UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN VAN THONG INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KIMBERLY CLARK VIETNAM CO., LTD MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR TRAN PHUONG THAO Ho Chi Minh City – Year 2018 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV Table of Contents List of Acronym List of Figure List of Chart List of Table EXECUTIVE SUMMARY CHAPTER 1: PROBLEM IDENTIFICATION 1.1 Company overview 1.1.1 Company introduction 1.1.2 Plant introduction 1.1.3 Manufacturing processing in KC’s plant 10 1.2 Problem mess 11 1.2.1 Symptoms 11 1.2.2 Insight analysis production line BD03 13 1.2.3 Initial Cause-effect map 14 1.3 Problem identification 15 1.3.1 High turnover rate 17 1.3.2 Lack of training and refresh training 18 1.3.3 Inefficiency in product flexibility 19 1.3.4 Inefficiency in engineering change management 20 1.4 Main problem definition and consequences 21 1.4.1 Definition 21 1.4.2 Consequence of the problem 23 CHAPTER SOLUTION SUGGESTION 25 2.1 Cause validation 25 2.2 Alternative solutions 27 2.2.1 Effective document control for engineering drawing during implementing engineering change 28 2.2.1.1 Overview on document control for engineering drawing 28 2.2.1.2 Document control for engineering drawing in Kimberly Clark’s context 29 2.2.1.3 Implimentation 30 2.2.1.4 Budget planning 32 2.2.2 Develop a design for reliability model to eliminate the operation risk 32 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 2.2.2.1 Overview on design for reliability 32 2.2.2.2 Design for reliability in Kimberly Clark’s context 33 2.2.2.3 Implementation 33 2.2.2.4 Budget planning 35 2.2.3 Develop a engineering change process in new product development 36 2.2.3.1 Overview on engineering change process in new product development 36 2.2.3.2 Engineering change process in Kimberly Clark’s context 37 2.2.3.3 Implementation 37 2.2.3.4 Budget planning 39 2.2.4 2.3 Solution selection 40 Action plan in organization 41 2.3.1 Details action plan for solution engineering change process in new produce development 41 2.3.2 Detail action plan for solution develop a design for reliability model to eliminate the operation risk 44 2.3.3 Conclusion 47 CHAPTER 3: SUPPORT INFORMATION 49 3.1 Methodology 49 3.2 Trancript 49 3.2.1 Overview interview on the symtoms 49 3.2.2 Overview interview on the comfirmation 64 Appendices 69 Engineering Change Management Aseesment _ Questionnaire 69 Procedure to executing a product development at Kimberly Clark 71 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV List of Acronym BD03: Production line 3- BD is abbreviated of Binh Duong province, where plant located BD04: Production line 4- BD is abbreviated of Binh Duong province, where plant located BD05: Production line 5- BD is abbreviated of Binh Duong province, where plant located BD06: Production line 6- BD is abbreviated of Binh Duong province, where plant located BD07: Production line 7- BD is abbreviated of Binh Duong province, where plant located BD08: Production line 8- BD is abbreviated of Binh Duong province, where plant located BD09: Production line 9- BD is abbreviated of Binh Duong province, where plant located BD10: Production line 10- BD is abbreviated of Binh Duong province, where plant located BD21: Production line 21- BD is abbreviated of Binh Duong province, where plant located BD22: Production line 22- BD is abbreviated of Binh Duong province, where plant located BD23: Production line 23- BD is abbreviated of Binh Duong province, where plant located BD24: Production line 24- BD is abbreviated of Binh Duong province, where plant located FDI: Foreign Direct Investment VSIP: Vietnam Singapore industrial park FMCG: Fast moving consumer goods EMEA: Europe, the Middle East, and Africa LAO: Latin American Operations APAC: Asia Pacific OEE: Overal Equipment Effectiveness CMM: Capability Maturity Model BOM: Bill of Material ISO: International Organization for Standardization DRCS: Design Release Control System NPD: New Product Development DfR: Design for Reliability TCO: Total cost ownership ECR: Engineering change request EC: Engineering Change INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV PCR: Process change request List of Figure Figure 1: Kimberly Clark Plant vision Figure 2: Kimberly Clark plant organization chart Figure 3: Production line process 10 Figure 4: Initial Cause and effect map 15 Figure 5: Update Cause and effect map 16 Figure 6: Update cause-effect map 24 Figure 7: Final cause and effect map 26 Figure 8: Equipment life cycle 33 Figure 9: Engineering change process 37 Figure 10: Engineering change request 39 Figure 11: Interview summary Lead operator 51 Figure 12: Interview Summary Process Specialist 53 Figure 13: Interview summary Process Engineer 56 Figure 14: Interview summary Asset Leader 59 Figure 15: Interview summary Continuous Improvement Engineer 62 List of Chart Chart 1: Mid- Year Performance –OEE 11 Chart 2: Mid- Year Performance – Waste 12 Chart 3: Engineering change management assessment 25 List of Table Table 1: The production performance of another line from 2016 to Jun 2018 12 Table 2: The production line performance from 2016 to Jun 2018 13 Table 3: The delay information on Production Line 14 Table 4: Turnover ratio 17 Table 5: Newcomer training subject 19 Table 6: Changeover summary 19 Table 7: Financial evaluation on Production line performance 24 Table 8: Criteria evaluate the solution 40 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV EXECUTIVE SUMMARY In manufacturing, the key business responsibility is to produce a product that can supply the demand of customer and the performance is made the competitive elasticity with