Decreasing the throughput times of products in an engine overhaul environment-A research into the processes and guidelines of the Pon Power workshop

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in an engine overhaul environment

A research into the processes and guidelines of the Pon Power workshop

University of Technology Minke Albers

Graduation Report 2015.TIL.7984

MSc Transport, Infrastructure and Logistics 09-12-2015

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Author Contact

M.J. Albers Minke Albers

TUD 1534238 minkejalbers@gmail.com

09-12-2015 Piet Heinstraat 33

Graduation Report 2518 CB Den Haag

MSc Transport, Infrastructure and Logistics The Netherlands

Supervisors

prof. dr. ir. G. Lodewijks dr. ir. H. P. M. Veeke dr. ir. J. H. Baggen Company Pon Power ir. S. Uitentuis Delft University of TechnologyDelft

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Summary

This study was set out to explore whether and to what extent the throughput times of engines and components overhauled at the workshop of Pon Power can be reduced towards the Pon-Cat guidelines. This research aims to identify root causes and measures to increase the efficiency and decrease the throughput times at the workshop.

The disconnect between the current workshop throughput times and the Pon Cat guidelines had to be identified first. At the start of the research it became clear that, Pon Power actually has never measured the difference. Consequently, during the study the research set-up has changed to include gathering the needed data. The report describes this full process chronologically.

PART I – Initial analysis

Part I is the initial analysis, starting with analysis of the primary processes in the workshop and a description of the material and information flow. The processes are connected to the stakeholders, who are responsible for the different process steps. Additionally analyses like activity relationship analysis and layout analysis are used to identify the problems in the current business processes.

This first review indicates that the guidelines do not consequently correspond with the worked hours of overhauled components. According to the dataset, the throughput time is unknown ~25% of the components. Of the known throughput times, 20% of the overhauled components exceeded the Pon-Cat guidelines and 71% are below the guidelines. The data is not extensive enough to get to the root causes of why some components exceed the guideline times, while other components are actually below. Additional data gathering and measurements are needed to have insight in the distribution of time and the possible causes of exceeding Pon-Cat guidelines. Therefore, a case study is set up as next step in the empirical research to further investigate these performances.

After the initial analyses, the research goal was further refined as; to provide an advice for the performance improvement of the processes at the workshop of Pon Power and to have a more efficient workshop with throughput times that do not exceed Pon-Cat guidelines. This leads to the following research question;

What are the current throughput times of the workshop of Pon Power in relation to the Pon-Cat guidelines, are these guidelines valid and how can the throughput time be decreased, while maintaining quality and taking into account available budget, space and time?

In order to answer this main question multiple sub-questions are formulated and a research approach is described. The research approach is a combination of mostly empirical research, where theoretical work might substantiate the empirical results. The outcomes of this study are formed on qualitative and quantitative research. An outline of the methodology is proposed. The research methods include (semi-structured) interviews, a case study, observations, surveys, a brainstorm, best practices, literature and gathering information from the intranet of the company.

The aim of the case study is to deepen data of the throughput time of orders at the workshop. In the case study, components are tracked during the overhaul process at the workshop and deeply explored after. The activities measured were split up and it appeared that 67% of the time the mechanic is productive for the product and 33% of the time he is unproductive. All these 1,400 measured activities give in-depth information about the

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attribution of the worked hours and are divided in four categories; planning, communication, operational and documentation. The 19 activities that can be faster are identified.

It is concluded from the case study that the guidelines are largely achievable as long as non core activities such as waiting time for components and tools are reduced. The measurement frequency has to be increased, so N is big enough to make the proper conclusions. For the present research, the data from the case study is used. It is assumed that the current guidelines are suitable and the throughput time has to be as good as the current Pon-Cat guidelines.

Although the tasks in the workplace are characterized by a high degree of complexity and variety, there are 19 activities identified which can improve the waiting time with a maximum of 18,6%.

PART II - Redesign

Part II presents a framework, which shows a schematic way of working to the final solution and the waiting time is minimized as much as possible. According to different methods, the partial solutions are created. To decrease the waiting time, the redesign has to be implemented. The thesis outlines and assesses the following 12 partial solutions, which contribute to a more efficient workshop:

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Organize tools storage: structure the tools, in order to avoid searching time

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Prepared order toolbox: required tools per order, which eliminate walking time

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Streamline layout: relocate areas, in order to minimize walking

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Standard reporting: create a standard, easy adopting, combined report for incoming and outgoing control

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Standard order form: create a standard order form for the components for sales, in order to have the complete information needed

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Computer course: some simple lessons and structured maps can minimize computer time

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Morning meeting: a 10 minutes meeting every morning where the long-term planning, the progress of the engines, the daily schedule of the mechanics and their next order, the maintenance per mechanics and safety is discussed

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Perform task and overhaul kit: an agreement about ordering parts and a simplification in the ordering process by standard kits

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Communication: improve communication between the different stakeholders, by a get to getter before an engine overhaul and the morning meeting for communication within the workshop.

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Measurement system: an incentive system for the mechanics to write the good hours and to work as fast as possible. A standard query for these times has to be made.

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Outsourcing task: outsource the easy tasks of a mechanic to a cheaper labor

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Layout workshop: many means and other possibilities can improve the layout of the workshop. The partial solutions are described per category and show which activities they affect. They are also rated against the identified criteria from the research question; quality, budget, space and time. During this research, some of the solutions are already successfully implemented

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vii CONCLUSIONS

It is concluded that the data provided by Pon Power indicates that the Pon-Cat guidelines do not correspond with the written hours. Accordingly, the case study shows that the written hours do not correspond with the actual worked hours. It also showed that there is a difference in worked time versus the Pon-Cat guidelines. 53% of the components were faster than the guidelines and 34% exceed the guidelines. The partial solutions can decrease the waiting time with 12%. Hereby, the throughput times of the case study improve from 34% to 15% of cases that exceed the guidelines. Therefore, the current Pon-Cat guidelines are for a large part achievable when decreasing the waiting time using the partial solutions. Based on this information it is concluded that the Pon-Cat guidelines are mainly valid.

