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Company Profile
Company X is the fastest growing mobile phone
remanufacturing facility here in the Philippines
which is a wholly owned subsidiary of Company
Y. The facility is located at Calamba Premier
Industrial Park. The parent company, Asurion, is
the largest mobile phone insurance in North
America with more than 95 million subscribers.
Asurion is engaged in the mobile phone
insurance business which is an emerging
industry driven by the worldwide growth of
mobile phone users.
COMPANY X Site 1 main business process is
Liquid Crystal Display Module Repair while
COMPANY X Site 2 is focus on handset repair
and assembly.
Abstract
In line with the 2013 COMPANY X Objectives, the team initiates to contribute
on lowering the phone cost of DRDDNA by improving the reclaim usage of D
Cover which is one of the major parts of a cellular phone and also known as
the back housing cover. From July 2013 to Sept 2013 COMPANY X Site2
Lean Lines only achieved an actual reclaim usage of 5% versus the 20% set
target. This paper aims to present the activities done and its results through
PDCA (Plan, Do, Check, Act) approach.



Definition of Terms
DRDDNA - HTC smart phone model
Reclaim Parts - Are recovered good parts from a phone
D Cover - It can be describe as back housing of a phone
Reclaim Usage - Computed by dividing the total reclaim parts used over the total produced
Reclaim Yield - Computed by dividing the recovered reclaimed parts over the total cores input.
N - Represents the market cost of a brand new phone
Cost of N - The cost percentage of a remanufactured phone vs the cost of new phone
AEC - Average Equipment Cost
ASC - Asurion Supply Chain
SSRS - SQL Server Reporting System
OEM - Original Equipment Manufacturer
Cores - Phones came from Asurion customers that will serve as Raw Material in Prodn.
PLAREC - Parts Recovery
RTR - Ready to Repair
IPC - Incoming Parts Control



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Problem Identification and Selection
Project Timeline
A timeline of planned activities are established by the team as a guide to monitor the progress of the
project. We are guided by the below Gantt that follow the PDCA steps where every activity is observed for
completion according to plan.

The team based the selection of the project from the 2013 COMPANY X OBJECTIVES which was set by
the COMPANY X Management. As stated from the said Objectives of the company, Percentage of Phone
Repair Cost vs N misses the target for 3 consecutive Quarters see Figure 1.



Figure 1: COMPANY X Actual Performance Tally Matrix

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FY2013 Q3 Result shows that Percentage of Phone Repair Cost vs. N finished at 30.9% against 26.4%
which gives a 4.5% gap from the target (refer to Graph1). The 4.5% Gap were composed of DRDDNA
(1.2%), DRDRZR2BLK (0.9%), MOTION (0.7%), DRDMICRO (0.4%), DROID4 (0.4%) and OTHER
MODELS (0.9%); and DRDDNA top-notch the reason on not hitting the Phone Repair Cost (refer to
Graph2).



















Considering that the team cannot control the LCM & Other Factors on the DRDDNA Model, we focus our
Project on the NON-LCM Parts and choose D Cover due to high delta when it comes to Reclaim Usage
performance according to Q3 Actual result (refer to Figure 2).



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Analysis of the Present System
The team would like to present two process flows which include the COMPANY X Supply Chain Process
Flow and the Parts Recovery Process Flow of DRDDNA D Cover.

COMPANY X Supply Chain Process Flow

This process flow above represents the MACRO Process flow of the whole COMPANY X Supply Chain.
Highlighted is COMPANY X where phone repair and parts recovery is being done. COMPANY X Site 2 is
the main focus on the flow since DRDDNA D Cover parts recovery is being done on this Site.

DRDDNA D Cover Parts Recovery Process Flow


This process flow above represents the Micro Process Flow on how to perform parts recovery of
DRDDNA D Cover. Its starts with Cores which is describe as phones came from Asurion customers that
will serve as raw Material in Production and ends with withdrawal of Reclaim DRDRDNA D Cover from
Parts Warehouse, on which this part will later on be used on phone assembly.
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Baseline Data
Upon review of the three months performance of DRDRNA D Cover it showed that there is only an
average of only 5% reclaim usage versus the 20% target.


