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Int. J. Services and Operations Management, Vol. X, No.

Y, xxxx 1

Failure analysis of automobile spares in a


manufacturing supply chain distribution centre using
Six Sigma DMAIC framework

S. Srivatsa Srinivas* and V. Raja Sreedharan


Department of Industrial Engineering,
College of Engineering, Guindy,
Anna University,
Chennai 600 025, India
Email: srivats.sss@gmail.com
Email: rajasreedharan@hotmail.com
*Corresponding author

Abstract: The spares distribution centre is an important member of a


manufacturing supply chain where the automobile components are packaged
and distributed to customers and retail units. Though the components do not
undergo processing in a spare parts centre, various other operations are
performed during distribution that contributes to component failures. The Six
Sigma DMAIC framework is used for the analysis of the failures effectively.
The different causes of rejections are generated using the cause and effect
diagram and each of these causes are validated with the help of experiments
and other tools. The root cause of this problem arising in the distribution centre
is identified to be the packing method. An economic solution to the existing
cause of the problem is implemented with minor variations in the current
packing method and the results are discussed. A structured follow up plan for
continuous improvement is also suggested.
Keywords: Spare parts distribution unit; failure analysis; automobile
spares; supply chain; rejections; packing method; quality; Six Sigma;
define-measure-analyse-improve-control; DMAIC.
Reference to this paper should be made as follows: Srinivas, S.S. and
Sreedharan, V.R. (xxxx) Failure analysis of automobile spares in a
manufacturing supply chain distribution centre using Six Sigma DMAIC
framework, Int. J. Services and Operations Management, Vol. X, No. Y,
pp.000000.
Biographical notes: S. Srivatsa Srinivas is an undergraduate student at the
Department of Industrial Engineering, College of Engineering, Guindy, Anna
University, Chennai. He has worked on projects in the areas of process
parameters optimisation and failure analysis of spare parts. His areas of
interest include optimisation, total quality management, multi-criteria decision
making and logistics management.
V. Raja Sreedharan is working as a Teaching Fellow and pursuing his PhD in
the area of Lean Six Sigma under the guidance of Dr. R. Raju (Professor and
Head), in the Department of Industrial Engineering, College of Engineering,
Guindy, Anna University, Chennai. He has published articles on Lean Six
Sigma using Systematic Literature Review, TOPSIS, Structural Equation
Modelling etc. He has handled classes for postgraduate students on quality
management. His current research interests are centred in the field of Lean Six
Sigma, supply chain management and business research methods.

Copyright 20XX Inderscience Enterprises Ltd.


2 S.S. Srinivas and V.R. Sreedharan

1 Introduction

Quality can be defined as the capability of the company to manufacture or service


