Applying an analytical framework to production process improvement

Abstract

As the medium voltage switchgear industry moves from air insulated to gas insulated technology, Siemens Frankfurt factory is introducing a new gas insulated product line that will improve their relative market position. It is their intent to design a product and supporting production system that will enable substantial cost and lead time reduction over existing Siemens gas insulated switchgear products. This thesis outlines a framework for analyzing the existing production process from 'customer order to customer delivery', identifying areas of opportunity, valuing projects aimed at achieving these opportunities, and prioritizing highest value projects for implementation. To provide a rigorous analytical approach to project selection, it was important to rethink existing ways of valuing inventory holding costs, material handling costs, and lead time. By uncovering hidden costs and benefits for each, projects that otherwise seemed unattractive become important to achieving overall factory objectives. Conversely, other projects that had been historically pushed by factory leadership were shown to generate little overall return on investment.

(cont.) By using the approach outlined in this thesis, improved alignment was achieved across departments on several high value projects. This alignment positioned the factory to move forward with plans for successful implementation. It is the authors' hope that Frankfurt not only finalizes implementation of high value projects identified during this analysis, but also use the framework provided for future analysis and continued improvement.