves allocating a portion of time per day to strategic planning. For Pacific Sign & Graphics, each member of management should allocate 25 – 30% of each workday to strategic planning. Shown in Figure 2.
|-------------------------------------------+-------------|
75% Daily Tasks 25% Strategic Planning
Figure 2. Daily Tasks vs. Strategic Planning Monthly Strategic planning meetings are designed to keep all management on the same page of the direction of the company. Within management, every person has a different view of how operations should be run. Although each member of management is responsible for a different department of the company, all departments are involved in each job process. The differences between departments and management causes miscommunication and disorganization within the company. Identifying and defining “vital” elements of the company will keep management on the same page. The vital elements are based upon the decisions that will be guiding elements for the company in the future. In order to start strategically planning management cannot be caught up with day-to-day tasks. Delegation of day-to-day tasks by management will allow time for management to use for strategic planning, as well as, instill greater responsibility to employees. If employees are able to manage themselves, then the entire company benefits. Empowering the employees will encourage them to be more productive.
Innovative Planning Management
One of the “vital” elements for Pacific Sign & Graphics is the process and operation efficiency. Currently, Pacific Signs has the technology to be productive and operate successfully, but is not efficient. Non-Value Added time is the amount of lead time between job process operations. Because the majority of time is spent performing nonvalue added processes, indicated in Figure 3, allocating value added time efficiently could minimize the impact of non-value added time.
8
Place Order Job Ordering
Value Added
Non-Value Added
Deliver Order
Employee Lead Time
Fabrication Assembly
0
5 Days of Job Duration
10
Figure 3. Employee Lead Time Using the concept of lean manufacturing used by Leatherman Tool Group, Inc., the takt time was calculated to determine how much time was needed to complete a single process during fabrication3. The allocation of time will allow Pacific Sign & Graphics to schedule process activities and utilize employees for other process activities during lead time. Takt Time is the amount of time needed to complete an activity to meet the current demand. At Leatherman, takt time is used to calculate the amount of time needed to produce a single unit of product to meet the current demand. Takt time = Available time per day ÷ Demand of process per day In order for Pacific Sign & Graphics to use the same concept, the demand was translated to the demand for the use of specific process. In the fabrication process, material is sent to different departments depending on the type of sign ordered and the process requested. To calculate the demand of each process, the total amount of jobs during the last three months were counted. Indicated in Figure 4, the amount of jobs requiring a specific process was determined. Process Demand Router Silk Screen Spray Digital Print/Plotter Total Jan 20 15 13 25 50 % 40% 30% 25% 50% Feb 16.8 12 9.6 21.6 48 % 35% 25% 20% 45% March 21 18 11 25 52 % 40% 35% 22% 48% 3 Month Total 58 45 34 72
Figure 4. Process Demand (Jan, Feb, Mar, 2007)
3
Jack Nichol and Rakesh Sridharan, Lean Transformation Immersion Overview, April 16, 2007.
9
After determining the demand for each process during the last three months, the demand per work day was calculated. Indicated in Figure 5, the demand for each process per day will be used to calculate the takt time for each process. Process Router Silk Screen Spray Digital Print/Plotter Demand/Day 0.96 0.75 0.56 1.19
Figure 5. Process Demand per Day Using 7.5 hours of work time available per day the takt time was calculated. As indicated in Figure 6, the takt time for each process is the amount of days needed to complete one job in order to meet the demand. Takt Time Router Silk Screen Spray Digital Print/Plotter Days/Process 7.81 9.96 13.42 6.29
Figure 6. Takt Time per Process Through interpolation of the takt time and need for each process per week at Pacific Sign & Graphics. The amount of days per week each process needs to be in activity can be determined, as seen in Figure 7. As indicated in Figure 8, a process schedule can be planned to minimize employee lead time. Process Activity Router Silk Screen Spray Digital Print/Plotter Per Week 2 2 1 3
Figure 7. Process Activity per Week Monday Digital Print Router Spray Figure 8. Process Activity Schedule Tuesday Silk Screen Router Wednesday Digital Print Thursday Silk Screen Friday Digital Print
10
Establishing a process activity schedule will provide Pacific Sign & Graphics the ability to increase the employees without adding employees. Instead of the current style of operations, where each process activity runs every day on a job demand basis, creating a process activity schedule will allow for additional employee to work in other departments. Implementing a process activity schedule will allow management to plan job schedules in a better organized structure.