products in order to meet or exceed the expectations of the customer. The use of various
quality control techniques can help to keep the rejections to a minimum level. However,
the costs associated with quality needs to be kept under control. The distribution centres
also experience problems similar to the manufacturing sector. There has not been much
application of quality control techniques in the context of a distribution centre. A change
management framework is required for the application of lean thinking in distribution
centres (Jaca et al., 2012). The applicability of such type of procedures to volatile sectors
like retail and distribution is not an easy task. Quality control tools, total quality
management, lean, Six Sigma and the integrated version of lean Six Sigma have found
applications in diverse areas of manufacturing, service, healthcare, government and
logistics. Roy and Mukherjee (2015) put forward a framework for quality enhancement in
multiple stage processes. However, these procedures have not been implemented to
analyse failure of components in the distribution unit. The distribution centre, which is an
important stakeholder in the supply chain is not an exception by any means. In practice,
the distribution centres perform important activities such as storage and shipment to the
retailers or end consumers. It is observed that the functioning of these units are not very
similar to the manufacturing plants. Thus, the failure analysis of spare parts in a
distribution centre requires the application of quality management procedures differently.
This is one of the first works to analyse the failures in a spares distribution centre and
implement a methodology to tackle problems in this area. This article aims to address the
concerns of managers in a distribution centre and suggests them means by which the
processes can be improved.
Six Sigma has been one of the successfully implemented techniques in various
organisations. It is not necessary to use complex techniques to solve real world problems.
Sometimes, simple tools and techniques can yield better results. The review of different
continuous improvement processes aids in understanding and implementing the strategies
according to the problem environment (Bhuiyan and Baghel, 2005; Bendell, 2006;
Bhamu and Singh Sangwan, 2014). The study of similarities and differences between the
various continuous improvements processes helps in choosing the appropriate quality
management technique to the problem faced (Andersson et al., 2006). There are abundant
tools available for problem solving in the case of different types of industries. However,
selection, adaptation and implementation of the problem solving methodology relevant to
the problem circumstances are essential. Otherwise, simple issues arising in the industry
might become complex and get out of control. Thus, a continuous improvement initiative
or a set of such initiatives must be carefully identified, selected and implemented in an
organisation to understand the advantages and problem arising as a result of such
enactment.
The article is organised as follows. A brief introduction to the given case is given in
the initial section. In the following sections, the problem of component rejections is
solved using the define-measure-analyse-improve-control (DMAIC) approach and the
most suitable improvements are suggested and implemented. The conclusions are
discussed in the final section. The overall flow chart of the Six Sigma project is presented
in Figure 1.
Failure analysis of automobile spares in a manufacturing supply chain 3

Figure 1 Overall flow chart

2 Literature review on the applications of Six Sigma methodology

Tremendous efforts are on in the last few decades to improve the operations in the
industries with the application of different optimisation techniques. The diversity of such
organisations increases the need for original and applied research in this area to
understand the intricacies involved in the applications of these continuous improvement
techniques to different sectors. Six Sigma is one such procedure that aids the industry in
4 S.S. Srinivas and V.R. Sreedharan

achieving goals set by the company itself over a period of time. Six Sigma is defined as
an integrated methodology for following continuous improvement of organisational
profits as well as customer satisfaction. This approach has been successfully implemented
in miscellaneous organisations in the past and discussed in the literature. In fact,
Six Sigma has proven to be an effective tool and easy to implement successfully in a
non-manufacturing environment (Dahlgaard and Mi Dahlgaard-Park, 2006). In this
review of literature, the various applications of Six Sigma in different environments is
discussed to demonstrate the effectiveness of this problem solving methodology across
organisational boundaries. Desai (2006) presented an Indian case where the customer
delivery commitments, one of the core business processes are improved using the Six
Sigma methodology. Kumar (2007) assessed the status of Six Sigma implementation in a
UK small and medium enterprise. Based on the findings, it is reported that critical
success factor is uncompromising commitment from top management and the two
hurdles are poor training and resource availability. A Six Sigma implementation
framework for the small and medium sized enterprises is an important step in the right
direction as presented by Zu et al. (2008). It is not only the big industrial powerhouses
which benefit from this technique. Rather, organisations irrespective of their size and
type have shown to implement the strategy successfully. While different problems are
known to exist in different industries, this continuous improvement initiative provides a
clear cut strategy to analyse problems and implement solutions.
In the case of manufacturing sector, this approach is applied to improve quality and
reduce energy cost in touch panel manufacturing with lean principles (Chen and Lyu,
2009) and automotive supplier industry (Bilgen and en, 2012) respectively. Chen and
Lyu (2009) utilised the Six Sigma method to enhance quality of products in touch panel
production. Bilgen and en (2012) produced significant reductions in energy cost by the
optimisation of materials transferring heat loss. The process industries too have
understood the importance of Six Sigma in industrial context. Bauelas et al. (2005)
implemented Six Sigma to reduce waste in the process of coating successfully with
minimum cost. Substantial quality enhancements have also been achieved with the
application of Six Sigma in a multinational automotive manufacturing firm (Krishna
et al., 2008).
The service and healthcare sectors have also utilised this technique to their advantage.
A good amount of annual savings was achieved with the application of Six Sigma
methodology in hospitals (Heuvel et al., 2005). Koutouvalas et al. (2005) produced
empirical evidence to present the perceived service quality management and loyalty in
the operations of public and private banks. Ozcelik (2010) suggested that the move of Six
Sigma from manufacturing to service has been successful based on the study of a few
major firms in the US service sector. Prashar (2015) presented a case of the application of
Six Sigma in a public utilities firm to improve the reading of energy meters. Digalwar
et al. (2014) presented and validated quality management concepts for software industries
in India. These cases clearly illustrate the benefits of the application of Six Sigma in the
areas of service and healthcare. Further, the positive results of the application of Six
Sigma in these areas are discussed elaborately.
This methodology also finds useful application in different types of supply chains
(Das, 2005; Knowles et al., 2005; Chappell and Peck, 2006; Chang et al., 2012). These
applications deal with the management of supply chain in terms of service quality.
However, the issues of quality due to defectives in distribution and retail units are not
discussed clearly in these cases. The problem of failure analysis considered in this paper
Failure analysis of automobile spares in a manufacturing supply chain 5