a rival So that the purpose of the thesis is to explore the causes of low performance on overall equipment efficiency of manufacturing and find out that production line BD03 is the lowest performance from early of 2017 to mid-year 2018 in Kimberly Clark Viet Nam The thesis using theory-informed to group possible problem based on interviews and theory-confirmed combined with depth-interview to figure out the main problem The finding of thesis revealed that the inefficiency engineering change management is the main reason that leads to inefficiency in change management during project implementation for new product development on production line BD03 and strongly impacts to manufacturing performance The inefficiency engineering change management is a serious problem, it leads to internal and external customer dissatisfaction and cost for redesign, human resource constraint for rework, the author has reviewed the literature and the collected data from Kimberly Clark plant during deep interviews with managers, mini-survey on staffs and reports from Kimberly Clark plant of head department, and employees to figure out the main problem and the causes of this problem The solution for inefficiency in engineering change management is developing a design for reliability model to eliminate the operational risk and develop an engineering change process in new product development Both solutions need budget investment approx $27,000 USD for human resource and consultant, this solution will build a strong foundation verification a design change and analysis the impact to machine performance before application on production INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV CHAPTER 1: PROBLEM IDENTIFICATION 1.1 Company overview 1.1.1 Company introduction Kimberly Clark Corporation was established in 1872 in the USA and is now a leading global marketer of a wide range of Family Care, Baby and Child Care, Adult and Feminine Care, Personal Care, and Professional products for use in the home, business, and industry This company focus on providing branded, single-use products in four business areas: • Personal Care • Consumer Tissue • Professional business • Healthcare Kimberly Clark’s remains committed to building sustainability into every aspect of its business This approach maintains the company as well-established sustainability efforts and integrates these existing programs with a number of new initiatives: • Introduced new sustainable products that combine high performance and exceptional quality with significant environmental benefits • Strengthened environmental protection through our enhanced fiber procurement policy • Continued to measure and make progress in reducing our company’s environmental impact through the ambitious goals outlined in our environmental program • Focused on developing more productive working relationships with our global stakeholders Today Kimberly Clark and its well-known global brands are an indispensable part of life for people in more than 175 countries Every day, nearly a quarter of the world's population trust Company brands to enhance their health, hygiene, and wellbeing This INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV trust has led to Company brands holding the No or No share position in more than 80 countries The values of authentic, accountable, innovative and caring describe how company A work with and are judged by our consumers, business partners, investors and each other • Authentic: Our heritage is one of honesty, integrity and courageously doing the right thing • Accountable: We take ownership of our business and our future • Innovative: Our commitment is to new ideas that add value • Caring: We respect each other and care for the communities where we live and work In Vietnam, as one of the leaders in the categories they play in – over the years, they have ensured millions of babies are kept comfortable and thrive through Huggies brand and similarly millions of women are ensured of superior comfortable protection for feminine intimate care needs through the key famous brand Kimberly Clark Vietnam’s story starts in 1991, we introduced the first product to the Vietnamese consumer and it quickly becomes the #1 brand in Vietnam market Production lines were located both in Hanoi and HoChiMinh City Between 1992 and 2000, we also launched the second brand and third brand with lots of success In 2000, we became a 100% FDI Company: Kimberly Clark Vietnam Ltd, wholly owned by Kimberly Clark World Wide Inc In 2003, construction started at Binh Duong province at the Vietnam-Singapore Industrial Park (VSIP) and all manufacturing was quickly consolidated at one location 1.1.2 Plant introduction - The scope of study: Plant of Kimberly Clark Vietnam Ltd - Size of plant: Plant was built in 2003 with the area is 3,000 sqr, it included production, Warehouse for material, Office, Facility The total employee is 500 people INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV - Segmentation of product: Plant of Kimberly Clark Vietnam produce a product that belongs to FMCG industry, the product is feminine care, adult care, and diaper care - Main competitor: Diana Unicharm - Plant address: No 32 Huu Nghi Avenue, VSIP, Thuan An Town, Binh Duong Province, Vietnam Tel: (+84) 274 374 3911 Fax: (+84) 274 376 7068 - Plant vision: Figure 1: Kimberly Clark Plant vision INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV - Plant capacity: In overall, the Kimberly Clark plant does not only produce a product for the local market but also supply product for the internal customers (Kimberly Clark International) such as EMEA, LAO, and APAC regions To momentum support supply chain, there is