International Journal of Mechanical And Production Engineering, ISSN: 2320-2092, Volume- 2, Issue- 7, July-2014
SERVICE QUALITY IMPROVEMENT BY KAIZEN THROUGH
MAKIGAMI ANALYSIS
1
SHARAD GAIKWAD, 2HARSHAL KULKARNI
1,2
Department of Mechanical Engineering, Walchand College of Engineering, VishramBaug, Sangli, Maharashtra, India.
E-mail: [Link]@[Link], 2harry7kulkarni@[Link]
Abstract: Organizational processes have composed culture of the Product and Service. Sound management of service
quality is one of the cost effective solution to survive and lead in today’s competitive era. In this study, an Office TPM tool
‘Makigami Analysis’ through PDCA is introduced to lean the administrative activities. ‘Improvement of ‘Goods Receipt to
Vendor Payment Process’ by Kaizen at ‘Tata Hitachi Construction Machinery Co. Ltd., Dharwad’ is described as a case
study of Makigami Analysis. Importance of activities are discussed and results are communicated.
Keywords: Service quality improvement, Office TPM, Makigami Analysis, PDCA, Kaizen, ESCAP, PDCA, Goods Receipt
to Vendor Payment Process.
I. INTRODUCTION Chain Activity) analysis at Tata Hitachi Construction
Machinery Co. Ltd. (THCM), Dharwad.
Industrial Business Functions can be broadly
classified as ‘Manufacturing’ and ‘Supportive II. MAKIGAMI ANALYSIS
functions’ like Supply Chain, Quality Management,
Administrative Management etc. These ‘Supportive Total Productive Maintenance (TPM) is the success
Business functions’ have composite nature of product key of the Lean Management. ‘Office TPM’ is one of
as well as service characteristics. the pillars of TPM, which imparts ‘Lean’
The way to succeed any kind of the Organization in characteristics to the administrative activities. ‘Lean’
competitive scenario is to strive continuously for administrative activities improve the service
improving the quality of the product or service, to characteristics; which enhance the customer
focus towards customer satisfaction. This satisfaction. ‘Makigami Analysis’ is one of the LEAD
improvement is achieved throughimplementing the [Lean Enterprise Across Disciplines] techniques to
best suitable practices to meet particular objective. Office TPM.
1.1 Problem Statement: 2.1 Overview:
Generally, ‘Lean and Agile philosophy’ is highly Makigami literally means ‘Role of the Paper’ in
cantered about ‘Manufacturing’. But, it is equally Japanese [1]. It makes visible the tracking ofthe paper
important to deploy theseconcepts to the ‘supportive movement [rolling] through the office, and helps to
functions’to really en-cash upon. Improving Service get the holistic view of the process through
Quality of ‘supportive Business Functions’ through systematic thinking; which leads organization to the
‘Lean and Agile Philosophy’ is more beneficial as it next successful [Link] tool is used for
is easy, it has higher Return On Investment (ROI) and investigation of the current ‘Business Process’, which
shorter Payback Period. identifies ‘Seven Deadly Losses’ those further used to
The primary reason for this study is lack of sufficient design future state ‘Business Process Map’ [1].
evidence for ‘Lean drive in services’, which has Makigami Analysis consists of mapping every step –
considerable impact on the organizational sub step activities, places the process into structured
performance. swim lanes (PSD – Process Structure Diagram) to
1.2 Objective: make concurrent processes deeply accessible [2].
There are many practices to improve the quality of Although, there are enough similarities between
the product or service, and to keep the customer ‘Value Stream Mapping (VSM)’ and ‘Makigami’, but
orientation in business dealings. This study aims it can handle the non tangible and non visible
toframe the service sector in ‘Lean Philosophy’ products (service) flow and value creations, unlike
through Total Productive Maintenance (TPM), to VSM [2].
improve service response and to capture the impact of 2.2 Analysis methodology:
Lean services on the organization. Analysis moves through Plan-Do-Check-Act
(PDCA)steps as follows:
1.3 Scope: Plan:[3]
This study encompassesthe introduction of the 1. Team formation is the first key step to
‘Makigami Analysis’and the case study of ‘Goods succeed the [Link] team should consist
Receipt to Vendor Payment Process’ (A Supply of people from all the business functional
and 2 - 3 people who don’t know the
Service Quality Improvement By Kaizen Through Makigami Analysis
39
International Journal of Mechanical And Production Engineering, ISSN: 2320-2092, Volume- 2, Issue- 7, July-2014
process, to contribute ‘Silly questionnaire’ service package can be offered to customer within
during brainstorming. stipulated time frame. The essence of being ‘Lean’
2. ‘Ninja’ (analyser) creates ‘Birds Eye View can be extracted by turning the negative spiral of
(BEV)’ of the process after Team formation. ‘starvation due to cost cutting’ to the ‘profit growth to
