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OPSsixsigmayellowbeltweek3.pptxSix sigma yellow belt
Tyzenia Renee Williams, Tonya wright, Terrence willburn, Melissa Hoolulu, John banzali, ben
Ops 571
Professor soltys
March 19, 2018
1
Customers and Their Priorities
CUSTOMERS
Businesspeople
Travelers
Younger generation
PRIORITIES
Affordability
Incentives
Consideration
Many people choose Tesla for various reasons. Business people require the most luxury form of transportation and want to be seen getting out of a beautiful car as they pull up to work or family excursions. Each buyer has a different reason for purchasing the Tesla and each reason has a corresponding priority. Business people may prefer the convenience option that accompanies the car. Tesla’s are full of provisions for satisfying customer needs, like its electrical feature and environmental safeties. The Tesla are made to order by their customers with the options that they choose, certain items differ, but the convenience of service is available. Offering Wi-Fi is a reasonable perk for keeping customers connected with technology. All customers have similar opportunities and customers have several options. Tesla is certainly a competitor that strives to provide the appropriate, and necessary, amenities for their loyal customers. Customers prefer options, ease of travel, and particular amenities to get the most out of this beautiful car. In addition, employee and customer incentive programs are often a consideration for loyal customers. Incentives allow the customer affordability and economical provisions along with particular in Tesla perks. Other considerations, like safety and the green initiative exhibit the pensiveness of the company encourages customers to order their vehicles months ahead of time when they trade it in trade it back to the Tesla company.
2
Business objectives
To sell as many high quality units as possible
Maintain high customer satisfaction
Maintain a credible reputation
Six Sigma is a business improvement program that was designed originally for manufacturing companies However, its efficiency in furthering business objectives has made its way to a wide variety of project management, sales and marketing, and other organizations in need of an increase in quality and efficiency by identifying defects in the system and correcting it (Madhani, 2017). High end car brands such as Tesla have used Six Sigma to ensure quality in its products. Like any business, the objective is to sell as many high quality units as possible while maintaining high customer satisfaction, hence, a very credible reputation in the automotive industry.
Tesla manufacturers use this program to produce high quality cars that meet the high expectations of its clients. Ensuring that what they purchase with the very expensive car is worth every cent, Six Sigma professionals check every detail in the process of creating a masterpiece of a car.
3
Customer needs
Timely production
Detail precision with specifications
Inventory management
From the time a model is created, Six Sigma can check out if specifications are meticulously met. This is to prevent recalls once sales are made. Waste is also prevented so that process flow is uninterrupted and stagnation is avoided. Examples of wastes that Six Sigma checks are as follows: “Defects, Overproduction, Waiting, Non-Utilized Talent, Transportation, Inventory, Motion, and Extra-Processing” (O’Rourke, 2018, para.1). With this list, Tesla vehicles are checked in both the process as well as the product, and all forms of waste are identified and eliminated so that the whole process of Tesla car manufacturing becomes more efficient, cost-effective, and achieves customer satisfaction.
For example, prolonged waiting time for supplies or delivery time will cost much money, as customers may change their minds due to loss of patience for the long wait in service or the delivery of their purchased car. As a result, they may cancel their order, thus, losing profit for the company. The waiting and delay may be caused by very slow motion of workers. Hence, Six Sigma can recommend the appropriate employee training or impose policies on effective time management.
Another example is the quality of inventory management kept by the company. If more inventory is kept than what is required, it may not only take up valuable space in the storage area but can keep resources ineffectively stuck disabling it from becoming liquid. On the other hand, lack of inventory can also result in delays, because supplies need to be ordered prolonging the manufacturing process. Six Sigma standards are very helpful in maintaining high quality in businesses as it achieves organizational goals and meet customer expectations.
4
Productivity of Operation / Quality of Service
Productivity of Operations
Errors in Production of Tesla Vehicles
Quality of Products
Tesla Vehicle Quality
Customer Satisfaction
Overall Customer Satisfcation
No other vehicle manufacturer is hotter than Tesla. From it’s immensely popular vehicles such as Tesla’s Model S sedans, to there Model x SUV’s they are definitely becoming one of the more popular car manufacturers not only in the United States but in the world. It seems that Tesla has definitely have things figured out. Unfortunately, like many organizations there are and will always be areas that can be improved.
