Measure

Lean Six Sigma Service 60 Refuse Removal

Costs

BB Candidate Sean Lambur

Project Initiation Date: 06/05/2008

Measure Tollgate Date: 09/02/2008

Measure

2

Project Charter Svc 60. Refuse Removal

Problem: IMCOM Europe’s expenditures for Svc 60

(>$27M FY07 for IMCOM Europe, $1.3M for USAG

Baumholder) make it one of the 10 most expensive CLS

services.

Scope: The process of refuse collection & disposal within

USAG Baumholder

Goal: A reduction in costs of at least 10%

Problem/Goal Statement

Tollgate Review Schedule

Business Impact

Core Team

Financial Impact

Cost of LSS Project: 20% time of BB

Investments: None

Revenues None

Reduction in USAG Baumholder costs will make more

dollars available to the Direct-Reporting Garrison

Wiesbaden for distribution for renovation & maintenance

Sponsor: Mr. Holt USAG Wiesbaden DPW

DD: Mr. Fred Wegley, USAG Baumholder DGC

GB/BB: Mr. Sean Lambur, USAG Baumholder

MBB: Mr. David Wright, IMCOM Europe MBB

Core Team Role % Contrib. Pos.

Jutta Spohn DRM 10 RM Specialist

Margit Simon DRM 5 RM Specialist

Harald Weber DPW 10 Cost Analysis

Robert Martin DFMWR 5 Metal Processor

Heinz Baumann DPW 5 Green Refuse Spec

Georg Natter DPW 5 Food Refuse Spec

Clemens Bambach DPW 60 Refuse Specialist

Tollgate Scheduled Revised Complete

Define: 15 Mar 08 30 Jun 08 5 Sep 08

Measure: 15 May 08 31 Jul 08 09/15/08

Analyze: 15 Jun 08 29 Aug 08

Improve: 1 Oct 08 30 Sep 08

Control: FY09 31 Oct 08

Measure

Key Input, Process, and Output Metrics Service 60 Refuse Removal

Suppliers Inputs Process Outputs Customers

• Removed Trash

• Lower Cost Refuse

• Dumpster (Residual) Refuse

• Bulk Refuse

• Recyclable Refuse (Paper, Metal)

• Housing Residents

• Office Workers

• Soldier Work Areas

• Retailers

• Garrison Resource Management

• Garrison Morale, Welfare & Recreation

Prep

Trash

Vehicles

Drive to Trash Bins

Empty

Trash

Bins

Repeat

Drive to Trash

Contractor

Wait in

Queue Weigh

Empty Truck

Input Metrics Process Metrics Output Metrics

Quality

Speed

Cost

• Tons of Trash

• Cost of Trash

VOC/VOB

Return

Receive

Weight

Slip

Weigh Truck

Receive

Billing

• Variability of trash amounts

Y = f(x) or Cost of trash

= f(amount of trash)

• Amounts of each type of trash

• Types of Trash/Cost per type

• Trash per day

Outside of Scope Outside of Scope Outside of Scope

Measure

Performance

Measure

Operational

Definition

Data Source

and Location

How Will Data Be

Collected

Who Will

Collect Data

When Will

Data Be

Collected

Sample Size Stratificat

ion

Factors

How will data be

used?

Monthly Weight of residual refuse

Refuse is measured by the metric ton (1000 kg)

Refuse contractor history logs

BB will collect history of contractor weight receipts from Garrison Refuse Team

BB Jan 2007 – Apr 2008

100% data capture (16 months of receipts)

Type of Refuse

To create the baseline

Cost of refuse

Weight of delivered household trash

Weight Tickets At weight scale BB Jan 2007 – Apr 2008

100% data capture (16 months of costs)

Type of refuse

To create the baseline

Daily Weight of Residual Refuse

Refuse is measured by the metric ton (1000 kg)

Refuse contractor history logs

BB will collect history of contractor weight receipts from Garrison Refuse Team

BB Jan 2007 – Apr 2008

100% data capture (680+ Receipts)

Day of Collection

Analysis of refuse collection

Data Collection Plan – Svc 60 Refuse Removal

Measure

Value Stream Map Svc 60 Refuse Removal

Trash Team Supervisor

Empty Bin

P/T = 5 Min

Error Rate=0%

5 min

Load, empty &

unload bin 4

1 min

SUPPLIER/ Trash Receiver

Empty Bin

P/T = 5 Min

Error Rate=0%

Load, empty &

unload bin 4

Empty Bin

P/T = 5 Min

Error Rate=0%

Load, empty &

unload bin 4

Empty Bin

P/T = 5 Min

Error Rate=0%

Load, empty &

unload bin 4

Queue for Weight Scales

5 min 1 min 5 min 1 min 5 min

15 min 15 min

Prep

Get vehicle

Prep Vehicle

Drive to trash bin

4

CUSTOMER

NOTE: VSA shows times of the residual refuse collection process but this

project will focus on the costs of the residual refuse. Costs inherent in the

collection process (vehicle fuel, labor, etc.) are negligible in comparison.