is not a direct indicator of service quality, i.e., the problem is not related to the delivery
time and delivery requirements. On the contrary, the primary problem in this case is the
damages in the delivered products itself. It is to be understood that the defectives are not
generated due to manufacturing errors or other wrongdoings at the manufacturers place.
The issue of these rejections is solely due to the inefficient activities of the distribution
centre. As a result, the focus of reducing these rejections lies with the distribution centre
only.
The application of Six Sigma has also extended to other sectors beyond
manufacturing, process, service, healthcare and supply chains. The results of a Six Sigma
project for longitudinal beam construction in a railway station are discussed (Stewart and
Spencer, 2006). To reduce the consumption of de-mineralised water in thermal power
plants, the Six Sigma DMAIC approach has been used (Kaushik and Khanduja, 2009).
These articles are an illustration of the fact that Six Sigma approach can be applied to
different sectors depending on the need with appropriate changes relevant to that sector.
This review clearly demonstrates that Six Sigma is not restricted to a particular sector
alone and can be applied to any sector with proper planning and implementation
procedure. However, the problem of analysing failures in a supply chain distribution
centre is closely related to the service sector. As the distribution centre stores and ships
the products, the procedures have to be streamlined so that the goods reach the final
destination safely. Once the spare parts are delivered and sold, the goodwill of the
distributor is at stake. The case of distribution centre varies from the service sector in the
sense that the service is not consumed as it is delivered. However, the customers will
develop an idea about the distribution unit from the quality of the products delivered and
it becomes the responsibility of the distribution centre to maintain the quality of products
at its place. From the literature review of Six Sigma, it is clear that this approach is one of
the first candidates to be considered for the reduction of automobile rejections in the
distribution centre.

3 Research study

This study is conducted in a spare parts distribution centre in India. The problem analysis
in an organisation can be performed using various methods depending on the problem
conditions. However, the ultimate aim is to minimise or eliminate the root cause of
rejections in the unit. The Six Sigma (DMAIC) approach is used for problem solving in
this case as the current quality level of the distribution unit is not satisfactory. Six Sigma
approach has been found to be very useful in the context of analysing causes of failures
and provides a structured approach to this problem. Six Sigma process and DMAIC
framework can be understood and implemented easily when compared to other
competing procedures like lean principles (Dahlgaard and Mi Dahlgaard-Park, 2006).
The application of Six Sigma in non-manufacturing is also known to be easy and
efficient. The distribution centre is considered to be a part of the non-manufacturing
bandwagon as the processes as the processes are completely different from that of a
manufacturing setup. The benefits of implementing Six Sigma in a distribution centre are
the following:
6 S.S. Srinivas and V.R. Sreedharan

reduction in the cost of poor quality


decision making based on facts rather than intuition
reduction in the non-value added activities
increase in the job satisfaction and morale of the workers
An earlier study focused on the criticality of the crown wheel and pinion components to
vehicular movement and its subsequent impact on repair times (Bensely et al., 2006).
Thus, the timely availability and quality of the spare parts naturally becomes essential.
The rejection of the crown wheel and pinion spares is studied in this case with respect to
distribution unit operations.
The materials do not undergo any transformation in a distribution unit. This does not
mean that the distribution unit is devoid of any operations. In fact, distribution centre is
one of the key members of the logistics system that requires proper maintenance and
control to ensure safe journey of the products from the manufacturing site to the retailer
or customer. The sequence of operations in a spare parts distribution unit is discussed
briefly and is shown in Figure 2.

