Mitigating the risk of a new workforce by reducing rework and rightsizing on hand inventory

• Main Author: Larson, David (David William)
• Other Authors: Deborah Nightingale and Stephen C. Graves.
• Format: Others
• Language: English
• Published: Massachusetts Institute of Technology 2009
• Subjects: Sloan School of Management.; Engineering Systems Division.; Leaders for Manufacturing Program.
• Online Access: http://hdl.handle.net/1721.1/49777

Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Engineering Systems Division; in conjunction with the Leaders for Manufacturing Program at MIT, 2009. === Includes bibliographical references (p. 56). === Dramatically increasing the hourly workforce at a rapid pace to support accelerated product demand in an aircraft manufacturing facility in a short amount of time resulted in: (1) increased rework, and (2) increased part damage during assembly. The majority of rework results from simple workmanship mistakes from the new workforce. The approach used in this thesis to combat the increase in rework involves the design and implementation of a feedback loop on the shop floor of a leading aircraft manufacturer. The loop consists of providing each worker with a list of their discrepant work from the day before and the opportunity for them to perform their own rework. The thesis shows that the percent of discrepancies reworked by the original mechanic increases from 27% to 41%. Paired data is analyzed to show (on average) a 20% decrease in rework when the feedback loop is utilized. Included is qualitative advice on implementing change on the shop floor. During final testing, damaged parts (typically as a result of out of sequence work or workmanship mistakes) are discovered and require immediate replacement. Frequently, there are no replacement parts available at the test site, since the original part was installed by a subcontractor. To meet the immediate replacement need, test personnel remove an already installed part from an aircraft upstream in final assembly at the same location. The thesis includes a case study to demonstrate a binomial demand model to estimate the amount of on hand safety stock required to prevent the unnecessary labor from the redundant part removal and replacement from upstream aircraft. === (cont.) The case study estimates demand based on the probability of finding a damaged part, the takt time of the particular model, the leadtime and delivery quantity of replacement parts. A cost tradeoff is calculated to justify the additional capital investment in inventory. The thesis closes with a leadership case study on whom and how to hand off a shop floor Tip of the Day system for the new workforce to ensure its continued success. === by David Larson. === S.M. === M.B.A.