In order to have a better understanding of the throughput time of the products, it is important to collect more data. A measurement system that determines the correct made hours of the mechanics is required.

Based on these research findings on the achieved data, a redesign for the performance improvement of the processes at the workshop of Pon Power is given. If well implemented this could result in a more efficient workshop with throughput times for 85% as good as the current Pon-Cat guidelines. The outcomes of the study give a better view on the throughput times, a decrease in waiting time by 12% and a higher customer satisfaction rate.

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Preface

This report contains my master’s thesis research into the workshop of Pon Power. The focus of my research is on the operations and logistics in a workshop that overhauls Caterpillar engines and components. The thesis is part of the Transport, Infrastructure and Logistics (TIL) masters program of the Delft University of Technology. Research and tests were carried out from April 2015 until December 2015 at Pon Power in Papendrecht.

By finishing this Master Thesis, my amazing period as a student in Delft has finished. The last seven months at Pon Power have been a great experience in which I learned a lot, in particular about handling different stakeholders, bringing different needs together in a solution, coordinate workshops, engines, the cooperation within a company and myself.

The graduation committee who supervised me during the research, consisted of the following persons:

prof. dr. ir. G. Lodewijks Delft University of Technology

dr. ir. H. P. M. Veeke Delft University of Technology

dr. ir. J.H. Baggen Delft University of Technology

ir. S. Uitentuis Pon Power

First of all, I would like to thank the whole committee for their time and effort in supporting me during the creation of this thesis. I would like to thank my supervisors from the university; Hans Veeke and John Baggen for their guidance and helpful advice. My gratitude goes as well to the professor, Gabriel Lodewijks, for his keen feedback during the four presentations.

Furthermore, I would like to thank Pon Power for the opportunity to perform my research. My special appreciation goes to Steven Uitentuis who gave me this position, trusted me in my decisions and supervised me every week by discussing the progress. Thanks to the mechanics and their supervisors for helping me during this journey and showing me the way around in the workshop, with them every day at Pon Power was interesting. As Steven called it; there is never a dull moment. I would like to thank all the interviewees for their time and collaboration and Roeland as a fellow intern and helping me with my scope.

In the end, my special thanks goes to my family for their support throughout the whole thesis adventure, where the mountains where sometimes quite steep, they consulted me, conducted spelling checks, as well as taking me on brainstorm hikes and bringing me a lot of rooibos-chai tea.

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List of Abbreviations

AC After Cooler

Cat Caterpillar

DSM District Service Manager

OC Oil Cooler

OP Oil Pump

RDS Ruil Delen Systeem Pon Power (intern reman system)

SIS Service Information System

VPS Verkoop Product Support (sell product support)

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List of Figures

Figure 1-1 The engine and component flow at the workshop. ... 15

Figure 2-1 The main process at the workshop of Pon Power ... 19

Figure 2-2 Overview components track in the workshop ... 21

Figure 2-3 Identified bottlenecks in swimlane ... 23

Figure 2-4 The proportion of overhauled components, total 208, in the beginning of 2015 ... 25

Figure 2-5 Registered hours of overhauled components from January to May 2015 ... 25

Figure 2-6 Overview of the structure and scope of the stakeholders ... 27

Figure 2-7 Proper model: a conceptual model of a system [42] ... 28

Figure 2-8 Business system model of Pon Power with possible improvements ... 28

Figure 3-1 Research framework and process ... 33

Figure 3-2 Gap analysis [3] ... 34

Figure 3-3 Steps to create targets [52] ... 38

Figure 4-1 Scope case study ... 43

Figure 4-2 Case study steps ... 43

Figure 4-3 Breakdown of time ... 45

Figure 4-4 Process with identified activities ... 45

Figure 4-5 Example overview tracked component ... 46

Figure 4-6 Overview tracked components ... 47

Figure 4-7 Overview time overhauled components... 49

Figure 4-8 Deviation times (+/-) ... 49

Figure 4-9 Distribution deviations of time ... 49

Figure 4-10 Overview deviation worked hours... 50

Figure 4-11 Written time ... 50

Figure 4-12 Distribution time ... 51

Figure 4-13 Productivity level 1 ... 52

Figure 4-14 Productivity level 2 ... 52

Figure 4-15 Unproductivity level 2 ... 53

Figure 4-16 Unproductivity level 1 ... 53

Figure 4-17 Getting tools distribution ... 54

Figure 4-18 Process & mechanic route through workshop ... 55

Figure 5-1 Improvements in the process ... 61

Figure 6-1 Steps to decrease waiting time per category ... 66

Figure 7-1 Problem to solution process overview ... 68

Figure 7-2 Movement of components through a job shop and a cell shop ... 75

Figure 7-4 New format... 77

Figure 7-6 Agenda of the morning meeting ... 79

Figure 7-8 Optimized swimlane ... 87

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Figure 0-2 Amount of products per year [43] ... 99

Figure 0-3 Organizational structure management ... 100

Figure 0-4 Organizational strructure parts and services ... 100

Figure 0-5 General process at the workshop ... 101

Figure 0-6 Layout workshop with engine and component flow ... 102

Figure 0-7 Overview track for resources ... 104

Figure 0-8 Information flow for engine ... 107

Figure 0-9 Information flow for component ... 108

Figure 0-10 Fishbone diagram ... 110

Figure 0-11 Resources distribution ... 154

Figure 0-12 Information distribution... 154

Figure 0-13 Other distribution ... 154

List of Tables

Table 2-1 Overview facts and figures engines and components... 20

Table 3-1 Chapters and related sub-questions ... 32

Table 4-1 Information per case ... 44

Table 4-2 Tracked components... 46

Table 4-3 Overview data analyses ... 55

Table 5-1 Overview activities... 59

Table 5-2 Possible improvements ... 61

Table 7-1 Overview partial solutions and sub activities ... 69

Table 7-2 Overview included means and affected activities ... 71

Table 7-4 Cost benefit analysis ... 73

Table 7-6 Informed about delay in order ... 82

Table 7-7 Budget (per 1000 euro’s) and time (scale 0-5) per partial solution ... 89

Table 7-8 Customer satisfaction survey I Table 7-9 Customer satisfaction survey II ... 90

Table 7-10 The distribution over the categories ... 91

Table 0-1 Facts Pon Power ... 99

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1 Introduction

This chapter explains the background of the research and describes the beginning of this study and the reason for conducting this research. The problem owner in this research is Pon Power. This company, the problem description, the research approach and the structure of the report are explained in the next paragraphs.

