Question: Based on this scenario, would this be a good problem statement/background for an A3? Manufacturing Project Madeup Products, Inc. (MPI) is a major provider of
Based on this scenario, would this be a good problem statement/background for an A3?
Manufacturing Project
Madeup Products, Inc. (MPI) is a major provider of specialized parts for the gas industry. MPI's biggest customer, Pittsburgh Energy Supplier (PES) was not a delighted customer this year. In fact, last Monday, the executive vice president of PES was diverted from a return trip from Singapore to drop in unexpectedly at the MPI plant. There was nothing routine about this visit. She made it explicitly clear that PES was disappointed with the level of quality relative and late products being shipped to several of their plants. In particular, she was disappointed with the current average of rejects at the rate of 20,350 defects per million opportunities (DPMO) that has created a cost of poor quality of just over $256,000 per quarter for them, even though the defects should have never made it to the PES plant. She said there are several other vendors PES uses, and none of them ship as many defects as MPI. Of all of PESs vendors that have provided similar products, most average 50 DPMO. If we do not get the level of quality to the industry standard within the next six months, MPI will lose Specific Motors as a customer.
You will be a Green Belt working for MPI.
Problem statement/background:
Our customers expect shipments with a low rate of Defects Per Million Opportunities. We are currently shipping parts at a rate of 20,350 DPMO to PES, causing them to have a cost of poor quality of just over $1,024,000 year. By cutting down our DPMO to a rate of 50 or below, we can prevent us from losing PES and Specific Motors as a customer.
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