3. Then team defines objective and SMART betterment’ [1].
(Specific, Measurable, Attainable, Realistic Makigami Analysis can be customized as per the
and Timely) goals of the project. priorities. Activities and sub-activities can be divided
Do: [2] into small – small tasks for further studies. But, team
4. Team maps the process in matrix form, with has to take wise decision about activity break downs,
the movement of the information, activities based on real value addition to the analysis, and
performed by different parties and people whether skipping some of the activity breakdown
involved, document or media used in keep the losses undetected or not. Even, displaying
communication and there hand-offs, the analysis also differs from organization to
products, time needed for activities and organization, and is the decision of the team.
associated problems, standard work formats,
additional resources required to expand the
working scope, wasteful and Non Value
Added (NVA) activities, ways to eliminate
them etc.
Some Analysis charts are shown in Figure 1
and Figure 2.
Check:
5. Process Brainstorming reveals the ‘deep loss
analysis’, composed of various losses like
control loss, process loss, stagnation loss,
operational losses like over production,
defect, rework loss etc [1, 4]. Figure 1: Makigami Analysis at Mitsubishi
6. This develops ‘as if’ process map, with
improved ‘through put time’, better ‘cycle
time’, fewer transfers, reduced man power
requirements and errors. This mapping also
helps in the formulating Top Priority (must
do) projects, High Potential (high impact, but
difficult to implement) projects, Quick Hits
(low impact, easy to implement) projects,
and Long Term (low impact, difficult to
implement) projects. Kaizen Projects are the
most valuable outcome of the project [2].
Act:[2]
7. After approval through ‘decision makers’,
standard working document is prepared, new Figure 2: Makigami Analysis at THCM, Jamshedpur.
process is communicated to the involved
personnel, training is provided for proper 2. CASE STUDY:
implementation. ‘Goods Receipt to Vendor Payment Process’ (here
Again PDCA: [2] onwards mentioned as ‘process’) under the scope of
8. Follow – up audits are critically examined ‘Supply Chain Management (SCM)’ at ‘Tata Hitachi
for sustained improvement, and to define Construction Machinery Company Limited, Dharwad
further project. [THCM]’ is targeted to analyze by Makigami to
2.3 Outcomes: improve vendor satisfaction.
Changes proposed by Makigami Analysis are simple, 3.1 Background:
but having considerable impact on the service quality. ‘Quick turnaround of the goods’ vehicles’ and
Though, major changes are achieved within 2 to 3 ‘Knowledge about material transit status’were the
months, but to orient people towards ‘new demands of the transporters and vendors (customers)
behaviour’, from ‘tasks or functions’ to ‘processes or to THCM, have alarmed the investigation of the
systems’ takes at least one year [2]. process. TPM circle has initiated the drive with
‘Lean process’ and ‘Reduced throughput time’ as orientation of the process.
outcome of the analysis, can be reinvested in the 3.2 Process orientation:
addition of ‘extra value things’ or can be used for Plan:
‘new loss reduction activities’. This leads to quicker Process is composed of 10 activities, out of which last
service response, which indirectly means improved ‘Vendor Payment’ is financial last activity, governed
Service Quality Improvement By Kaizen Through Makigami Analysis
40
International Journal of Mechanical And Production Engineering, ISSN: 2320-2092, Volume- 2, Issue- 7, July-2014
by finance. In all, 9 activities left with the circle to go cut – shortened by providing simple bar-coding and
with. They are as follows: scan gun technique, as shown in Figure 4.
1. Transporter reporting at Material Gate. This can’t be tackled by restricting no. of invoices /
2. Goods Receipt MIGO (103) entry in SAP consignment as it deviate financial practices, as per
3. MIRA entry in SAP ‘What – If analysis’. So, bar-coding and scan gun
4. Physical verification at gate for overall idea can be implemented by incorporating ‘Supplier
consignment Relationship Management (SRM)’portal in SAP,
5. Physical verification at stores and material deploying the responsibility of correct invoice entry
unloading in SAP to vendor end, and accessing the invoice data
6. Acknowledgement to the transporter through Automatic Serial No. (ASN) code scanning.
7. Goods Receipt in SAP through MIGO (105) This automation has reduced the activity time to 0.5
8. Vehicle moving out of the factory premises min only***. SRM portal also takes care to convey the
9. Availing CENVat credit online material receipt status to vendor.
Process has formed by rolling of four documents ___________________________________________
(papers): **Smooth material flow indicates no extreme emergency of
1. Goods Receipt No. (GRN) the material demand. This emergency may arise due to
2. Material Movement Control Form (MCF) short shipment, rejection of the material, handling damage,
3. Vehicle Release Note (VRN) any unrecognized material defect, any uncertain production
mishap.