1.1 Background of the study

1.1.1 A description of the company

Pon Power and business targets

Since 2003 Pon Power is the Dutch dealer and service provider for Caterpillar engines and generators for ships and emergency power- and cogeneration plants. Pon Power is part of Pon-Cat, which is a division of the international service and trading company Pon. Caterpillar, also named Cat, is a large manufacturer of construction and mining machines, diesel and gas engines, industrial turbines and generator sets.

Pon Power services, overhauls and sells the Caterpillar’s engines and components. It is their mission to provide and service solutions for efficient conversion and control of energy, whether it concerns the propulsion of a ship or an emergency power installation. The goal of Pon-Cat is to be the best service company in the Netherlands in terms of Caterpillar engines, power systems and equipment. They serve customers in an array of industries and with a variety of power needs. The customer is an import player for Pon Power because it is the owner of the overhauled product. The customers have a financial interest and they want to have high quality work delivered within the scheduled time and offer, without any surprises.

Pon Power is the owner of the workshop, two test beds, and systematic lubrication test lab in Papendrecht and they are responsible for the field operations. The products that cannot be serviced in the field are being overhauled at the workshop in Papendrecht, which is the focus of this research.

The workshop

At the workshop diesel and gas engines and their components are repaired and overhauled according to the guidelines. The workshop is a place where the mechanics can work under optimal conditions. All the equipment is available for a complete and perfect overhaul of the engines in the 2000m2 workshop. The workshop exists of a chief workshop, a back-office and a foreman workshop, manned by about 15 mechanics. Pon Power has a platinum workshop, which means that they are rated as a 5 star facility by Cat. Cat intends for their dealers to implement proper contamination control procedures and maintain high standards, because that adds superior value. For Pon Power this is an important ranking to attract customers and generate sales. In 2014 the workshop in Papendrecht had a turnover of 1.9 million euro. More facts about Pon Power are included in Appendix A-i.

The aim is to overhaul or repair as many engines or components as possible with high quality as fast as possible. After the fire in 2003 a new workshop was built; the chief of the workshop said then: “We now have a new classified organized workshop with the most modern technology. This enables us to work really fast and efficient.” To what extent they are fast and efficient is researched in this study. The next paragraph describes the problem of this research.

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1.1.2 Problem Background

Processes at the workshop

The focus of this research is on the processes at the workshop and the throughput time of the overhauled products. Specifically concerning the throughput process in the workshop, there are two different flows at the workshop: the overhauling of an engine and the overhauling of a component. The engine consists of several components and an engine block. The current product flow at the workshop of engines and components is displayed in Figure 1-1. As the two flows differ per product type, these are the most common overhaul processes.

Figure 1-1 The engine and component flow at the workshop.

Throughput times

Both products have a leadtime and a throughput time and both values are important for the customer. The leadtime is the total amount of time that the order is physically in the workshop. Throughput time is the amount of hours that is spent on the order by the mechanics. If the throughput time increases, the costs and discontent will increase as well. The throughput time was the leading parameter in this research.

Pon-Cat guidelines

Pon Power has guidelines that indicate the throughput time that is needed for a single process, such as an overhaul of a Caterpillar engine or component. These are the Pon-Cat guidelines. The purpose of these guidelines is to provide standard reasonable repair times. These guidelines were created in 2003 by the workshop, based on the average removal and installation times and the experience of the mechanics. According to Pon Power the actual hours that are put into the product are higher than the Pon-Cat guidelines, which is caused by inefficient processes (Appendix C-xv).

The problem statement

The problem addressed in the beginning of this research is that the current logistic processes at the workshop of Pon Power are inefficient and the throughput time is higher than the Pon-Cat guidelines. Inefficiency in the problem statement indicates that variation occurs in the workshop, which is not desired. Standard procedures for the engines and components are missing. Additionally, the current logistic layout of the workshop can influence the time. The layout of the workshop in Papendrecht was designed over a decade ago. Over the years this has led to inefficiency of the workshop where the available space is not utilized optimally. The next paragraph elaborates over the scope of the research.

1.2 Framing the research problem

The focus of this study is on the workshop of Pon Power in Papendrecht. The scope includes the activities of the workshop of Pon Power in terms of process flows and throughput times. Concerning the throughput time, the performance of the workshop should be in accordance with the Pon-Cat guidelines, as this agreement leads to reliability for the customer.

Inspection assembly & Dis-Inspection Unloading

Engine

Component

Unloading assembly & Dis-Inspection

Assembly Testing Painting Loading Cleaning Inspection Editing

Assembly Extorting Conserving _{& packing} Loading Steaming Transport Process Change in process Painting Overhauled component Overhauled engine

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The objective of this report is to provide an advice for the performance improvement of the processes at the workshop of Pon Power and to have a more efficient workshop with throughput times as good as the Pon-Cat guidelines. In order to achieve this objective, an analysis of the current situation is needed and potentially a redesign of the processes of the workshop is necessary to increase the performance. This redesign increases the throughput time reliability, which will lead to a higher customer satisfaction and in the end to a higher customer loyalty.

The scope of the research converges throughout the research process. In the beginning of the research the engine and component flow were analysed. During the study, the scope was narrowed down to the component flow. The scope of research later diverges to formulate the conclusions and recommendations for both the engine flow as well as the component flow. The structure of the report is discussed in paragraph 1.4.

1.3 Research questions

1.3.1 Research question

This research is conducted for Pon Power. The object is specified in the previous paragraphs. In order to accomplish the objective of this study, it is essential to define the research question to give this study the right direction and structure. The research question given by Pon Power in the beginning of the research was:

How can the workshop of Pon Power decrease its throughput time to meet the Pon-Cat guidelines, while maintaining quality and taking into account available budget, space and time?

