Continuous Improvement Plan for Latino Engineering

The assignment presents a continuous improvement plan for Latino Engineering, a company facing customer dissatisfaction due to issues with order processing, product quality, and service delays. The plan leverages Six Sigma methodologies to identify root causes and suggest solutions such as concurrent engineering, process optimization, and software implementation. It also outlines communication strategies and emphasizes the importance of data analysis and employee training for successful implementation.

Continuous Improvement plan
Introduction
An investor organization recently acquired engineering equipments manufacturing
organization called Latino Engineering based in South Whales, Australia. The company had
300 employees and most of them were retained in the company after acquisition. Latino
engineering designed developed and manufactured specialized engineering equipments for
utilities, infrastructure, construction and Oil & gas industries.
Problem Description
After Latino engineering was acquired by the investor firm, the company stared to face some
major issues in the company as complaints of the customers started to increase drastically
within 12 months of the deal. The customers who were earlier happy with the services of the
organization had started to complain about multiple issues such as poor follow ups, delivery
of wrong or defective instruments, long turnaround time, and unresponsive service team.
Rationale
As consumer complaints increased, the customers of Latino engineering were losing
confidence in the organization which further resulted into decrease of orders and thus, a
decrease in revenues of the engineering firm. The bottom line and profitability of the
company were also declined significantly. With the frequency of complaints received about
mentioned issues, the company clearly needs to make improvements in its processing cycle,
quality of equipments, information systems, and service deliveries. With appropriate steps
taken to enhance the existing system of Latino, the company would be able to resolve the
issues that caused complaints to rise. The company has only 3 months to do that. Thus, six
sigma principles would be used and a continuous improvement plan would be developed as it
would allow company to make significant changes in less time. The company is losing its
customers already and if the improvements are not made fast then the company has a risk of
losing even more of them soon. This could be very damaging to the reputation of Latino
engineering as well as the investor organization. Thus, it is essential to develop and
implement a continuous improvement plan in the organization.
Objectives
Objectives of the continuous improvement include:
 Improvement in the turnaround time

Continuous Improvement plan
 Improvement in the service deliveries and follow ups with customers
 Reduce the production of defective parts in the manufacturing unit
 Improve the information systems of the company such that delivery errors can be
reduced
Timeframes
Assuming that the continuous improvement plan would get approved in the first week of Oct
2017, the project would start from 11th Oct 2017 and would be completed in three months by
10th Jan 2018.
Action Steps Milestones
Root cause analysis 25th Oct 2017
Proposal development 5th Nov 2017
Approval of proposal 6th Nov 2017
Initialization and preparation 26th Nov 2017
Activities planning 1st Dec 2017
Final approval of plan 2nd Dec 2017
Quality improvement 5th Dec 2017
Process cycle improvement 10th Dec 2017
Designing and development process improvement 20th Dec 2017
Service delivery improvement 25th Dec 2017
Improved system testing 5th Jan 2018
Employee feedback 8th Jan 2018
Project Closure 10th Jan 2018
Challenges
The challenges that Latino Engineering is currently facing include:
Equipment defects: Customers are complaining of receiving defective orders. Defective
products can result from faults or defects in designing or manufacturing processes. However,
quality issues can still be avoided from reaching the stage of final product delivery if they are
detected using appropriate performance benchmarking or testing procedures. However, the
company is unable to do that because of which, customers are receiving defective products.

Continuous Improvement plan
This suggests that the company needs to improve upon its quality management and
performance management systems such that defect free products can be manufactured.
Decline in the efficiencies: The efficiencies of the operations in the company are reducing
mainly due to decline in productivity of the staff. The staff is unable to follow up with
customers effectively and timely during the designing and development phases which affects
the final outcome of production which is often not satisfactory for the customer. Other issues
that have resulted from these inefficiencies are wrong or misplaced orders, wrong delivery
and bad service (Tech-Clarity, 2012).
Turnaround Time: The Company is facing major delays in processing orders because of
which employees are unable to respond to the queries of customers on time. The customers
are frequently complaining about these delays in serving them. The turnaround time of the
company after placement of the order is very long as per customers. The company lacks
integration in different processes of the supply chain which is further adding to the
turnaround time as the speed of work is dependent on people involved in completion of work.
Moreover, the company is using a number of applications from different vendors that cannot
exchange information between each other directly because of this lack of integration causing
delays in communication and updates.
Wrong deliveries to customers: Some customers of the company have received wrong
deliveries which reflect upon the challenges of delivery and information processing. The
company is thus facing problems in the area of information management which is affecting
the deliver services of the company.
Continuous Improvement Plan
The principles of six sigma are being used for preparing the continuous improvement plan for
Latino Engineering which would include the following:
Root Cause Analysis
The causes behind the problems currently faced by Latino Engineering can be identifies as
below:
Equipment defects: As per six sigma concepts, a defect can defined as a variation from the
expected value of the output that is not acceptable to the user or the customer of the product.
TO be able to see the defect, acceptable limits of the product performance must be known.