Measure

Consequence

Lik

eli

ho

od

1

2

3

4

5

1 2 3 4 5

Risk Analysis and Mitigation-Svc 60 Refuse Removal

Risk points are: Large Scope (variety of processes), Process Mapping, Processes are heavily behavior-dependent, Accurate identification of current costs, Process prejudice

•Identification of current costs •Risk: Costs easily identified through Trash Team records •Mitigation: None •Consequence: None

• Process Prejudice • Risk: “There’s nothing to be done”

attitude • Mitigation: Show quick, small

improvements & focus on positive team members

• Consequence: May have to delay MEASURE Tollgate

•Process Mapping •Risk: Many processes to map •Mitigation Plan: Map at the macro level •Consequence: 1-2 week slide in schedule

•Large Scope •Risk: Costs of Svc 60 stem from many processes and many customers •Mitigation Plan: Scope out low-impact & low cost processes •Consequence: Project delay

• Behavior-dependent processes • Risk: Improvement to processes may

heavily depend upon changing long-learned customer behavior

• Mitigation: TBD • Consequence: Most cost-effective process

improvements may not be practical to implement

Measure

Reducing List of Root Causes: Pareto Analysis 3

Count 6972 583 440 383

Percent 83.2 7.0 5.2 4.6

Cum % 83.2 90.2 95.4 100.0

$$

Co

sts

Pe

rce

nt

Trash Type

Othe

r

Woo

d, categ

ories A1

, A2 an

d A3

Pape

r and

car

dboa

rd m

ixed

Resid

ual w

aste /

Restmue

ll

9000

8000

7000

6000

5000

4000

3000

2000

1000

0

100

80

60

40

20

0

FY07-08 Refuse Types by Weight

Residual

refuse weight

is >80% of all

refuse weight

Measure

Count 1359489 45768 35733

Percent 94.3 3.2 2.5

Cum % 94.3 97.5 100.0

$$

Co

sts

Pe

rce

nt

Trash Type

Other

Bulky tra

sh (Woo

d, fu

rnitu

re, e

tc.)

Residu

al w

aste / Res

tmue

ll

1600000

1400000

1200000

1000000

800000

600000

400000

200000

0

100

80

60

40

20

0

FY07-08 Refuse Types by Cost

Reducing List of Root Causes: Pareto Analysis 4

Residual

refuse costs

are nearly

95% of all

refuse costs

Measure

Baseline Data Svc 60 Refuse Removal – Monthly Residual Trash Costs

Sample size is a set of 16

monthly measurements

The current process has a

normal distribution with the

P-Value > 0.05 and has a

normal bell-shape.

The range is € 55,528 and

the standard deviation is

€14,909

The average monthly cost for Residual Refuse is € 84,968. This

exceeds our monthly average maximum cost target of € 76,471

(10-50% cost reduction is target).

12000011000010000090000800007000060000

Median

Mean

9500090000850008000075000

1st Q uartile 75534

Median 81381

3rd Q uartile 97317

Maximum 117739

77023 92913

76564 94777

11014 23075

A -Squared 0.26

P-V alue 0.678

Mean 84968

StDev 14909

V ariance 222290465

Skewness 0.566400

Kurtosis -0.033958

N 16

Minimum 62211

A nderson-Darling Normality Test

95% C onfidence Interv al for Mean

95% C onfidence Interv al for Median

95% C onfidence Interv al for StDev

95% Confidence Intervals

Summary for Residual waste / Restmuell

Measure

10

Process Performance and Capability: Monthly

Baseline Data Residual Trash Costs

16 Observation points

The Range has one

point more that 3

standard deviations from

the center line – Range

is not in Control

Out-of-control Range

nullifies the information

of the Individual Values.