One area that the organization has not mastered are the issues that they have when it comes to their production line. One of the more known issues that the organization has is that many of their vehicles (mostly electric), end up needing immediate repairs. “The luxury cars regularly require fixes before they ca leave the factory, according to the workers. Quality checks have routinely revealed defects in more than 90 percent of Model S and Model X vehicles inspected after assembly” (Six Sigma, 2017 ). This is where Six Sigma can definitely make a huge difference as it will put more emphasis in eliminating waste and correcting the organizations processes in order to decrease errors in their production. Six Sigma can also help in making sure that the quality of Tesla vehicles are optimized creating a chain of events that make the buyers much happier customers.
Customer satisfaction is everything in the motor vehicle business. Tesla with its innovations and ground breaking vehicles have got the populations attention making them one of the more popular and sought after vehicles in the land. However, if these common issues in vehicle production continue to rise, the less reliable they will become. With other larger motor vehicle organizations cleaning up and focusing more on quality, The six sigma processes can help clean up waste, issues, and continue to boost customer satisfaction by making the very best and innovative motor vehicles in the land.
5
Problems looming for Tesla
Resolving the concerns of safety
Production with the new batterires shortage has to be addressed
This Photo by Unknown Author is licensed under CC BY-NC-SA
Tesla has position itself as one of the top luxury vehicles in the market. There still remains to be unmet needs of the targeted audience. Tesla has to address the recall issues that stated that auto pilot is unsafe and parking brake problems. Bridging the gap to high performance luxury car, yet the reliability issue aren’t match the performance. As orders continue to sore for the new affordable models of the Tesla the burning question still exist that the makers can’t keep up with orders and safety concerns have to be addressed at a more timely manner. As the new model start to hit the market, a new problem has arouse of will Tesla be able to produce the battery that is capable of giving the car the increased drive time.
6
Critical to quality characteristics
The customer satisfaction for Tesla is important to the sustainability of the high quality cars and production. The customers satisfaction revolves around three main quality characteristics of time, inventory, and customization. These three elements are essential performance and satisfaction characteristics. The shorter the time is to receiving the car the higher the satisfier. The more inventory the company has in stock, the more likely they are to meet the customers needs for preference. Further, the ability for the customization are also high satisfiers.
“CTQs are the key measurable characteristics of a product or process whose performance standards or specification limits must be met in order to satisfy the customer. These outputs represent the product or service characteristics defined by the customer (internal or external). They may include the upper and lower specification limits or any other factors related to the product or service. Typically, a CTQ must be interpreted from a qualitative customer statement to an actionable, quantitative business specification. Establishing CTQs is vital for a company to meet customer needs and keep up with the competition” (Stroud, n.d).
7
Time
Inventory
Detail precision for customization
Manufacturing metrics that Matter in the Auto industry
Business executives
apply metrics
in the right context
and in innovative
ways to solve production
Flow problems, and meet
their customer demands.
Source : Tesla
In the manufacturing industry, manufacturing executives use available manufacturing metrics to figure out what business issues need to be addressed. Manufacturing executives use financial and non-financial measures, (KPIs) to help make decisions to pinpoint the strengths and weaknesses of their business and show whether they are in line with their strategic objectives (Hennel, 2014). The MESA organization (Manufacturing Enterprise Solutions Association) sponsor research each year to identify the most important manufacturing metrics to improve the production flow and to align the metrics with core processes and its critical-to-quality (CTQ) characteristics. According to the Hennel, (2014), “ the results of the research identified the following manufacturing metrics that are vital to the automobile industry and other manufacturing companies:
Customer Experience & Responsiveness Manufacturing Metrics
Quality Manufacturing Metrics which include
Efficiency Manufacturing Metrics
Inventory Metrics
5. Maintenance Manufacturing Metrics
6. Flexibility & Innovation
7. Costs & Profitability Manufacturing Metrics
Customer Fill Rate/On-Time delivery/Perfect Order Percentage – The percentage of times that customers receive the
entirety of their ordered manufactured goods, to the correct specifications, and delivered at the expected time”.
