Toy s R US research paper - Deadline is Sunday 6pm PST

· Company Overview

Toys R Us is the world's leading baby product and toys retailer. Toys R Us/ Babies R US has 866 stores in the United States, Puerto Rico, and Guam. There are additionally over 750 stores worldwide. Toys R US averages 66, 000 employees around the globe every year. Their headquarters are located in Wayne, New Jersey.

Within, Toys R US, there is the Babies R US and Kids R Us brand. Babies R Us is a specialty baby products retailer catering to infants and toddlers and young children.

The toys r us distribution center is responsible for all freight coming inbound throughout the world. Products are received, broken down and sent out to various stores. “Dot Com” is a department which delivers directly to a customer’s home. The Dot COM department has their own inventory separate from the rest of the distribution center. Customers order place their orders on line and the DOT COM department receives those orders and delivers them. It is a very fast paced environment. Deliveries come in every day during this 24 hour operation.

Project Overview

The primary goal of the Distribution Center is to receive products and send the out as soon as possible. This semester’s project is to reduce the “No-Read” which refers to labels on the boxes. The boxes with shaded labels are ready to go out and be shipped while the boxes with non-shaded labels are not projected to go out any time soon. The employees of the Distribution Center use scanners which read the “skin” (label/barcode) so the systems knows what each box’s respective destination is. This completely automated system allows the staff to easily and efficiently sort the boxes. Unfortunately, 5% of all shipped boxes get shipped back to the Distribution Center because of the “No-Read” issue. The labels sometimes get destroyed or they fall off during transportation and handling. Moreover, the labels even get cut off and scratched and thus become unreadable. If the labels fall off or become unreadable, the workers do not have a way of knowing where these boxes are supposed to be shipped so they sent them back to the Distribution Center. The issue can also occur if the label is not on the surface facing the scanner so the system cannot read it and the box then has to send to the “No-Read” section. This issue causes a tremendous inconvenience to the company as these boxes now have to be reevaluated, processed, and shipped all over again. The process of resending the same boxes all over again is a 100% waste of time and money and generates no values added to the products.

· Lean Training

A process is a systematic series of actions directed to some end.

Y=X(F)

Business is about taking inputs (x) and converting them into outputs (y) that customers will see value in.

There are two types of activity in the processes. Non-value added activity is a waste that adds cost without providing value. Value added processes satisfies the needs of one of many customers or stakeholders, not just the final consumer.

Plan-Do-Check-Adjust is a four step problem solving model that enables the company to perceive the problem as an opportunity to improve and use available tools to find and eliminate the root cause of the problem. Toys R US uses ORLOE problem solving model that helps dig down to the root of the problem, reduce or eradicate the root cause, and then place controls to assure the process is improved and can be sustained.

1. Operate: Do the work and identify the problem.

Tools: Voice of Customer, CTQ Checklist, Team Member Standard Work, Visual Management, Run Charts, Scoreboards, Leader Standard Work

2. Review: Define the problem and document the current state.

Tools: Go See Management, A3O (A3 ORLOE Problem Solving Model ), Process Map, Swim Lane Map, Current State Value Stream Map.

3. Learn: Determine the root cause.

Tools: Pareto – Critical Few, Brainstorming, Cause & Effect, 5 Why Analysis.

4. Optimize: Identify solutions.

Tools: Future State Improvement Tools, Velocity – One Piece Flow, Pull Systems , Future State Maps & Gap Analysis, XY Matrix for Prioritization, 5S, Leveled Flow

5. Execute: Implement and sustain the solutions.

Tools: Implementation Plan, Timeline, FMEA, Dashboards, Communication Plan, Review Process.

1. ORLOE Operate Phase

· Capturing the Voice of the Customer includes interviews, asking direct questions furing sales calls, questionnaires/surveys, customer observations, Kaizen Events or Focus Groups, historical data, etc

· Standard Work enables engagement of employees in the developing process. It must be realistic for current state of process and and ensure productivity while allowing basic stability

· Visual Management is important because it motivates employees into action. Visual Workplace enforces Genchi Genbutsu (“actual place, actual thing”) which means that in order to truly understand a situation one needs to go to genba ( “'real place”) where work is done.

· A3 Scoping

· Critical to Quality Checklist (CQC) is an idea that not all process steps are created equal and some steps are much more important

2. ORLOE Review Phase

· “Go See” Gemba Walk enables the manager to engage with people doing the work in order to understand the problem from their point of view

· Process Map provides an overview of the process, facilitates process changes, aids in troubleshooting, and also improves team communications

· Data Collection is important as too many data can waste time and resources during data collection while too few data can influence poor decision making.

· Swim Lane Map separates the process steps into each role/person involved and helps identify where there are too many process hand-offs, non-value added, or repetitive tasks

· Current State Value Stream Map is a representation of the flow of materials from supplier to customer as well as the flow of information. This enables realization of where the delays are in your process, any restraints and excessive inventory.