Figure 2 Sequence of operations in a spare parts distribution unit

3.1 Supplier evaluation and selection


Supplier selection is one of the foremost activities for a distribution centre. Multi criteria
decision making is often used for vendor evaluation and selection. In this case study, the
manufacturers and distributors of the component belong to the same organisation. As a
result, this step is eliminated in the process of study.
Failure analysis of automobile spares in a manufacturing supply chain 7

3.2 Spares receiving


The spares are received from the manufacturer via trucks. It is important to make sure
that space in the warehouse is cleared to receive goods at the time of delivery. The
components arrive in sets according to the demand of the product during that particular
period of time.

3.3 Identification of the components and inspection


The required components are identified and the goods pass through initial inspection.
100% is impossible to perform as it is costly and time-consuming. Thus, sampling
inspection is followed.

3.4 Classification and storage


Once the components are inspected, the spare parts which meet the criteria set for
inspection move to the next stage in the sequence of operations. The other components
are returned back to the supplier. The parts are then categorised depending on the type
and size and stored in the warehouses in stacks.

3.5 Line inspection, packaging and labelling


The spares are inspected once again and sent to the packaging and labelling section. In
this section, each of these spare parts are packed into boxes and then labelled
subsequently.

3.6 Final inspection of components and dispatch


Final inspection of the components is performed and the products are dispatched to the
retailer or customer. The parts are loaded onto the different types of trucks depending on
their availability at that point of time.

4 Rejections analysis using Six Sigma approach

The DMAIC procedure, associated with Six Sigma, follows a systematic and structured
approach to problem solving. Bilgen and en (2012) emphasised on the supreme abilities
of Six Sigma and mentioned the advantages of Six Sigma over other continuous
improvement initiatives. The advantageous features of Six Sigma include customer focus,
scientific approach to decision making and effective problem solving methodology. This
systematic procedure has shown to produce incredible results in terms of effectiveness of
the problem solved. The current problem in the spare parts distribution is solved with the
help of DMAIC methodology.
8 S.S. Srinivas and V.R. Sreedharan

4.1 Define phase


The problem under consideration is studied for a period of three months with respect to
the number of defectives. The project charter for the given problem is presented in
Table 1. The project charter defines the actual problem in the spare parts distribution unit
in a holistic manner. Planning phase in a project can be improved with the
implementation of project charter. The distribution centre cannot allow the number of
rejections to increase as it leads to goodwill loss among the retailers and end customers.
Table 1 Project charter

Product selected Crown wheel and pinion


Experts Mr. A
Coordinator Mr. B
Champion Mr. C
Customer Retailers and direct consumers
Team members Workers, supervisors and managers
Element Description
Objective 1 To find the root cause of automobile component failures
2 To suggest an innovative and cheap solution to the identified root
cause of the problem
Scope Processes in a spares distribution centre
Techniques used DMAIC approach, Fishbone diagram
Customer expectations High quality components
Benefits 1 Identification and elimination of the root cause of automobile
component failures
2 Maintenance of high quality standards, retention of customers and
reputation of the organisation