8
Tesla model 3 production problems
Inexperience
Workers
2. Manual
Assembly
of the
Lithium
batteries
Source : Tesla
The Tesla Model 3 was the most anticipated car in the history of the auto industry after it was revealed in March 2016. The Model 3 launched in July 2017, but the company did not meet the production quota. The Tesla's Gigafactory in Nevada has had issues with the battery supply chain. The subcontractor did not meet their part of the manufacturing contract causing Tesla to have to redo many of the mechanical and electrical elements of the battery production quota. Tesla had a large number of pre-orders, and did not anticipate having battery challenges. Tesla needs battery packs to build 500,000 Model 3s, but the company can honestly produce 20,000 units. According to (DeBord, 2017) , the Tesla employees states there will be more delays because of inexperienced workers, and the required manual assembly of the batteries.
9
Metrics used to measure production problems
Customer Experience &
Responsiveness
Manufacturing
2. Quality Manufacturing
Metrics
3. Inventory Metrics
4. Customer Fill Rate/ On
Time Delivery
According to the, (Hennel, 2014), “ the results of the research identified the following manufacturing metrics that are vital to the automobile industry and other manufacturing companies:
Customer Experience & Responsiveness Manufacturing Metrics
On-Time Delivery
Manufacturing Cycle Time
The Time to Make Changeovers
Quality Manufacturing Metrics
Yield - The percentage of products that are manufactured correctly and to specifications the first.
Customer Rejects/Return Material Authorizations/Returns
Supplier’s Quality Incoming – The percentage of good quality materials coming into the manufacturing process from a given supplier.
Inventory Metrics
WIP Inventory/Turns – Measures the efficient use of inventory materials that are used to produce goods.
4. Customer Fill Rate/On-Time delivery/Perfect Order Percentage – The percentage of times that customers receive the
entirety of their ordered manufactured goods, to the correct specifications, and delivered at the expected time”.
10
Tesla bottleneck in their battery production
A shortage of graphite,
The raw material needed
to make the lithium
Batteries.
Source: Ron Struthers
Battery metals are in short supply as companies race to build EVs and energy storage system, says Ron Struthers of Struthers Resource Stock Report. According to Struthers 92017), “the Tesla Gigafactory expansion needs 45,000 tons per year of additional mined graphite to meet the customer per ordered cars. To produce battery grade graphite (anode material) over 50% of the mined graphite is lost in the process. Two graphite companies in Canada have received environmental permits, but even if financing and construction was started today, it would still take two to three years to see production.
11
Internal process ctq
Detail measurements
Audio
Speed
Design
The internal process CTQ’s are related to design and manufacturing a high quality vehicle. The detailed measurements are quantifiable to creating a pristine car. The quality of the audio, the speed at which the vehicle accelerates and the overall design are internal measurements of CTQs.
Defects are measured and tracked to the process. The internal CTQs are a measurement that is quantifiable and aids in review of any delays or deficiencies that may impact internal quality and also customer satisfaction. If a door does not have a soft closure, the detail measurements are reviewed for quality. The same would be true for audio, speed, and design. The CTQs are important to internal quality and important to customer quality.
12
References
DeBord, M. (2017). Why Tesla's Model 3 production problems are troubling. Retrieved from https://www.cnbc.com/2018/01/25/tesla- employees-say-gigafactory-problems-worse-than- known.html
Hennel, P. (2014). Manufacturing metrics that matter most: A comprehensive checklist. Retrieved from http://cerasis.com/2014/07/16/manufacturing-metrics/
Madhani, P.M. (2017). Six sigma deployment in sales and marketing: Enhancing competitive advantages. The IUP Journal of Business Strategy, 14 (2): 40-63.
O’Rourke, T. (2018). 8 Wastes, Retrieved from: https://goleansixsigma.com/8-wastes-muda/
Reuters (2017). Tesla assembly lines are getting bogged down with mistakes. Retrieved from nypost.com/2017/11/29/tesla-assembly-l ines-are-getting-bogged-down-with-mistakes/
Stroud, D. (n.d). Defining ctq outputs: a key step in the design process. Retrieved from https://www.isixsigma.com/methodology/voc- customer-focus/defining-ctq-outputs-key-step-design- process/
Struthers, R. (2017). Battery production more than a Tesla nightmare . Retrieved from https://www.streetwisereports.com/article/2017/11/28/battery-production-more-than-a-tesla-nightmare.html
6sigma.us. (2017). Six Sigma Case Study: Ford Motors. Retrieved from. www.6sigma.us/uncategorized/six-sigma- case-study-ford- motors/
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