This research question is relevant for Pon Power, because it is the first time that a study is performed concerning the throughput time at the workshop. The focus of Pon Power lies primarily on repairing operational troubles and not solving problems permanently. The four factors quality, budget, space and time are taken into account in this research. They are requirements from the management of Pon Power. The quality of the product has to be maintained; contamination control from Cat. This is a yearly control, where Cat rates the workshop for their contamination performance. A maximum budget of 50.000 euro is available for improvements. The current available space in the workshop is the maximum of space that can be used. Finally, the time for this research was seven months. These factors are comparable with the goals of a good layout; minimal throughput time, minimal material handling costs, minimal investments, flexibility and efficient use of space [29].

1.3.2 Sub-questions

A set of sub-questions is formulated to substantiate the answer to the research question. The sub-questions answer a part of the main question. The sub-questions are answered in the upcoming chapters, each chapter will end with a conclusion that describes the answer to the question. The following sub-questions are discussed:

1. What are the primary processes of the workshop of Pon Power?

2. How are the product, resource and information flows designed and controlled?

3. Who are the most important actors in this study and which actors are involved in the processes? 4. What is the difference in worked time versus the guidelines of Pon-Cat?

1.4 Thesis outline

This report consists of two parts and contains 8 chapters. The report is in chronological order with the research that was conducted. The structure of the report is shown in Figure 1-2. The rectangles present the subject mentioned in the corresponding chapters. The report consists of;

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17 - The introduction (this chapter), which entails the research set-up, gives an introduction to the thesis, a company description, the problem description and the research approach. The initial research question and sub questions are defined here as well.

- Part I, which describes the analysis part. This part consists of multiple analyses. The initial system analysis of Pon Power defines the current processes in chapter 2. These analyses show that the research question given by the company is not properly formulated. A new research question and additional sub-questions are defined in chapter 3. In order to answer these questions an additional analysis is conducted in the form of a case study in chapter 4. Chapter 5 gives a synthesis of both analysis and is the input the redesign part.

- Part II, in which the redesign part is conducted. The redesign part starts with chapter 6 with a framework for the solutions and specifies the requirements of the redesigning. Thereafter, chapter 7 describes and elaborates the solutions.

- The conclusions and recommendations for Pon Power and further research (chapter 8).

Figure 1-2 The outline of the thesis

Ch.1 - Introduction

Ch.3 – Reframing research & Methodology

Ch.7 - Solutions towards decreasing waiting time Ch.8 - Conclusions and Recommendations Ch.2 – Initial system analysis of Pon Power P ar t I A na ly si s P ar t I I - R ed es ig n Ch.4 - Case study Ch.5 - Synthesis of the analysis part

Ch.6 - Design towards decreasing waiting time

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2 Initial system analysis of Pon Power

In the previous chapter the problem of the workshop of Pon Power is described. This chapter is an initial analysis of the system and discusses the process analysis. During the analysis of the current state the focus is on specific business processes. Within these processes the throughput time variable is the most important. To identify the current situation, data was collected from a variety of sources. The data was acquired by interviews, a survey and observation of the processes. The analyses of these processes were either qualitative such as examining the different processes at the workshop or quantitative, such as the number of overhauled products within a certain period.

Paragraph 2.1 gives an analysis of the material and information flow in the workshop. In paragraph 2.2 the relevant stakeholders of the system are identified. Paragraph 2.3 shows how the business processes are controlled. The last paragraph gives a summary of the findings.

The following sub-questions will be answered in this chapter:

2.1 Current flows in the workshop

As described in the problem definition the process flows of Pon Power are not efficient enough. A visualization of the system was created in order to provide an overview of the primary processes at the Pon Power workshop. This figure is shown in 2-1. In this main process the material flow, containing of products and resources, and the information flow is shown. In the following sub paragraphs the material and information flows are analysed. The ideal situation is that at the right time and at the right place the mechanic, the component (product), the order (information), the tools (resources) and the knowledge (information) are available.

Figure 2-1 The main process at the workshop of Pon Power Unloading

products

Order

Incoming engines Incoming components

Inspecting Disassembling Cleaning Assembling Perform test Loading Overhauled engines Overhauled compontens Scrap Material flow Information Components Fulfilled order Warehouse

Order Order Order &

extra adjustments Order

Parts Order

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2.1.1 Material flow; product and resources

Construction of an engine

The Caterpillar engines that pass the workshop are used in a wide range of industries: marine, energy, industrial and oil & gas. The engines provide power to move vessels, yachts and ships and powering data centres and hospitals. The engines have a power output from 60 kW to over 5,400 kW [4]. A Caterpillar engine consists of a block, multiple components and various parts, shown in Figure 2-3. The engine has various sizes and capacities, however the structure of the different types is largely conformed. The workshop overhauls over 30 different types of Caterpillar engines, an example of the 35 series is given in Figure 2-2.

Figure 2-2 Example of a Caterpillar engine, type 3520

Processes in the workshop

The general flow of engines and components is displayed in Figure 1-1. These flows use a Structured Analysis and Design Technique (SADT) model to show the primary processes. This technique is chosen because it results in a logical overview [5]. It shows a hierarchic system and gives the possibility to zoom into the different processes. The two processes cleaning and editing are divided in several sub processes. This is shown in Appendix B-iii. This overview gives an insight into the main processes of the workshop. The detailed process was not visualized before and provides Pon Power with more insights regarding the procedures of the workshop. A Delft System Approach [42] has also been considered to use, however this technique is more difficult to understand for a layman who is not well known with this technique or with the Delft System Approach.

The engines are completely disassembled, cleaned, assembled and tested in the workshop. Some components of the engine are overhauled and modified as well and some components and parts are replaced during the revision. A component can be replaced by a Reman, a RDS or a new component. Reman are overhauled components from Caterpillar and RDS is the own exchange system of Pon Power. Some facts and figures of engines and components are given in the next table.

Table 2-1 Overview facts and figures engines and components

Average (per year) Average throughput time

Engine 50 10 – 15 days

Components 2 – 3 hours

- From engine 700

- Apart 1400

- RDS 500

Report; Combineren van reinigingsprocessen in de nieuwe fabriek van PON voor Caterpillar- en MAK-motoren (2011)

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21 Movements through the workshop

The logistic layout influences the throughput time. According to the chief and foreman workshop the layout of the workshop i inefficient and the available space is not utilized optimally (Appendix C-xv).

