Master's Culminating Experience
This project was conducted in order to analyze the causes of domestic trouble tickets (DTRs) at Green Tokai Co., Ltd., as well as provide recommendations on how to reduce them. DTRs cost Green Tokai $518,000 annually.
At the onset of this project it became clear that one of the major contributors to DTRs was the labeling process that was in place. Green Tokai was shipping incorrectly labeled parts to customers. This problem became the primary focus of the project, and several recommendations were made in order to reduce the DTRs due to labeling issues.
Many of the labeling issues could be traced to the general categories of training and poor processes. The team investigated each of these areas and made recommendations to correct them. Most of these recommendations were procedural changes that could be implemented at little cost to the company. The recommendation for a line-side labeling system, however, was the exception.
A cost-benefit analysis was performed on a line-side labeling system called Error Proof. This system was to be installed by Freedom Technologies Inc. The cost-benefit analysis for this system revealed that it would have an initial implementation cost of $176,060, and it was expected to provide an annual DTR savings of $21,500. As an added benefit the system would also reduce scrap by $11,000 per year. The analysis showed that at the end of the 10 year useful life of the system it would have a cumulative net present value of $21,600.
Wintrich, G. C.
(2004). Cost Benefit Analysis of an Automated Labeling System for Green Tokai Co., LTD.. .