Project title: Replace existing laser cutting machine Plan no: Q-5

Date initiated: 09/20/16

Description: Determine, select, purchase, and install an appropriate Date needed: 10/20/16
laser cutting machine that will meet our need through 2016. Approval by: A.B
Team leader: C.D
Linked to what (strategic objective, contract, policy, procedure, Team member: E.F
regulatory requirement)?: AUD#002 - Resulting from June 3, 2016 Team member: G.H
process audit and quality decision of July 5, 2016. Quality team member: I.J

Project objectives: To replace existing cutting machine with the most cost-effective laser cutting machine
that meet engineering specifications, capital equipment purchase policy, and procedure criteria, by Aug 31, 2010
Must meet SMED-type setup requirements and accommodate manufacturing cell configuration changes as
needed when lean thinking is applied in the plant.

Scope (Where and for whom will be solution/implementation be applied? What limitations and
constraints?):Up to 10 equipment vendors will be contacted with our Request for Proposal. Up to five vendor
proposals will be evaluated in detail. Up to three vendors' machines will be given to U.S vendors, if all other
factors are equal.

Deliverables (include outputs re content, outputs re project management, and outcomes):

o Evaluate criteria
o Engineering specifications
o Request for Proposal
o Review of project status at weekly management meeting (time and costs expended)

By what criteria/measures will completion and success of project be measured?:

o Deadline met
o Equipment meeting all specifications and production requirements selected, purchased, installed, tested,
and turned over to production.
o Purchase within capital project policy parameters

Assumptions made that might affect project (resources, circumstances outside this project):
Machine selected will not require predelivery design modifications.

Describe the overall approach to be taken, data needed, processes to apply:

A three-person team will be formed (leader from quality, members from engineering and production).
Within an extended work week (48 hours), the team will:
o Research appropriate vendors and their equipment.
o Prepare for Requests for Approsal from selected vendors.
o Evaluate proposals and select machines to subject to demonstration testing.
o Select and place purchase order for equipment.
o Arrange for appropriate operator and supervisor training.
o Provide necessary changes to procedures and work instructions.
o Install, test, accept, and turn over machine to production.

When should the project be started to meet the date needed/wanted?: August 5, 2016.

Estimate the resources required (time, personnel, facilities, equipment, tools, materials, money):
o Quality engineer for 16 hours per week for 4 weeks
o Production engineer for 16 hours per week for 3 weeks
o Production planner for 16 hours per week for 4 weeks
o T&L expenses for trips to machine demonstration $2,000
o T&L expenses for training first operator and supervisor $1,000
o Machine replacement (transportation, rigging, etc.) $2,500
o Machine cost $85,000
o Other expenses $2,000

Is there sufficient organizational capacity and are resource sufficient to meet the objectives?:
Yes

Estimate the benefits versus costs value: Annualized decrease in setup costs = $75,000. Annualized decrease
in cycle time = $200,000. Salvage value obsolete machine = $5,000. Project costs = $14,000. Annual amotized
machine cost = $170,000. Total costs = $184,000. First-year payoff ($280,000 - $184,000) = $96,000. Second-
year payoff = $110,000.
(Outline and major steps and dates on page 2)
 Action Plan - Steps
Plan No: Q5
Outline the major steps to be taken, a projected start and finish date for each step,
and the person to be responsible for each step. Attach any backup data.

Step No. Activity/Event Description Depends Person

on Step Start date Finish date responsible
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ualized decrease