The analysis of the layout is separated into the engine and the component flow. The product flows are displayed in a map of the workshop; this track layout is shown in Appendix B-iv. The engine block is only moved once or twice, while the components can move in various directions through the workshop. The products go through the workshop and different kind of resources (machines) and locations are used for the specific overhaul. For the most common components a standard procedure is created. Assuming that the components arrive in a normal state at the workshop, the order of machines and locations needed to visit for that component is identified. The activity relationship analysis gives an overview of the visited locations per component [6], presented in Appendix B-v.

Following from Table 2-2, over half of the times a component arrives at expedition and is placed in the component in/out area. Over a quarter of the times the components are disassembled from an engine at the disassembly area, placed at a cart and driven to the component corner. The other quarter are RDS components. Assuming the components start in the in/out area, the paths are tracked and displayed in the map of the workshop, in Figure 2-2. The map shows a criss-cross of paths.

Figure 2-2 Overview components track in the workshop

Besides machines, other resources are required as well; all kinds of tools are needed for an overhaul. The mechanic has to walk towards different locations to get these tools. In this case the product itself does not have to move. The locations for tools are identified and the paths are tracked, Appendix B-vi gives this overview.

Characteristics of a good layout

The characteristics of a good layout in service operations are:

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Predictable production times

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Workstations that are close together

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Limited interstage storage of materials

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Minimum movement of material

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Open plant floors

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No unnecessary rehandling of materials

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Bottleneck operations that are under control

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Easily adjustable according to changing conditions [6]

Testing Testing Office workshop Tool storage

Buffer Spraying/Extoring Assembly Cleaning Steaming Sandblasters

Cylinder head corner Extorting

Was-machine

Sanding table Was-machine Ultrasoon R a c k N e b o l N e b o l N e b o l Kottering

Fuel pomp corner

Painting Components in/out Pack table Components corner Changing corner Canteen 24 hour rack Inspection/disassembly Aftercooler Oilcooler Turbo Gears Rockerarms Oil pump Waterpump Spacer plates Cooler heat exchanger Exhaust Camshaft Thermostat

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Layout of the workshop

A significant part of the layout of the workshop is determined by the contamination control of Caterpillar. The workshop has a 5 star rating, meaning that the workshop is a platinum dealer for Cat. However, the workshop can still be optimized according to the mechanics and chief workshop. The contamination control of Cat focuses on keeping the products as clean throughout the product life cycle as they are when they roll off the production lines. To measure this they introduced quality control procedures to monitor cleanliness levels. When optimizing the workshop, these rules should be taken into account.

According to the previous analyses, multiple interviews and a brainstorm session with the mechanics numerous problems have been identified according to the layout of the workshop. The most important ones are listed below, the rest is reported in Appendix B-vii:

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Unpredictable throughput times

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Lots of walking; tools are far away

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Components in/out area is a mess; searching

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No structure in the tool cabinets

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No overview from the office at the workshop

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No separation dirty clean area in component corner

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Carts can hardly pass with an open washing machine

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4 workplaces in component corner is not enough

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A non-parallel resource flow

2.1.2 Information flow

This paragraph describes the information flow in the overhauling process at the workshop. The component and engine overhaul process with the required information is included in Appendix B-viii and ix. The completed information flow is visualized in a multifunctional process map; the Swimlane methodology visualizes both the information and physical flow, including the responsibilities of different parties [46]. This is mapped for the engine and the component flow from the moment an order arrives until the final stage of the process: the invoice. The process of an overhaul of an engine is presented in a visual overview in Figure 2-3. The bottlenecks in this flow are shown with a red line and are shown in the following overview. The description of the figure is presented in Appendix B-x. Some bottlenecks are summed;

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No order arrival standards

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Not an unequivocal manner of reporting

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Confusion about the order at the workshop

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Incoming & findings report is not clear form

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An overview of planning is missing

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Additional findings not always reported to the customer

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Segments made too late

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No clear line who orders which parts at what time

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Sometimes checkout report is forgotten

Another bottleneck is given in more detail; the order is forwarded to the workshop, but the amount of sold hours for a product is not clearly communicated to the workshop. A consistent information flow is missing; there is no standard process how the sales employees sell the products, communicate and give an order to the workshop. Because the target hours are not always known and sometimes more work is needed than expected initially, the customer may be unpleasantly surprised in terms of time and costs and will not be content.

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2.1.3 Qualitative bottlenecks

Many problems are often similar, so that by grouping similar problems a single solution can be found to a set of problems, which will save time and effort [8]. The current performances were analysed in the previous paragraphs. The processes were measured qualitative and possible causes of high throughput times are identified by observing, interviewing and surveys. In this paragraph the outcomes of these analyses are combined using a fishbone diagram (Ishikawa). Multiple delay factors are mapped in this diagram.

A fishbone diagram is a visualization tool to identify many possible causes of a problem. The problem statement is the high throughput time. The major categories of causes of the problem are identified boxes; Operational, Documentation, Planning and Communication. Every category has their own bones with possible causes relevant to the category. With the question “Why does this happen?” the bones and the deeper layers are identified [8]. The layers in the categories indicate the causal relationships, see appendix B-xi. The causes are categorized in the different flows and whether they are important factors. The importance of a cause is identified by interviewing the relevant actors and whether they estimated which causes occur the most. The red line gives the most important causes.

Explanation Fishbone diagram

“Planning” is one of the categories in the fishbone diagram. The possible causes for a delay in this field are that the planning of the orders is not feasible for the workshop and the planning is unknown to the mechanics. “Operational” is another category, the two possible causes for delays are ‘insufficient layout’ and ‘order waiting for parts’. For both causes there are a lot of underlying reasons. The category “Communication” represents the subbones ‘sold hours not communicated’, ‘bad estimation of needed hours’ and ‘variation status by entry’. For example an engine overhaul is sold for an initial price that contains the throughput time and the needed parts. The “Documentation” category describes the causes at the reporting processes. This overview indicates in which process imperfections occur which contribute to the higher throughput time of Pon Power. The different categories are further explained in Appendix B-xii.

