12 Aug Chemicals: Customer Defections and Cost
Client:
A billion-dollar industrial company was having high rates of failure in one of its batch chemical processes. The failures were causing significant financial costs, but more importantly, customer orders were being missed. A significant number of customers had already given their business to competitors and defections were anticipated to increase.
Goal:
eMRI recommended an eMRI-led team taking a Lean Six Sigma approach. An eMRI Master Black Belt would co-lead a small team of employees using a Lean Six Sigma approach to reduce the failure rate by at least 50%.
Results:
As part of the Lean Six Sigma DMAIC process, measurement systems involved in the evaluation of batches were analyzed for measurement error. It was discovered that a number of measurement systems had large measurement error. A set of measurement system improvements reduced the failure rate by approximately 30% (and also reduced false passes). With high-quality data, process inputs and outputs were analyzed using regression techniques and inputs contributing batch failures were identified. From this analysis, in conjunction with the measurement system improvements, the failure rate was reduced by 58% in less than 4 months
Savings:
The elimination of customer defections due to product unavailability and over $3 million in lost product value annually.