Continuous Improvement plan
These limits act as measurable benchmarks of performance in the industry. Benchmarking
can be used to identify the causes behind equipment defects. These benchmarks are defined
by industry experts from the industry (Baudart & Corp, 2016).
Inaccurate order processing: if the data generated or managed during the order
management process is inaccurate then it can lead to deficiencies in deliveries. Some of the
factors where problems can be seen include size of consignment, product value, and
contractual arrangements. Causes behind these problems can include missing address, order
entry errors, order modifications, wrong address entry, and insufficient delivery information
received (Jakobsson, 2010).
Designing and development issues: The customers of Latino Engineering are complaining
about the insufficient follow ups from the staff of the company during the stages of product
design and development that is affecting the outcome of the development. There are
inefficiencies observed in information management that are making it difficult for the
company employees to resolve the customer queries. Common causes of inefficiencies in
information management during design and development could be complexities of product
management, lack of control over changes, and more (Vaidyanathan, 2012).
Turnaround Time: The time taken between the order placement and the delivery is the
turnaround time. A list of activities that consume time in the process include:
 Checking of the availability of stock
 Designing of unavailable equipments
 Identification and listing of part requirements
 Parts procurement
 Parts delivery
 Parts assembling
 Product testing
 Order dispatch
 Logistics and Transportation
 Equipment delivery (Chakraborty, Kumar, & Malguri, 2016)
Needs Assessment
Following improvements are required:

Continuous Improvement plan
Order management: The Company needs to have better control over the order management
system such that processing problems like wrong order entries, order duplication and other
order processing errors can be eliminated.
Turnaround time reduction: As per the complaints from the consumers, the turnaround
time is high which is causing concerns in customers. Thus, the company has to work on the
process cycle time in a way to reduce the total turnaround time for the customer orders.
Service delivery: Service delivery problems can cause problems of delays, delivery errors,
and can affect the servicing capability of the company employees. Because of this lack of the
staff productivity, customers are getting dissatisfied. In order to solve these service
management issues, the company needs to work of the services.
Reduction in Defects: Defects are resulted when the product is not fulfilling the quality
requirements. The company is not able to ensure that the deigning and manufacturing
processes follow the desired quality standards which are why defects are increasing. To make
improvement in the situation, it is essential that the company uses a strong quality
management practice.
Improvement Actions
The needs identified in the previous step can be fulfilled using following action steps:
 Order management process control: To control order management process,
organization should use right structure with right people having right skills. Thus, the
company needs to modify its structure to enable better control which can be done by
centralizing management of resources so that the whole lifecycle of the product can
be managed from a single place. With this centralization, multiple processes including
product catalogue, product pricing, and information management can be managed
from one location.
 Enhanced operational efficiencies: Order processing cost can be reduced with
reduction in quotation errors during the processing of orders. For this, an automation
software may be installed in the organization that would allow employees to process
orders through the system which would reduce the probability of errors and thus,
improve the efficiency of order processing.
 Improve quality: To enhance the quality of services provided by the company
including designing, development and manufacturing, it is essential that the business

Continuous Improvement plan
processes implemented are accurate and consistent with the quality specifications or
benchmarks defined by the industry. Thus, a industry trends must be studied with
respect to quality of products and systems based on which performance of products
may be measured such hat defects can be identified and eli9minated before the final
product is delivered to the customer (Capgemini, 2017).
 Turnaround time reduction: Centralization of processes would also centralize the
information sources such that order processing time would reduce as multiple systems
would not be required for managing information. Further, with automation of the
order processing system using computers would reduce the time taken by the
employees on managing processes which would further reduce the turnaround time.
An application can be implemented such that it provides automatic task allocation
facility upon receiving the order such that the interdepartmental communication time
is reduced. The system would automatically check for the availability of the person
and would assign the task accordingly and the information about the same would be
notified to all the employees allocated work and those managing them through the
centralized system. All these measures would reduce the turnaround time significantly
(MindTree, 2017). Besides these measures, there can be several other ways that
company can use to reduce the order processing cycle time for Latino Engineering
such as:
 The processing of the orders is done in a sequential manner such that one process
is followed at one time. However, some of the processes can be actually run
simultaneously without the need of waiting for a previous process to complete. If
this is done, the waiting time and thus, the processing cycle time would also be
reduced. Concurrent engineering methods can help the staff do this. Some of the
tasks that can be managed simultaneously include concept development, bill
creation, and product designing. With the implementation of concurrent
engineering, the process cycle can be reduced up to 80%.
 Besides concurrent processing, modification in some of the processes can also
help reduce the processing cycle time such as document approvals. Instead of
taking approvals for every process immediately, the approval process from one
department can be clubbed such that all the processes and documents to be
approved go one department at one time instead of going to and fro between
different departments for approvals. This would reduce the processing time of the
order (Bhojni & Raj, 2015).