2.1.4 Data requested Pon Power

According to multiple actors within Pon Power there is a difference in the guidelines and the actual hours that are put into the product. However the company has never registered this difference in hours for the overhauled products at the workshop. Sales data of engines show that there is a flat rate difference, which means a difference in the sold price and the actual price of overhauling an engine in 2015. However, it is unknown what the cause of this difference is, concerning the fact that the distinction between sold parts and labour is unknown. The workshop might have exceeded the sold hours, because there was more work done than previously sold or the sales employee gave the customer a discount. This is not registered in detail. The fact is that there is variation in the order, while this is not wanted in the processes.

A flow analysis gives quantitative measure of movements between departments. It is an approach to identify the type of flow patterns of material. The actual spent hours are recorded by a measurement system, wherein the mechanics write the hours on an order. For the component flow it was possible to deeper analyse this data. From January to May 2015 208 measured components have been overhauled at the workshop. Besides the components from an engine overhaul also the components from field services arrive at the component corner. The most common components during this period are shown in Figure 2-5. It can be concluded that the Aftercooler is the component that is overhauled the most.

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25 Figure 2-4 The proportion of overhauled components, total 208, in the beginning of 2015

Scope of components

The components that were not overhauled between January and May 2015 are not taken into account, such as a starter engine and shut offs. The fuel pumps and regulators are overhauled in the fuel pump corner. This is at a separate location in the workshop, where it has its own machines. There are also components that are not overhauled but immediately replaced by new ones, such as the bearing. The crankshaft component has its own nebol machine, but gets polished outside the workshop. The above mentioned components are not taken into account in this research

Data compared to Pon-Cat guidelines

From the 208 overhauled components the throughput time was registered for 155 components; for 25% of the cases the hours are unknown. In this first data analyses the written hours are compared with the guidelines. This can be found in Appendix B-xiii, and is summarized in Figure 2-6.

Figure 2-5 Registered hours of overhauled components from January to May 2015

This figure shows that 20% of the cases the hours exceed the Pon-Cat guidelines. The amount of exceeded hours in total is 38.5 hours. For 31 orders, on average 1.24 hours exceeding per component overhaul. An average overhaul takes 2,75 hours. 71% of the components are under the guidelines. Remarkable is that 2/3 of those components lie under the 50% of the target hours. This indicates that these guidelines do not correspond at all with the written hours.

This data can perhaps give an unreliable overview, since the hours are written by the mechanics themselves and they often write a couple of days later. Unfortunately the data on both flows is not profound enough to see what the distribution of spent time by the mechanics is. It is unclear why some components exceed the guidelines, while some are way quicker. It is also uncertain where potential waiting times occur. Hence, it is unknown whether the guidelines are valid and whether the throughput time can be decreased.

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Aftercooler Oil cooler Turbo Water pump Cylinder head Fuel pump & regulator Fuel cooler Piston Tumblers Spacer plates Oil pump Heat exchanger Gears

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Exceed guideline - 31 times Same as guideline - 14 times Under guideline - 110 times

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2.2 Stakeholder analysis

A stakeholder analysis is performed to indicate all the relevant actors. To identify the stakeholders the rich picture method is used [42]. This is a graphical technique used to represent a situation or a problem. It is a flexible and informational system that describes the as-is situation, see Appendix B-xiv. This figure shows which parties and processes are involved in relation with the workshop of Pon Power.

Structure Pon Power

Pon Power has 450 employees, of whom 290 are office employees and 160 are mechanics. See Appendix A-ii for the organizational structure within the management of Pon Power. Fifteen mechanics work at the workshop and the others work at the Construction-workshop or in the field. At the Construction-workshop the entry of new engines takes place. According to the customer specifications they are prepared in another big hall in Papendrecht as well. The field mechanics work worldwide to overhaul the engines in different industries. If the engine or components cannot be overhauled in the field the product is sent to the workshop. This gives the opportunity for the workshop to easily upscale and downscale by using the field service engineers, because each technician can perform each task.

Actors Pon Power

In chapter 1 and in the rich picture some actors have been presented already. An extensive actor analysis is performed, where all the parties are identified. An overview of the specific activities per role is outlined below:

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Customers: The customers are those who have their engines or components repaired at the workshop. Overhauling the products is expensive and therefore the expectations of the customers are high. Due to the diversity in engines and components the orders can vary a lot. There is also a significant difference in dirtiness of the orders. The customer is an important party for Pon Power.

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Expedition: All the parts and engines should be delivered at expedition. Expedition is in the same warehouse as logistics. However, sometimes field mechanics deliver their own component at the workshop straightaway, without communicating this to the chief workshop.

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Field service: There is a team of account managers and project managers per market segment who have the knowledge of each industry. Those teams consist of:

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Service Coordinator: The service coordinators plan the jobs and send the order to the field mechanics.

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Back-office : The back-office provides all the logistics behind the order such as ordering parts and the planning of transportation.

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District Service Manager: The district Service Manager (DSM) is responsible for a group of field mechanics (1 per region of an industry).

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Field mechanics: The field mechanics perform reparations in the field.

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Logistics: Logistics is the warehouse next to the workshop where most of the parts are stored. If the parts are not in stock they will be transported from Grimbergen in Belgium, where a large Caterpillar warehouse is located. However, within a year the logistic department will move to Almere. The back-office of the workshop, which is responsible for ordering parts, will have to take this into account and order the required parts in advance.

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Manager Service Operations: The manager service operation is responsible for the performance of the workshop. For the organizational structure within the management of Pon Power, see appendix A-ii.

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Pon Power: Pon Power is the owner of the workshop and responsible for the field operations

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Topec: Topec is the location where the engines are painted, directly across the street of Pon Power

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VPS: VPS (Verkoop Product Support) sells the services of Pon Power. The VPS is seen as an internal customer of the workshop.

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Workshop: The workshop is the main actor. In the workshop the overhauls and repairs take place. The workshop consists of a chief workshop, a back-office, a foreman workshop and about 15 mechanics. The workshop executes orders for their customers, most of the times being internal customers as VPS and Service Coordinators.