ORLOE Learn Phase

· Pareto Analysis is a bar graph tool for identifying the more significant in order to assign priority action. 20/80 rules states that 20% of defects are creating 80% of the problems in the process.

· Fishbone Diagram identifies all possible causes of problems. The variables are: material, machine, man/woman, method, mother nature, and measurements.

· 5 Why Analysis peels away the layers of symptoms which can lead to the root cause of a problem.

ORLOE Optimize Phase

· Error Proofing

Prevents Defects (Poka Yoke) - if a mistake is made the process can’t go any further

Warning of Defects (Andon) - if a mistake is made, the operator will be notified to act

· Replenishment Strategies

· Pull Systems link replenishment to demand or consumption

· XY Matrix for Prioritizing Improvement includes brainstorming the critical variables and weighing them on a scale of 100%, listing all possible solutions, rating each item on a scale 1-3-5, and sorting the items by the total score, the highest being the first priority.

ORLOE Execute Phase

· Standard vs. Non-Standard Time

Standard work defines the most efficient way to produce a product at a balanced flow to achieve a desired output rate. It is one of the most powerful lean tools that breaks down work into sequenced elements which are repeatedly followed. It also provides a pattern for how a process should consistently be executed and highlights current best practices. This provides a base from which an improved process can be developed, allowing continuous improvement methods to leverage learning. Work measurement is a process of analyzing jobs for the purpose of setting time standards. It is used to schedule work and allocate capacity, motivate and measure work performance, evaluate performance, and provide benchmarks.

Normal time (NT) =Observed performance time per unit x (Performance rating)

The Performance Rating is usually expressed in decimal form in these formulas. So a person working 10% faster than normal would have a Performance Rating of 1.10 or 110% of normal time, working 10% slower, 0.90 or 90% of normal.

Standard time = Normal time/ (1-Allowances)

The Time Study is a technique for calculating the standard time to perform a single element or an operation of elements. This technique has been traditionally used by Industrial Engineers to set standards. Each element combines a number of motions that can be timed. The times measured for those motions serve as a basis for developing standard time.

Establishing standardized work depends on collecting and recording data on various forms. These forms are used by engineers and front-line managers to design the process and by machine operators to make improvements in their jobs. The benefits of standardized work entail documentation of the current process for all shifts, reductions in variability, easier training of new operators, reductions in injuries, and a baseline for improvement activities. Moreover, standardized work supports audits, promotes problem solving, and involves team members in developing poka-yokes.

Toys R Us have been doing time studies for years and determined standard time for most activities. The accepted standard average time of an activity is calculated by adding 10% to the average time it takes to perform it. This 10% that is added for each activity/task accounts for all the unexpected circumstances such as personal fatigue, lateness, delays, etc. The eight categories for which delays have been tracked are: Meeting/Start up, Equipment/RF Failure, Housekeeping, Revisits, Special Projects, Battery Change, Training, and Other. The variance of budgeted hours comparing to the actual hours predetermined for these activities is huge and is dominant in Housekeeping.

The company follows “Clean as you go” principle which means that when cartons slip of the trays or similar accidents occur, they are to be fixed right away. These accidents and all other unexpected circumstances are considered to be Non-Standard time as they cannot be measured since they are unpredictable. However, Non- Standard time should only account for 5% of total time. By looking at the numbers above, one can clearly see the variance to budgeted hours proving Non-Standard time exceeds 5% by far.

The front-line workers sign in at beginning of their shift and sign out in the end. They do not have touch bases with their manager and do not use any timesheets do document their work. The General Manager coordinates managers in four different buildings and is the first person to contact when issues arise. In order to get to the root cause of this issue, the management has to educate the operators about Non-Standard time and clarify how it can be used. The management also has to address critical patterns of behavior and so communication between the team members and the manager is an integral part of solving the problem as it facilitates maintaining control of the system. There is no punishment approach for groups that abuse Non-Standard since it is assumed they are not properly trained. However, meeting budgeted hours target does not grant rewards for individual performance either.

Organizational entropy suggests that unless positive pressure it applied onto the system, it will shift to pre-existing process conditions. Entropy is a force that enables change management programs to sustain improvements. The laws of entropy apply to lean manufacturing because without energy, commitment, and resources, the system can regress to a lower-energy state. Toys R Us will employ this principle in order to figure out how to reduce Non-Standard Time and hence, optimize productivity. The key is to keep the lean culture moving so submitting an idea that proposes change is not enough. One has to work to help implement the idea and establish controls that will enable maintenance of the improvements made while assuring the system will not regress to the previous state. Keeping employees reminded with updates regarding desired performance and budgeted hours targets allows them to stay on track with their schedules.