Brand Promise
The final part of reorganizing the process and operational principles of Pacific Sign & Graphics is recreating the brand promise. The brand promise can be described as the values and principles that guide the company. This is an important part the present and future success of the company. The differences within management are both, good and bad for the company. The differences provide balance to company. All the members of management have different strengths and weaknesses. The all members are able to make up for the weaknesses of the other members, creating a balanced management. The bad is the operations and strategic planning of the company. Although each member is strong in a different area of the business, the lack of communication about job production leads to miscommunication between employees and inefficiency in operations. The strategic planning for the future of the company is currently non-existent because of the requirements of attending to day-to-day tasks. If there was a brand promise for Pacific Sign & Graphics at this moment, it would be: Plan for today, work for yesterday. This describes the chaos that running a small company entails. Basically, there are never enough hours in a day. By utilizing the concept of takt time and creating a process activity schedule, management would be able to allocate time to spend on strategic planning and improve process and operation by allocating employee to process activities on scheduled days. The brand promise for Pacific Sign & Graphics should be: Work for today, Plan for tomorrow Having a guideline to work by and remind management of the vision of the company, it helps the entire company be on the same page. The attitude and behavior of management will trickle down to employees and the results will show in the products and services.
Results and Discussion
The results for reorganizing the process and operation principles for Pacific Sign & Graphics have yet to be determined. Implementation has not started because of the timing between this project and the company’s project schedule. However, these suggestions to the company are feasible and do not require the company to risk any profit or sales. The monetary value of the company will come with time, but without the brand foundation of the company and process and operations principles the company has no monetary growth potential.
11
Conclusion
During this project, going back to the fall semester, I have focused on how to improve the company through expansion and job process. However, the problem was not with the size of the company or job process, it was with management. Although management is running a successful business, the company can always get better. Through the presentation by Jack Nichol and Rakesh Sridharan of Leatherman Tool Group, I was able to use the same concept of lean manufacturing used by Leatherman and apply it to Pacific Sign & Graphics. Creating strategic planning strategy will force management to allocate time toward strategic planning and keep the vision of the company consistent. Utilizing takt time and creating process activity schedule will allocate time for employee and process activity. Other departments will be able to utilize employees during non-process activity time. Changing the brand promise for the Pacific Sign & Graphics will help management keep the vision of the company in their mind and use it as a guideline for the company.
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References
Jack Nichol and Rakesh Sridharan, Lean Transformation Immersion Overview, April 16, 2007.
Leondes, Cornelius T., Computer Aided and Integrated Manufacturing System: Intelligent Systems Technologies. World Scientific Publishing Company; 2003.
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Acknowledgements
I would like to thank everyone who has helped me throughout my project. Anytime I needed help each one of you were always there with open arms, taking me under your wings and guiding me towards me goal. I would not be able to do this project without all of your hard work and support. Thank you very much. • • • • • • • • • • • • • • • • • Bob McCarthy Burt Perry Dr. Khalid Khan Dr. Ken Lulay Dr. Robin Anderson Don Draper Eric Pozzo John Friess Robin Gomes Lynn Nitahara Matt Chapman Pacific Sign & Graphics Richard Yoshizawa University of Portland University of Portland, Center of Entrepreneurship University of Portland, School of Engineering University of Portland, School of Business
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Appendix
Table 1.0 – Takt Time Calculations
Available Time Work Less: Lunch time Less: Morning Set-up Less: Afternoon Clean-up Total Available Time Work Hrs/Day 8.5 0.5 0.25 0.25 7.5 3 Month Total 58 45 34 72
Job Demand Router Silk Screen Spray Digital Print/Plotter Total Demand Router Silk Screen Spray Digital Print/Plotter Takt Time Router Silk Screen Spray Digital Print/Plotter Process Activity Router Silk Screen Spray Digital Print/Plotter
Jan 20 15 13 25 50 Demand/Day 0.96 0.75 0.56 1.19 Days/Process 7.81 9.96 13.42 6.29 Per Week 2 2 1 3
% 40% 30% 25% 50%
Feb 16.8 12 9.6 21.6 48
% 35% 25% 20% 45%
March 21 18 11 25 52
% 40% 35% 22% 48%
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