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Back-office: The back-office is responsible for ordering all the parts

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Chief: The chief workshop does the planning of the jobs and the scheduling of the mechanics

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Foreman: The foreman workshop manages the mechanics

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Mechanics: The 15 mechanics in the workshop are responsible for the overhauling of the engines and the components and for completing the orders, which also includes making the reports.

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QHSE: Quality, Health, Safety and Environment are important factors at Pon Power, the most vital one is Safety. It is tracked for how many days in a row there are no accidents. They have a special department that monitor the quality, health and safety at the workshop

Involvement of the actors in the workshop

As described before the workshop consits of a chief workshop, a back-office and a foreman workshop, manned by about 15 mechanics. An identification of all the actors who are involved in the workshop of Pon Power is presented in Figure 2-9. The workshop executes orders for their customers, most of the times these are internal sales customers, such as VPS and service coordinators. For ordering parts the logistic department is of interest. The contact with those parties is taken into account in this research, however the performance of the parties is not researched.

VPS Service coordiantor Logistics Chief workshop DSM Back-office Back-office Forman workshop 140 Field service technicians 15 Service technicians Customer

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2.3 Business process control

Every process that is related to the workshop is part of the business system of Pon Power. According to in’t Veld a business system consists of business processes, their relations and their relation with the environment. The Proper conceptual model is used to describe the business system of the workshop of Pon Power. A Proper model is an approach where processes and performance are combined [42]. It describes the general functional relationship among components of a system. This model makes a distinction in three parallel transformations, namely the transformation of orders into handled orders (perform), products into delivered products (operate) and resources into used resources (use). Figure 2-7 displays a simplified Proper model for the workshop of Pon Power.

In this initial analysis, the business processes and business process control is researched as well. There are two control dimensions; order control and overhaul control, see Figure 2-8. The representation is derived from the control framework of Schillemans [50]. The business process control gives an overview of the material, order and information flow. The order control is used for order planning, while overhaul control, or overhaul planning, is used for resource management, the guidelines and throughput times and the registered hours. The control structure shows where improvements can be made. Some of them might affect the throughput time of the products in the workshop.

Overhauling control

Perform

Operate

Use Number of engines & components Sales forecast Turnover Number of engines & components Market requirements Sales policy

Number of engines & components Sales

Engine &

component orders Handled orders

Resources Used resources

Overhauled engines Engines

Components Overhauled components Task Progress Assignment Release Order Control Overhaul Control Overhaul Transport Order Specification VPS/SC Approval Order in progress Finance Overhauled engine / component Material Order Information Buffer

Decision workorder sequence Registered hours Transport information Warehouse Bill Overhaul order

Information required material Information order Project planning Project planning Engine / component Parts, Reman, RDS Order information Improvements possible Guidelines Order information Figure 2-7 Proper model: a conceptual model of a system [42]

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29 This Proper model is evolved from a global model to a network of detailed models. This process explains the hierarchy. The possible improvements in the business system are grouped in the categories ‘operational’, ‘documentation’, ‘planning’ and ‘communication’.

The box order specification is identified as an improvement because of the unclearness of the order and fits in the category documentation. As a result, the order information to the overhaul control is not sufficient. In the current situation the order is often unclear for the mechanics due to missing information and the planned hours according to the guidelines are unknown. This came forward as a critical point in interviews.

The parts needed for an overhaul are ordered often by the mechanics; the flow information required material to the warehouse comes from the overhaul. This process can be optimized and is grouped by the category planning. The workorder sequence is linked with overhaul control. The planning of overhauling products and thereby controlling the tempo can be optimized.

To streamline the product flow, the delays in the product, the resource and information flow should be removed. As identified in the previous paragraph the delay in the overhaul process is unclear and should be researched.

2.4 Summary of the findings

At Pon Power different processes do not function as expected which forms the reason for describing the current situation. To analyze the layout in the current situation routing and travel distances are mapped. This is done according to the flow analysis and the activities analysis. The travel path, volumes and variety of products through the layout are computed. The mapped processes are a visual way to identify who performs what over time to complete a process. In this chapter the product, resources and the information flow and the stakeholders are analysed. Analysis is used to identify the problems in the current business processes.

The following sub-questions are answered. A short answer is given in this summary:

The primary processes at the workshop are the product, resources and informational processes. They can be divided into different sub processes. The processes are related to the stakeholders, who are responsible for the different steps.

The swimlane gives a clear overview of who is responsible for which process. The bottlenecks in both flows are identified. The kind of bottlenecks, such as the unclear information order, show that there is little structure in the different processes at the workshop of Pon Power. Order control and overhaul control describe how the business processes are controlled.

3. Who are the most important actors in this study and which actors are involved in the processes?

The four actors at the workshop (the chief, back-office, foreman and the mechanics) together with the customer are the most important stakeholders. The customer is the internal customer of the workshop which is the VPS and the service coordinator. The reliability and the satisfaction for the customer are essential.

4. What is the difference in worked time versus the guidelines of Pon-Cat?

The variation in overhauling an engine makes it so complex that the difference in target hours and actual hours cannot be identified from past orders. The previous paragraphs showed that the guidelines do not correspond with the written hours of components overhauled from January to May 2015. According to data of components that is acquired, for a quarter of the components it is unknown whether they have met the guidelines

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or not. Of the known times 20% of the overhauled components exceeded the Pon-Cat guidelines and 71% are under the guidelines.

The data is not insightful enough to see what the distribution of spent time by the mechanics is. It is unclear why some components exceed the guidelines, while some are a lot quicker. It is unidentified whether the guidelines are valid and whether the throughput time can be decreased. The qualitative analysis conducted in this chapter gives an insight in where possible causes of high throughput time are. However, these causes are not measured, so it is not useful enough to draw conclusions on and come up with solutions. Therefore, the performances have to be researched and a case study is the following step in the empirical research. The information presented in this chapter is used as an input for the next chapter, which describes the reframing of the research and the used methodology.