totally 12 production line at Kimberly Clark plant, in that total amount production line is going to produce Baby care product, production line are going to supply Adult product, the rest is for feminine care product - Organization chart The organization structure of Kimberly Clark based on the manufacturing standard, at the top there is Plant manager and sub-manager for each critical department, there are Production department, Engineering department, Quality department, Logistic department, Continous Improvement department, and Safety department In overall, there are around 500 employees, it included 100 office employees, the remaining employee is following the shift to support the production schedule Mill Manager Operations Manager AFC Asset Leader BD3, BD4, BD9) Operations Manager BCC Asset Leader BD6,BD8, BD21 Logistics Manager Project Engineer Planning Team Leader Mechanical Team Leader WH Team Leader PTM Electrical Team Leader Export Project Leader Packing Coordinator Maintenance Team Leader Imp-Exp Coordinator Process Engineer Electrical Engineer Maintenance Engineer Asset Leader BD5, BD7, BD10 Asset Leader BD22, BD23, BD24 Process Engineer, Electrical Engineer 3rd Party Coordinator Engineering Manager QA&PD Manager Project Leader (Local Project) Process Excellent Manager Country EHS Leader Office Admin Sup LEAN Coordinator QA Engineer (QMS) QA Engineer Exp Project QA Engineer (Material) QA Engineer (QA/QC) Packaging Engineer Facility Engineer; Maint Planner Maintenance Store Coordinator Figure 2: Kimberly Clark plant organization chart INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV High turnover happened at Kimberly Clark plant and it also impacted the engineering team We got more workload from production and there were not enough employees to follow up the engineering change management Probe: is there any solution that can support engineering change management? I think we should create a team to build an engineering change management and develop a procedure that can guide and control people, documentation during change happens 3.2.2 Overview interview on the confirmation As the result from the interview employees from production, engineering to check the potential that might lead to low performance in the production department at the mid-year meeting There is some potential cause has been defined and recognized during implement The second interview has been developed to cross-check the information that references from the theory to figure the potential cause and solution to reconfirm and how it fix with the business condition • Interview Human resource manager for an overview of the training condition Q1: Could you share me the condition training plan for the operator It is nice to discuss with you on the training plan of Kimberly Clark plant, for a training plan, we have developed the early of the year beginning to implement the training plan and implement for the whole year We have set the target training hours for new employee and old employee to enhance the people capability and improve their knowledge then they can promote to a higher position Q2: How we plan the training during the year implementation Well, to make the plan, the first thing we should know the demand training course of each position, such as Lead operation, Operator, Process Specialist, Machine checker, etc Each position will have different training demand so that the training coordinator will perform a site survey to collect the training requirement from each employee of each 64 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV department to have a master training From that, I will evaluate the expectation and balancing the budget to implement a training plan Q3: Can you share any opportunity that we can improve the training There are many opportunities for a training program at Kimberly Clark plant to adapt with World Class Manufacturing We can build a training online system that namely Kimberly Clark university and every employee can attend the training class The second thing that needs to have a system to evaluate the people skill matrix needed for each position then it will help the training plan more successful • Group discussion for suggestion solution with Engineering Manager and Production manager As the suggested solution for improving the efficiency in engineering change management, the author has defined the criteria to perform group discussion with leadership team including Engineering Manager and Production Manager recommendation and orientation of business to ensure each solution can adapt with flexibility strategy of Kimberly Clark plant The criteria in the details of three solutions have been shown during group discussion as following Criteria Solution Solution Solution Budget Large budget Small budget Small budget Scope Large scope in The premium scope that Scope relates to drawing control on provides a process for new product 12 asset machine design in liability in the development project, new improvement Time to 65 weeks for 16 weeks for implement implementation implementation month Question for discussion Q1: How you think which solution is more suitable with Kimberly Clark plant condition 65 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV Engineer manager point of view: “In overall, three proposals can enhance the engineering change management at Kimberly Clark's context, however, the budget and timeline of each solution will impact to implementation time and cost investment For implementation, I think that the project should deploy the solution to apply in project implementation because currently there are many projects is planning so we can apply right now to check the effect of