Summary
iii
Summary
Cendris, a part of TNT NV, supports organisations in building sustainable customer relations and optimising their internal data and document processes. This project is based at Cendris Document Presentment (Cendris DP) which provides printing and digital services for the organisations. The company has two production factories, one in the Hague and one in Utrecht. In Utrecht an average of 90 million mailpacks are produced each year. 70% of this is transaction mail (TM) and the remaining 30% is direct mail (DM). TM is made up of invoices, bills, salary slips and other periodic, addressed mail. DM is made up of personalised advertising and company rectification mailings.
The problem faced by Cendris DP in Utrecht is not being able to produce orders within the specified cycle time. The production cycle time is not reliable enough, leading to an average of 1,5 million mailpacks being outsourced every month despite there being sufficient machine capacity. This costs Cendris DP almost €1 million per year.
Technological advancements are leading to a shift in product demand. The demand for printed transaction mail is falling whereas that of direct mail is increasing. Transaction mailings are usually periodic whereas direct mailings are often high priority productions, needed at short notice. For these orders a shorter production cycle time is needed.
This project analyses the production chain at Cendris DP in Utrecht and aims to decrease the average production cycle time as well as increase its reliability. The Lean Six Sigma improvement method is used to achieve these aims. The reduction of both waste and defects in the process is the crux of this method. The main aim is that 0,61% mailpacks are delivered late per month. The following targets are set:
1. The number of internal incidents caused by production will be 0,50% of the total number of orders per month.
2. Waste activities of the machines will account for 40% of a shift.
Summary
iv The most waste activities are caused by manual stops of production. This takes up 41% of the time available in a shift. A more detailed analysis reveals the main causes of these stops: 17% of the total shift time is spent waiting for order transfer and material transport between departments. A further 12% is spent for operator lunch and coffee breaks.
A reduction of the defects caused by the production department aims to improve the quality of production. Machine operators account for 52% of the delay caused by defects. A more detailed analysis reveals that 39% of the operator induced delays were recorded when the operator either used the wrong material or followed the work procedure. The analysis of the operator production rates reveals that operators working the night shift produce 298% more than operator working during the day or evening. This implies improvement of the production capacity is possible using current resources.
A reduction of the waste activities and defects is realised by switching the organisation from a process to a product orientated flow by introducing production teams. This improves the relation of the material department with the production floor leading to a reduction in the material waiting times. It also decreases the order waiting time between processes. Production time lost due to operator breaks is reduced by the possibility of rotating coffee breaks.
Increased operator involvement improves their motivation by increasing the responsibility they have for the production of orders. This results in a reduction in the number of operator incidents.
Waste activities are reduced by 20%, creating an extra 95 minutes of production time per shift. The reduction of defects creates 10 minutes extra production time per shift.
The extra production time per shift translates to an extra 50 hours of production time per month. Assuming the machines produce at the improved rate an extra 1,6 million mailpacks can be produced every month. It is recommended that a change in the method of planning is made to accommodate this increase in production flexibility.