4. Excise copy of the invoice. ***Provided invoices are correct and complete. (Ex.
These activities are composed of physical and service Sufficient no. of copies of the invoice, matching Part No.
(knowledge management) activities. Problem can be with Part name, Correct Purchase Order (P. O.), Correct
tackled either by improving the logistic activities or quantity of the material mentioned as in the P.O. etc.)
by service activities. But, improving logistic activities A wise solution for better tracking of the internal
is costlier than handling service activities. Project of logistics of the material and SAP entry, is to paste the
service activities has higher ROI and shorter Payback barcode on the material itself for ‘A / Super A and
Period. some of the B’ class items and on the sizable packets
Again, activities’ times need to be recorded on the of the C class items. But this has some practical
basis of either Invoice or Consignment, as every limitations. This may increase the physical
consignment has different no. of invoices. So, every movements of the scan-gun operator. It increases the
activity time is converted to per invoice, considering vendors’ workload beyond their acceptable limit, as
average 10no. of invoice / consignment, for better ‘What – If’ suggests. Search for suitable and
clarification in the analysis. This time is recorded ergonomically accessible place on the material
after averaging of the months’ time studies. surface, to paste the barcode is matter of further
TPM team has formed the Office TPM team, and studies. This may change the surface integrity of the
‘Ninja’ is also assigned to work with the service structural items, which needs to be painted to make
sector of ‘Knowledge Management’. them ready for assembly.
Office TPM team has simply decided to map and MIGO (103) provides MCF (transcript invoice to
analyse the process by ‘Makigami Analysis’. standard THCM format) to Vendor person, their
Office TPM team has decided the target to reduce the onwards used as reference document through the
process turnaround time at least by 30% process.
3.3 Analysis*: ‘MIRA entry’ is input to finance given by SCM,
Do: which linkages ‘Goods Receipt’ to ‘Vendor
‘Vehicle Reporting at Material Gate’ takes 6 minfor Payment’. Manual invoice feeding for MIRA, also
registering invoice details and to issue GRN to gets omitted after SRM and again 2 min are saved.
___________________________________________ Superficial physical verification of the material
*Entire analysis sheet is difficult to describe and attach, but against overall consignment at material gate and
only important points are described herewith. detail verification while unloading the material are
theconsignment. mandatory and Value Added (VA) activities, and are
Under smooth material flow**,gateman sends vendor bounded by THCM policies. This develops better
person to ‘invoice entry MIGO (103) in SAP’, as the accountability, and provides double check to the
turn comes-up. Here invoices are checked thoroughly consignment. They take 1 min and 5 min [10 min /
and they are entered manually in the SAP, which consignment and 50 min / consignment] respectively.
consumes 3 min. MIGO (103) entry indicates Material is unloaded at various locations in the plant,
material receipt,inventory ready for processing like like centralized stores, attachment area, open yard etc.
inspection, painting and suppose to be consumed, to Some materials are directly feeded on the line on
minimize inventory overheads. Team has found this Just-In-Time (JIT) basis. (These vendors are termed
manual entry as time consuming and laborious as Plant-In-Plant (PIP) vendors, according THCM
activity. Brainstorming through ‘Why – Why terminology.)
analysis’ reveals that, this time consumption can be After unloading of the material, transporter is
provided with Material Receipt acknowledgement
Service Quality Improvement By Kaizen Through Makigami Analysis
41
International Journal of Mechanical And Production Engineering, ISSN: 2320-2092, Volume- 2, Issue- 7, July-2014
(MR) and VRN, counts for 30 sec (5 min / Eliminated Activities:
consignment). VRN is considered as redundant o MIRA entry in SAP
storage of the same knowledge (data) [(which has o CENvat Credit availing
registered already at material gate) (activity 1) and in ___________________________________________
the system at MIGO (103) (activity 2)]. So, MR is *Results are Graphically Represented in the Annexure.
counted as VA and VRN as Non VA (NVA) activity,
by the team.
Team has decided to modify the acknowledgement
process to combine MR with VRN. Team has also
found that, time can be saved if dismantling and
sorting of the invoice document set can be avoided.
Use of ‘Easy hold pins’, and modification of MR
stamp can save 15 sec (2.5 min / consignment), as
team has reported.