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3 Reframing research & methodology

The initial analysis showed that there are other problems occurring in the workshop, than the management of Pon Power initially thought. Therefore the research is reframed in this chapter and the redefined approach, performance measurement and the deliverables of the research are explained. The following sub-question will be answered in this chapter as well:

5. Which Key Performance Indicators (KPI) can be defined and how is the performance on these indicators?

3.1 Reframing research

The research question given by Pon Power in the beginning of the research is:

How can the workshop of Pon Power decrease its throughput time to meet the Pon-Cat guidelines, while maintaining quality and taking into account available budget, space and time?

The initial analyses concluded that a number of problems occur. First of all Pon Power assumes that they exceed the Pon-Cat guidelines, while that is unclear. In previous chapter an initial attempt is made to get insight in the throughput times. The little data available for components showed that for a quarter of the components the difference is unknown. Of the known times, only 20% of the overhauled components exceeded the Pon-Cat guidelines and 71% are under the guidelines.

Redefined objective and problem statement

The logistic performances of a company can be measured based on a lot of different criteria, such as quality, customer satisfaction and throughput time. Measurements about performances are essential to know how the system works and where it can be improved. Logistical choices need to be underpinned with facts. The logistical level is not always measured in companies, since the information systems must be able to provide the requested information [22]. Pon Power is not able to provide the information needed for this research.

The data given, presented in chapter 2, is not profound enough to see what the distribution of spend time by the mechanics is. It is unclear why some components exceed the guidelines, while some are much quicker. It is also uncertain where potential waiting times occur. Hence, it is unknown whether the guidelines are valid and whether the throughput time can be decreased. Therefore it is not possible to analyse how the throughput time can meet the Pon-Cat guidelines. Accordingly it can be concluded that the objective and problem statement have to be adjusted.

The objective of this report changes to; to provide an advice for the performance improvement of the processes at the workshop of Pon Power and to have a more efficient workshop with throughput times as good as the valid Pon-Cat guidelines.

The redefined problem addressed in this research is that the current logistic processes at the workshop of Pon Power are inconsistent, because the throughput-time of the workshop and the validity on the Pon-Cat guidelines are unknown.

Inconsistency in the problem statement indicates that variation occurs in the workshop, such as missing standard procedures for the engines and components. Additionally to the throughput-time, the validity of the Pon-Cat guidelines are unknown.

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3.1.1 Main research question

Specifications to the question of Pon Power must be made, therefore the main research question became:

What are the current throughput times of the workshop of Pon Power in relation to the Pon-Cat guidelines, are these guidelines valid and how can the throughput time be decreased, while maintaining quality and taking into account available budget, space and time?

This research question is relevant for Pon Power, because it gives more insight into the relations of the actual throughput times with the Pon-Cat guidelines. Hereby the validity of the guidelines can be identified as well. The distribution of activities in the throughput time is analysed in order to identify improvement potential. Pon Power identified the four factors quality, budget, space and time as important requirements. They are taken into account as well, they were elaborated in paragraph 1.3.1. To answer this main question additional sub-questions are formulated and a ccomprehensive research approach is described.

3.1.2 Total set of sub-questions

In order to answer the main research question, sub-questions 5-10 are added. Each chapter will end with a conclusion that describes the answer of the question.

The following sub-questions are discussed in this research:

1. What are the primary processes of the workshop of Pon Power? 2. How are the information and resource flows designed and controlled?

5. Which Key Performance Indicators (KPI’s) can be defined and how is the performance on these indicators?

6. How are the worked hours distributed over the activities and what are the causes of waiting time? 7. What are the requirements for redesigning?

8. What is the quantitative effect of the solution on the throughput time? 9. How can the product, the resource and information flows be optimized? 10. What is the most efficient workshop according to the layout?

The overview of the chapters that answers the sub-questions is given in Table 3-1. Table 3-1 Chapters and related sub-questions

Sub-question: Chapter 2 1-4 Chapter 3 5 Chapter 4 4 & 6 Chapter 6 7 Chapter 7 8-10

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3.2 Research Design and Methodology

3.2.1 Research approach

In this paragraph, it is explained which steps were taken and which methods were used to answer the main research question and sub-questions. A comprehensive research approach is given to show how the current situation can be improved. In the next paragraph the targets about the amount of improvement are given.

The graphic visualisation of the research framework is shown in Figure 3-1.

Figure 3-1 Research framework and process

Methodology – Multi-method research design

The research approach is a combination of empirical analyses and theoretical research. However empirical study is definitely the dominant approach, theoretical research substantiates the empirical results. The central approach per chapter is clarified in the outline of the research, paragraph 1.4. In chapter 2 and 4 empirical research is conducted and in chapter 3 and 5 more theoretical analysis is performed.

An initial analysis and a case study is conducted to provide answers to the empirical sub-questions. Time analysis, interviews and surveys are the main sources of empirical data. Numerous sales employees and mechanics were interviewed. All of them are somehow involved in completing an overhaul. The next paragraph elaborates over the different methods.

Approach – Inductive reasoning

This research is based on an inductive research approach. Inductive reasoning is an exploratory approach [2]. During research, observations are mapped and patterns are identified. For the case study, hypotheses are defined and examined. Based on this empirical study sub-conclusions are drawn, where after solutions are defined.

The outcomes of this study are formed on qualitative and quantitative research. Since qualitative research can provide observations [32], quantitative research is conducted as well for data. However the gathered data is limited, due to time. A set of analyses and the data are the results of part I, which is the input for the solutions and leads to proposals for further research.

Approach – Different phases

The approach for this research is divided into different phases, which are in accordance with the structure of this report:

Decreasing the throughput times of products in an engine overhaul environment-A research into the processes and guidelines of the Pon Power workshop

in an engine overhaul environment

A research into the processes and guidelines of the Pon Power workshop

Summary

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Preface

List of Abbreviations

List of Figures

List of Tables

Table of Contents

1 Introduction

1.1 Background of the study

1.1.1

A description of the company

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Problem Background

1.2 Framing the research problem

1.3 Research questions

1.3.1

Research question

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Sub-questions

1.4 Thesis outline

2 Initial system analysis of Pon Power

2.1 Current flows in the workshop

2.1.1

Material flow; product and resources

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Information flow

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2.1.3

Qualitative bottlenecks

2.1.4

Data requested Pon Power

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