this solution Moreover, solution should implement to provide a tool to evaluate the design” Production manager point of view: “There are many improvements that are going to happen during operation currently So we should implement a solution that can implement as soon as possible In three solution, three solutions can enhance the engineering change management, however, we should consider the human resource and cost constraints so the solution or is the first priority If we can plan a budget for next year we can process with solution 1” Q2: For feasibility study, how you think about the progress on Dream Lite 28 which we are going to apply Design for Reliability Engineer manager feedback:” Dream Lite 28 has applied DfR to enhancing the design capability and this project has done the feasibility study on a machine with a successful result The team need to stay focus and figure out there is any other potential area that can enhance during implement project to provide better performance” Production manager feedback: “ I can see that the process to implement the project better than before after applied the engineer change process during implement new product development and design 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Cambridge University Press, Cambridge; 2007 31 Dym CL, Agogino AM, Eris O, Frey DD, Leifer LJ Engineering design thinking, teaching, and learning Journal of engineering education 2005;94(1):103-20 32 Alting L Life cycle engineering and design CIRP Annals-Manufacturing Technology 1995;44(2):569-80 33 Creasey T Defining change management Prosci and the Change Management Learning Center 2007 34 Riviere A, DaCunha C, Tollenaere M Performances in engineering changes management Recent advances in integrated design and manufacturing in mechanical engineering: Springer; 2003 p 369-78 68 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV Appendices Engineering Change Management Aseesment _ Questionnaire ENGINEERING CHANGE MANAGEMENT ASSESSMENT QUESTION Criteria for assessing the ECM system as a whole Organization Communication Engineering change method Overall assessment The EC process is clearly defined and well understood in the company The time from proposal to the implementation of the change is short Active work accounts for a large proportion of the total time from suggestion to change implementation The total costs of the procedure and change implementation are low Changes increase the competitive advantage of products and lower the costs Few changes are required immediately after the start-up of production of new products The company has a good product concept, in which upgrading and derived products are already envisaged The entire EC process is computer-aided Idea – change request The employees are aware of the importance of improvements and motivated to collect useful proposals The system for collecting proposals is simple and clear Quick responses to proposals are ensured Tracking of changes is enabled Preparing a change Technical assessment is performed of a change’s feasibility and advantages Only a short time is required for preparing a change, including all data for its approval All data for preparing a change are clear and readily accessible (material stocks, accessibility of relevant drawings, 3D models) Additional research can be done quickly and is of high quality The prototype production and testing are quick The costs of change implementation and any savings are assessed Change approval Change approval is performed frequently enough Data on the change are prepared well enough to enable good decisionmaking The correctness of the adopted decisions is ensured from all viewpoints 69 Information system Process definition INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV The adopted decisions are final and there is adequate support for their implementation Change of documentation Quick changes in the documentation are ensured Correct implementation of changes in the entire documentation is ensured: 3D model, drawings, ERP system (bill of materials, material data) Changes in the documentation are in accordance with the approval Changes in the documentation not disturb the current production process Distribution of documentation and implementation in the production process Mix-ups between old and new versions of documents are prevented The costs of document distribution and replacement are low Simultaneous replacement of documents is ensured Professional implementation of changes in the production process is ensured Implementation of changes is always harmonized with the documentation 70 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV Procedure to executing a product development at Kimberly Clark 71 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 72 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 73 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 74 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 75 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 76 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 77 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 78 ... 19 INEFFICIENCY IN ENGINEERING CHANGE MANAGEMENT IN KCV 1.3.4 Inefficiency in engineering change management In general, Engineering change is defined as an alteration made to parts, drawings,... • How engineering drawings are identified (e.g ., owner, number, revision, title) • Who is responsible for creating, reviewing and approving engineering drawings • When engineering drawings may... document control for engineering drawing during implementing engineering change 28 2.2.1.1 Overview on document control for engineering drawing 28 2.2.1.2 Document control for engineering