Continuous Improvement plan
 When people are working in the organization, they can get interruptions from
multiple calls from clients for follow up. Instead of the staff answering their calls,
if an IVR system can be implemented, the system can be used for automatic
updating of the information to the client such that only when there is some major
concern that needs to be discussed with the company staff, the staff would be
connected to. This would reduce the e number of calls that would go to the staff
directly and thus, will save the order processing time (Andersen, 1999).
Implementation Plan
For implementation of the continuous improvement plan in Latino engineering using six
sigma processes, the time available to the company is only 3 months and thus, a fast and
highly organized process that guarantees effective implementation is required. For this, the
company can take Awareness-Motivation-Competency-Implementation approach in which
implementation would take four steps including:
Awareness: Before the actual implementation of the continuous improvement plan, it is
essential that the employees of the company are well informed about the expected changes in
the system so that they would know how the changes in the processes would affect their
work. Thus, the first step to this development would be creation of awareness about the
adoption of six sigma and continuous improvement processes in employees of Latino
Engineering. Some methods of awareness creation can be used by Latino Engineering such as
poster campaign on expected results, informative newsletters, suggestion boxes, posting of
benchmark results in the industry, motivational screen savers on systems and more.
Motivation: Once the staff is well informed, it also has to be motivated so that an acceptance
is there for the new methods which would encourage the employees to learn and use new
practices adopted by the organization. The role of senior management would be critical at this
stage as they would need to keep their juniors motivated towards achievements which can be
done by providing them rewards and recognition. The company needs a cultural
transformation to be able to adopt the six sigma practices and thus, it is essential that all the
employees are motivated towards adopting the change as the change would demand
significant work from them.

Continuous Improvement plan
Competency development: , At this stage, the employees of Latino Engineering would be
trained on the use and applications of six sigma practices as it would necessary to develop
their competencies for managing the improvement processes. Developing competencies is
necessary because of the employees are not competent enough then it can lead to failure of
the improvement plan. The organization can use trainings for enhancing the competencies of
people. Training would build a strong foundation for the development as the employees
would be able to learn about six sigma practices as well as acquire skills. Certifications on six
sigma can also be provided to a selected staff to give them extensive practical knowledge.
Regular training involving all the staff members can include topics like waste elimination,
lean principles, DMAIC, defect identification, quality management, lean design, and
productive maintenance.
Implementation: Once the staff is both motivated and equipped to handle required
improvement tasks and processes, the actual implementation of the six sigma methods would
take place through the execution of the planned activities. However, before this can happen, a
suitable environment has to be created for adoption for which, data would be collected from
the system and it would be analyzed using software tools for suggesting how improvement
practices can be implemented. The tools can also be used for tracking project activities,
managing training and triggering the processes for improvement. A continuous morning and
reviewing of the improvement activities would help the company ensure that the plan is
implemented effectively and is giving expected results (Sarma, 2017)
Communication Plan
Six sigma knowledge-base provides a variety of ways communication can be managed
between the staff and the stakeholders for different purposes. Some of these methods can be
used by Latino engineering such as:
 Meetings for regular discussions and decision making
 Town hall gatherings for announcements
 Memos to employees for information
 Presentations for training and guidance
 Minutes recording for updates
 Q&A sessions for training and problem resolution
 Intranet posts for informing

Continuous Improvement plan
 Manuals for training
 Emails for regular communication
 Phone calls for emergencies for informing
 Milestone events for giving recognition and motivation
 Survey for getting feedback
 Suggestion boxes for improvement
 Brown bag lunches for team management
Based on the needs of stakeholder groups, appropriate method of communication can be
used.
Conclusions
This report was prepared to suggest a continuous improvement plan for the Latino
Engineering which is facing major complaints from customers who are upset about the order
processing errors, processing time delays, product and service quality. The report explored
the root causes of the problems identified and it was found that the company needed to
improve upon its order processing system, information management system, and quality
management practices. For this, a continuous improvement plan based on six sigma
principles was recommended. Some improvement steps were suggested including
implementation of concurrent engineering, modification of process sequences, installation of
order processing software, and more. These changes are expected to reduce the process
turnaround time, enhance service delivery capabilities and reduce product defects.
References
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Limited.
Capgemini. (2017). Streamlining the Order-to-Cash process. Capgemini.

Continuous Improvement plan
Chakraborty, S., Kumar, B., & Malguri, A. (2016). Reducing the Truck Turnaround Time
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Advanced Information Science and Technology (IJAIST), 39-45.
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Manufacturing Industry. Genpact.