4.2 Measure phase


The defectives are caused due to three types of damages. These damages are classified as
damage 1, damage 2 and damage 3. It is seen that the rejections due to damage 1 is the
most. Damage 1 refers to the defects in the component teeth, damage 2 refers to defects
in other parts of the component and damage 3 refers to fitment defects. The Pareto chart
as seen in Figure 3 clearly indicates the scenario. The first two damages are grouped
together as they are due to very similar causes and the fitment damage is considered
separately. Fitment is assumed to have zero impact on the quality of the part as it closely
correlated with the first two damages itself indirectly. For example, one of the causes of
failure of the component might be due to the higher hardness of fitment when compared
to the part. However, this cause can be incorporated in the overall first two damages.
Similarly, other causes of fitment damage like friction and improper fit are known to
have zero significance for this actual problem. Thus, the problem essentially reduces to
analysing the causes of component rejections due to damage 1 alone.
Failure analysis of automobile spares in a manufacturing supply chain 9

Figure 3 Pareto chart

4.3 Analyse phase


This is the most important phase in the problem analysis. This phase involves the
identification of the causes for the problem. Fishbone diagram is proved to be an
effective tool in identifying the potential causes for the final outcome. The fishbone
analysis for the failure of automobile components is presented in Figure 4. The causes
listed out in the fishbone diagram need not be necessarily true. It gives an overview of the
potential causes that might be involved in the product damage. Cause and effect analysis
is a tool that uses expert opinion and brainstorming to identify the potential causes that
lead to defects in a product or service. The causes observed in the cause and effect
diagram are authenticated with the help of actual observations and experiments.

Figure 4 Fishbone analysis for the failure of spares


10 S.S. Srinivas and V.R. Sreedharan

After the analysis of different causes listed in the fishbone diagram, it is found that the
current packaging method is the root cause of the problem of failure. The packing
materials strength can be understood only after the effects of static and dynamic loads on
the packing material are investigated. The effect of loads on the component is studied
only based on the point of failure or breakage on the component. The forces acting on the
component is not given much importance. As far as static loading is concerned, ten
packing boxes are arranged one over another in the stores. However, the load that can be
withstood by the part is unknown. The lowest box in the pile has to withstand the load of
nine other parts. It is observed that each box can withstand static loads of about 90 kg
after the trial. Though the existing storage method is fit for the type 2 part, it leads to
rejections in the type 1 component. The number of type 1 components shipped is much
more than that of the type 2 components. As a result, it is concluded that the components
do not withstand static loads. In the case of dynamic loads, the component is moved from
the warehouse to the truck and vice versa. As mentioned earlier, there are a wide variety
of vehicles used for transportation based on the availability. Experiments are conducted
to understand the heights at which failure of the component occurs for different trucks.
About five trials each are conducted for loading and unloading respectively. The heights
of failure vary with the two kinds of components. The average failure heights for the
component with the existing method of packing are presented in Table 2. This is the real
time loads that the components are subject to. Thus, the packing strength of the material
needs to be improved to increase the heights of failure much more than the current
heights as mentioned in Table 2.
Table 2 Failure heights under dynamic loading with the current method

Condition Minimum height (m) Maximum height (m)


Type 1 component
Loading 0.14 0.23
Unloading 0.16 0.22
Type 2 component
Loading 0.49 0.67
Unloading 0.53 0.62

4.4 Improve phase


Once the root cause of the problem in the spare parts distribution centre is identified, the
next step is to suggest a realistic solution to the problem. The existing packing method is
identified as the root cause of the problem of rejections. Through experiments and
structured studies, it is found that an additional layer of packing would help in the
reduction or elimination of defectives.
As a result, cushion is added to current setting. Cushion is added to provide stability
and resistance to high force impact loads. Similar trials are conducted with the
recommended packing method. The points of failure for different trials are observed and
noted down. The average failure heights for the component with the suggested method of
packing are presented in Table 3. It is clearly seen that the additional packing layer has
tremendously added to the strength of the current packing setup. As Table 3 indicates, the
failure heights of the suggested method are much higher than the failure heights of the
Failure analysis of automobile spares in a manufacturing supply chain 11

existing method. Thus, a solution has been arrived at to the problem of packing material
strength.
Table 3 Failure heights under dynamic loading with the suggested method

Condition Minimum height (m) Maximum height (m)