Observation

In

div

idu

al

Va

lue

15131197531

125000

100000

75000

50000

_X=84968

UC L=115553

LC L=54384

Observation

Mo

vin

g R

an

ge

15131197531

40000

30000

20000

10000

0

__MR=11500

UC L=37573

LC L=0

1

1

I-MR Chart of Residual waste / Restmuell

Root causes for the out-

of-control range will be

examined in Analyze

Measure

16 Data points collected from Jan 07 through Apr 08

Mean € 84,968, St. Dev. € 10,194. Cp is 0.83 indicating that the total variation of the process is too great to fit within the LSL of € 25,490 (70% cost savings) and USL of € 76,471 (10% cost savings). Cpk (amount off target) is -0. 28 indicating that the center is outside the spec limits.

With an overall PPM of 712,474 defects per million opportunity, the current process has a Sigma Quality Level of .67 or a 28.7% yield

Process Performance and Capability: Monthly Residual Trash Costs

120000100000800006000040000

LSL USL

LSL 25490

Target *

USL 76471

Sample Mean 84968.1

Sample N 16

StDev (Within) 10194.9

StDev (O v erall) 15159.8

Process Data

C p 0.83

C PL 1.94

C PU -0.28

C pk -0.28

Pp 0.56

PPL 1.31

PPU -0.19

Ppk -0.19

C pm *

O v erall C apability

Potential (Within) C apability

PPM < LSL 0.00

PPM > USL 750000.00

PPM Total 750000.00

O bserv ed Performance

PPM < LSL 0.00

PPM > USL 797709.39

PPM Total 797709.40

Exp. Within Performance

PPM < LSL 43.65

PPM > USL 712431.15

PPM Total 712474.80

Exp. O v erall Performance

Within

Overall

Process Capability of Residual waste / Restmuell

Measure

Recommended Quick Wins and RIEs

Quick Wins to be Implemented

Bust tires off of rims to reduce weight of tires and gain funds from sale of metal. A reduction of 60% of 07/08 tire weight would have saved almost $2K

Take over cardboard disposal from Baumholder DECA commissary to earn DFMWR funds (currently disposed of at no cost). Potential of $60K in DFMWR earnings

Change DFMWR Metal Contract to enact quality controls over the amounts of scrap metal collected (currently no controls over contractor’s collection or weighing). Revenue FY07 without controls was $15K. At estimation of 50% loss and including the higher price of metal there is potential to double this revenue in FY08/09

Measure

13

Measure Phase Summary Svc 60 Refuse Removal

Baseline Data

Tools Used

Process Capability

Recommended Quick Wins/RIEs

Root cause: Cost of Tires

Quick Win: Break tires off of heavy rims

Root cause: Lack of Reimbursable funds from Paper

Quick Win: Sell DECA Commisary Cardboard

Root cause: Loss of Reimbursable Funds from Scrap metal

Quick Win: Renegotiate contract for scrap metal collector to implement Controls

Detailed process mapping

Measurement Systems Analysis

Value Stream Mapping

Data Collection Planning

Basic Statistics

Process Capability

Histograms

Pareto Analysis

Control Charts

120000100000800006000040000

LSL USL

LSL 25490

Target *

USL 76471

Sample Mean 84968.1

Sample N 16

StDev (Within) 10194.9

StDev (O v erall) 15159.8

Process Data

C p 0.83

C PL 1.94

C PU -0.28

C pk -0.28

Pp 0.56

PPL 1.31

PPU -0.19

Ppk -0.19

C pm *

O v erall C apability

Potential (Within) C apability

PPM < LSL 0.00

PPM > USL 750000.00

PPM Total 750000.00

O bserv ed Performance

PPM < LSL 0.00

PPM > USL 797709.39

PPM Total 797709.40

Exp. Within Performance

PPM < LSL 43.65

PPM > USL 712431.15

PPM Total 712474.80

Exp. O v erall Performance

Within

Overall

Process Capability of Residual waste / Restmuell

Measure

Input-Process-Output Measures

Measure Storyboard Svc 60 Refuse Disposal

Define

BUS CASE: Be #2 Fin Service Provider

GOAL: Reduce Refuse disposal costs by at least 10% of FY07 cost of 1,476,831.00 €

FIN IMPACT: €147,000 per year

Project Charter

Process Flow Value Stream Map

MSA Data Collection Plan

Baseline Control Charts Process Capability

Sigma Performance Level of only .94!

Measure

Sign Off

• I concur that the Measure Phase was successfully completed on 09/15/08.

• I concur the project is ready to proceed to next phase: Analyze.

Ursula Griffin Resource Manager/Finance

Fred L. Wegley Deployment Director (if different from Sponsor)

Sean Lambur Green Belt/Black Belt

David Wright Master Black Belt

Jerry Walters, DPW Sponsor / Process Owner