A packing process for dummies: a study towards optimisation of the non-standard production process

Philips Consumer Lifestyle in Drachten is mainly responsible for the production of shavers, but in order to promote these shavers Philips also produces dummies. Dummies are non-working shavers that can be found in stores as sample products. However, since Philips has some troubles with the dummy process, the goal of this study is to improve the dummy process at Philips. In particular the scheduling and additional operational processes, such as the gluing and packing process, should be improved. This research evaluates the current process and compares it with literature and other service order processes in order to recommend some adjustments that will lead to optimisation of the dummy process. During the analysis of the current situation at Philips, we received insight in multiple bottlenecks of different stakeholders, including the logistic department, the service department, the financial department, and the customer. The main activities that this research indicates as drawbacks to the dummy process are:  The employees have to deal with devious tasks, which unnecessary costs time and money.  Currently, there is overproduction and too much inventory, which causes obsolete dummies and costs money.  There is no financial overview of the dummy process, because there is no clear insight in the cost price of dummies and production hours are not registered. Based on these bottlenecks, this research shows a literature review and lays out the comparison with other service order processes in order to find improvements for the dummy process. During this research we found the following changes that improve the dummy process, ranked on their benefits and costs. 1. Saving the rejected Key Modules from the production run for dummies Saving the rejected Key Modules from the first production runs saves a lot of money, because they are already in the project budget and there are no extra production costs involved. Besides the low costs, another advantage of keeping these Key Modules on stock is the short lead time. The service department has enough capacity for the dummy process and therefore the dummies can be completed right after the order is received. 2. Gluing process at the service department. Keeping the gluing process at the service department, instead of gluing the dummies in the Model Shop, reduces the number of mistakes and saves money. 3. Processing the dummies by integrating a BOM in the SAP system. Using SAP to transfer the orders between departments and appropriately designing a BOM, will save time and effort, as it takes away some devious tasks, but it also contributes to better insight in inventory. Finally, this reduces the total operational cost of dummies. 4. Calculating the cost price and create separate routings A separate routing for the gluing and packing process of dummies will increase the insight in total costs. A more reliable price improves the customer satisfaction. 5. Ordering the packing material by the Material Support Group. The Material Support Group has to order the packing material based on an inventory level. This is more efficient and prevents devious jobs, as it is not the task of a project manager to order packing material. Furthermore, in this way the service department never runs out of packing material. vi 6. Scheduling service department tasks in SAP Scheduling the tasks of the service department in SAP by using the capacity and task restrictions of employees, provides insight in the backlog of this department and it gives a better overview in the work efficiency. Most of these implementations are single investments that will benefit in time, money, and effort on the long term, however, a more extensive data study should explore the exact costs and the magnitude of benefit of these different modifications. Besides these improvements, we also recommend a few subjects that require further research in order to decide whether or not these interventions can contribute to improvement.  Using single unit packing material During the analysis of the dummy orders and the use of packing material, it became clear that over 70% of the orders is not optimal packed. Therefore, it might save money when a different size of packing material is used, so less than 24 shavers per box.  Using obsolete intermediates for the dummy Key Module Instead of using the standard shaver parts for the production of dummies, the obsolete intermediates can be used for the production process as long as the shaver has the same presents. However, it is not certain if this is a better solution and saves more money that saving the rejected dummies from the first production run.  Improve communication between different departments and customer for clear specifications Better communication about the dummy specifications may reduce the number of faults and customer know what to expect so the complaints may reduce.  Schedule gluing process or the production of Key Modules in a low demand season It is interested to investigate the possibility of scheduling the gluing process of the dummies at low demand periods, because it will save money but this is only possible when a certain pattern can be found in the demand for service orders and so this requires further investigation.