Problem Statement
From July to Sept 2013 COMPANY X Site 2 Lean Lines are only achieving 5% Reclaim Usage for
DRDDNA D Cover against the 20% target.

Note: The 20% reclaim usage target came from the first 100 cores assessed by NPI (New Product
Introduction Engineering).

Identification of the Controllable Root Causes
The team performed brainstorming to determine the potential causes on why we are not achieving the
20% reclaim usage of DRDDNA D Cover.

After listing all the potential root causes (potential cause of the problem) in fishbone diagram, we
categorized the final possible causes as C, X, and N items.

C item Controllable items are items that can be corrected immediately.
N item Noise or uncontrollable items.
X item Critical items that need to have further evaluation and study.



Source: SSRS Data
5% Average
Reclaim
Usage
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Fish Bone Diagram



The below are the summary of number of potential causes in terms of source of variation.


Validation was conducted on all potential true causes as presented on the following items.

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Validation of 3 Potential Controllable (C Items)


Validation of 5 Potential Controllable (X Items )

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Summary of Possible Causes



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Goal Statement
To increase reclaim usage of DRDDNA D Cover from 5% to 20 % by the end of January 2014.

To confirm the set target, the team used two methods of goal setting validation. These are shown below.
However, the team still used the 20% existing target to align with the current usage in parts planning.

Projected Cost Savings
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Selection of Best Alternative Solution

A pay off matrix was establish to determine if a countermeasure will be implemented or not. The team
used a simple but high level decision matrix for this project. The team focused on Benefit and Effort for
the matrix.

The succeeding tables will present all the countermeasures based on the brainstorming and the
corresponding decisions if these will be implemented or not. Decision of the team is based on the above
pay off matrix and on the effectiveness of the alternative solution based on the validation results.


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Potential Problem Analysis
We listed the countermeasures and analyzed if there are potential problems that may arise during the
project implementation.


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Solution Implementation
Implementation Plan
To implement the best solutions provided in this project, an implementation plan was generated.

Description of Implemented Best Solutions








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Evaluation of Results
The below graph shows the remarkable results of improvement in terms of reclaim usage of DRDDNA D
Cover. From a baseline of 5% to an ending project performance of 87% and continuously hitting from
target from Feb to March 2014.

Source: SSRS
Data
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Tangible Benefits

Intangible Benefits
Through this project, all members of the team learned and realized the following Asurion operating
principles:
DIVINE DISCONTENT- team progressively look up all the aspects concerning on how we can
increase the Percentage of Phone Repair Cost vs. N through DRDDNA Parts Reclaim Usage
improvement and not stopping ourselves even we already meet our targets.
ROOL UP OUR SLEEVES- team shows leadership in their field of expertise and shares their
ideas that helped a lot in driving great results.
SHOOT BULLETS- team applied the PDCA and did not fear to fail since we learned a lot from
our experiences.
Standardization

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Self-Evaluation and Future Plan
Team Learning

What went well?
The team was being able to:
Finished the Project in time and gained knowledge on PDCA.
Develop teamwork and integrity
Consciousness on the COMPANY X Objectives and its importance.
Develop skills and capabilities.
Improved Planning and time management
Increase Ownership and Commitment
What went wrong?
Team spends overtime just to support and monitor the project activities.
Some members of the team sacrifice their shifting schedule just to expedite the progress of the
project.
Future Plan
DRDDNA D Cover improvement Phase II: Fan out to DRDRZRHD Family
Acknowledgement
Our team would like to offer our indebtedness thanks to:
- Operations, NPI, PLAREC, PH Analytics, CI, Planning and Warehouse for the great support
that they showed throughout this project.
- Our Leaders, Supervisors and Managers for allowing us to be part of this Project.
- Our adviser, Edgardo Peralta for the continuous guide and inspiration in completing this project.
- To the Management, for giving us this learning opportunity.
- To God Almighty, the ONE who gives us the knowledge, wisdom and strength and never fails to
guide and bless us in our everyday life.
Thank you all!
-End-