Type 1 component
Loading 0.46 0.55
Unloading 0.43 0.54
Type 2 component
Loading 1.55 1.72
Unloading 1.49 1.68

4.5 Control phase


The follow-up stage is the important of all phases in a problem solving scenario. Often,
there are situations where the solution to the problem is found, but not complied
consistently thereafter. The magnificence of continuous improvement techniques lies in
the fact that it seeks to enhance the working methods consistently over a period of time.
Six Sigma also helps to achieve maximum effectiveness in problem solving. A control
plan is to be developed to improve the operations in a distribution unit further. In this
case, the current state of the organisation is that the existing problem has been solved.
However, there is a huge scope for improvement in terms of other work methods and
activities. Kaizen initiatives could be applied to aid in the process of continuous
improvement by identifying the critical operations, targeting them and improving the sub-
activities into those operations. The most appropriate control plan for the current study is
presented in Table 4.
Table 4 Control plan

Operation Objective Condition Control plan


Cause and To achieve the target of To eliminate all the Validation of causes
effect analysis zero defectives causes of the problem periodically
Histogram To achieve continuous Application of kaizen Regular 5S audits
improvement in the process into the system

5 Practical implications

This is one of the first studies to analyse the rejections in a spare parts distribution unit.
The earlier studies have looked at the rejections in a manufacturing setup. However, the
rejections in a distribution unit are not primarily due to manufacturing defects. The
defects in this case are likely to arise because of activities related entirely to the
distribution unit. The fishbone analysis in Figure 4 illustrates the activities that lead to the
rejection of spare parts. Moreover, the analysis of rejections provides a clear idea about
the root cause of the problem the packing method. With the introduction of the new
packing method consisting of a cushion between the packing material and the spare part,
the experiments indicate that the number of rejections is bound to decrease. In addition,
12 S.S. Srinivas and V.R. Sreedharan

the minor change in packing method is very economic and aids in nullifying the other
potential cause of rejections like improper work procedures, incorrect inspection
techniques, etc. The following points indicate the implications of implementing this
solution.
the packing method is economic
the suggested solution is simple and easy to implement
by attacking and rectifying this root cause, the other potential causes are eliminated
It is extremely important to note that the solutions need not be very complex. In fact,
simple solutions are easily implementable in industries and are preferred by managers in
the industry. The experimental results suggest that the proposed method performs much
better the current packing method. This will eventually lead to significant savings for the
company in terms of cost of goodwill loss among the retailers and end customers owing
to the failure of the spare parts.
Further, this case study will aid the managers in the distribution centres to improve
the processes and reduce rejections at this stage. The supply chains cannot afford to lose
money at this stage of the supply chain due to different factors which are controllable. In
this case, the change in packing method might serve the needs of the company. However,
this might not be the case with other organisations and supply chains. As a result, it
becomes imperative on part of the different distribution centres to apply the Six Sigma
framework to find the problems and overcome them. This approach is not restricted to
failure analysis of products in these firms. It is reiterated that simple solutions could
produce significant cost savings for the company than complex solutions which might
become extremely difficult to implement in the first place. This framework comes under
the broader umbrella of continuous improvement initiatives and will aid the companies in
improving the processes day-by-day.

6 Conclusions

The need to reduce the number of failures becomes necessary for the spare parts
distribution unit to avoid the loss of goodwill among the customers and retailers. The
current problem in the distribution unit is defined in a precise and clear manner and
analysed with the help of DMAIC approach. This problem solving tool has worked
effectively as evidenced from the past literature and assists in reducing the number of
rejections in this case. Cause and Effect diagrams are used to list out the potential causes
and the causes are validated in the analyse phase with real-time observations and
experiments. The packing method is identified to be the root cause of this problem and a
new solution is suggested to reduce the damages in component. Cushion between the
component and the packing material proved to be an efficient solution and did not require
many alterations to the current method. The proposed method presented with much better
solutions than the present method of packing.
Failure analysis of automobile spares in a manufacturing supply chain 13

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