‘MIGO (105) entry in SAP’ counts for 2 min (20 min
/ consignment). Period between MIGO (103) and
MIGO (105) is the period for which inventory is
blocked, and it is the time during which inventory
Figure 3: Makigami Analysis Display Board at THCM,
causes to erosion of company overheads. Again, this Dharwad.
is the period available for activities like quality Automated hence Simplified Activity:
checks, material rectification (if any), invoice o MIGO (103) entry in SAP
clarification (if any) [Link] (105) back-flushes the Intangible benefits:
material blocked by MIGO (103) for production o Increased Vendor Satisfaction
consumptions. Vendor needs to be paid after o Increased Employee Morale
stipulated credit period that starts from MIGO (103), Tangible benefits:
where as MIGO (105) actually permits to consume
the material. So, shortening the period between Man–Hours savings(approx.) 4500 Man -
MIGO (103) and MIGO (105) is important by the (Annual) Hours
financial cycle point of view, and at the same time it Annual amount savings 6.77 /-
should be enough for material pre-processing (before (Millions Rs.)
consumption). No NVA is found by the team during
MIGO (105), but it’s routing through SRM makes Process time is reduced by 25.55% by modification,
aware to vendor about material short shipment, and 85% target is achieved by the team.
rejection, acceptance etc. After MIGO (105), excise 3.5 Future Scope:
copy of the invoice is sent to excise officer for Presently, Makigami Analysis does not have
CENVat. No NVA observed by the team for MIGO considered the possibilities like material short
(105) entry in SAP. shipment, material rejection etc. These inherent
Quick feedback about material receipt and acceptance processes can be integrated for thorough
status at MIGO (103) and MIGO (105) respectively, understanding of the process and downsizing of the
considerably enhances vendor satisfaction. Vendor ‘Through-Put-Time’.
can chase easily about the payment. Act:
Vehicle can move out of the vehicle premises within This step calls for the actual implementation of the
3 min / consignment. Transporter shows the VRN to process, followed by document preparation for the
gateman, gateman checks the vehicle for empty standard working procedure and training to the
stands / pallet loadings, abnormalities if any, and personnel supposed to be involved in the process.
releases the vehicle.
CENVat credit availing activity also gets eliminated
after implementation of SRM, and 3 min (15 min /
consignment) are saved, as this process goes
automatically in the system.
Process completes formally by Paying the Vendor
after 30 days of credit period after MIGO (103)
(material receipt).
So, in nutshell, SRM portal is implemented in SAP as
Kaizen countermeasure, to hit all the potential
activities and to lean the process through ESCAP
(Eliminate, Simplify, Combine, Automate, and
Parallel) way.
Before Kaizen
3.4 Results*:
Check:
Service Quality Improvement By Kaizen Through Makigami Analysis
42
International Journal of Mechanical And Production Engineering, ISSN: 2320-2092, Volume- 2, Issue- 7, July-2014
It has manufacturing bases at Kharagpur, Jamshedpur
and Dharwad. Organization is market leader in Indian
Construction Equipment Industry and has more than
50% market share in excavator segment.
CONCLUSIONS
Makigami Analysis is very simple and cost effective
VSM tool in administrative (service) sector (office
After Kaizen TPM), which simply tells to map the existing process,
to modify it. Basically, Makigami makes the process
Figure 4: Before Kaizen and After Kaizen status of visible, and hence suitable to investigate. It brings all
the MIGO (103) entry in SAP (Activity 2) the new seven management tools under common roof,
Currently, SRM is implemented at THCM, for 60% to incur considerable savings.
of the vendors’ consignment. These Vendors are
targeted based on Parato Analysis of their Business REFERENCES
Share.
1. [Link]
THCM PROFILE 2. Lea P. Tonkin, ‘Administrative lean moves forward,
Worldwide, Update on Excellence’, Target vol. 25,
Number 3, Page 44 - 46, third issue 2009.
Organization was established and known as TELCO, 3. Constantine May, ChristopheSchaller, ‘Sustainable
in 1964. Currently, THCM is joint venture of ‘Tata Training of Office TPM using ‘Teaching Office’’,
Motors’ and ‘Hitachi Construction Machinery, Presentation at the 11th TPM National Conference,
Japan’, producer of construction equipments like Chennai, Sept.’2011
4. A. Chiarini, ‘Lean Organization: From the tools of the
Hydraulic Excavators, Backhoe-loaders etc., since Toyota Production Systems to Lean Office’, Perspective
1984. in Business Culture 3.
Figure 1: Graphical representation of the process before modification
Service Quality Improvement By Kaizen Through Makigami Analysis
43
International Journal of Mechanical And Production Engineering, ISSN: 2320-2092, Volume- 2, Issue- 7, July-2014
Figure 2: Graphical representation of the modified process.
Service Quality Improvement By Kaizen Through Makigami Analysis
44
