A Case study

presentation on
FRUMHERJI LTD., REYKJAvik: THE VEHICLE
INSPECTION AND EMISSIONS-TESTING
PROCESS

Group#1
Trinath Ojha
Pankaj Agrawal
 Case facts
Frumherji Ltd- Background
•Leading inspection, testing and legal metrology company in Iceland.
•Vehicle inspections constituted 52% and private vehicle inspections represented 7%
•Primary competitor: Aðalskoðun Ltd.
•Employees(101, 52 for vehicle inspection division) rotated among Frumherji locations
Government Inspection Requirements
•Inspection for emissions before vehicle was sold
•Again when they were 3 yrs. old
•Again after 5 yrs. and regular annual checks thereafter
Hestháls Station Facility
•3 lanes for standardized vehicles: 2 for personal vehicle inspection, 1 for high volume customers with special
requirements
•4th lane for large vehicles was separated from the other 3 lanes by a wall
•Employees applied 5S principles in alignment with the company’s goals
•Only “Out” sign in the inspection hall
•Desk at either end of inspection hall
•Refreshments and reading materials for customers available at reception area
 BLUEPRINT
Physical Evidence
Collect vehicle Reception office, Inspection 3 lanes for Desk at exit for
and test results Word of mouth waiting hall, hall( base 1- standardized document inspection
monitors 4),parking lot vehicles,1 for large
vehicles
Customer Actions
Arrival at the station,
parking at reception Meet receptionist Wait in parking lot Drive to designated Collect vehicle and test
or inspection hall, and show doc when or in reception until lane in base 2 ,leave results after inspection
pick a number and called monitor displays keys in ignition and completed
wait for service number wait at the lounge
On Stage/Visible
Contact
Employee action
Check for insurance Obtain keys and
fee and tax and
documents and exit
then give number
Back
stage/invisible
contact Generate and display Update and display
employee action numbers for numbers for driving
submissions of docs to inspection hall
Support
processes
Registration system Sequential inspection Update documents
Govt data base and
in assembly line with inspection results
registration system
 CURRENT PROCESS FLOW

BASE-4
Base-1 BASE- BASE- • INSPECTION
• INSPECTION
• PROCESS TIME 1
2 3 OF HOIST
UNDER
MIN CARRIAGE
• INSPECT • INSPECTION AND
• FAILURE RATE
1.70% MISC OF BRAKES RECORDING
• RECEPTIONIST 1 • PROCESS • PROCESS • PROCESS TIME
• CLERK-1 TIME 7 MIN TIME 1.5 MIN 8 MIN
• FAILURE RATE • FAILURE RATE • FAILURE RATE
15.23% 1.75% 7.63%
• INSPECTOR 1 • INSPECTOR 1 • INSPECTOR 1

6.5 MIN BUSINESS VA 1 MIN

8 MIN 41.5 MIN 0 MIN
VA= 17.5 MIN
1 MIN 7 MIN 1.5 MIN 8 MIN
NVA= 56 MIN
0 to 16MIN 5 to 78 min 4 to 10 1 to 2 MIN 4 to 12 MIN
CURRENT Or ‘As-Is’ STATE VSM
 FINDINGS FROM AS IS VSM
TAKT TIME Problem: Customer waiting time for inspection and emission
testing for private vehicles exceeds acceptable levels for customers
and is causing some customers to “defect” to the competitor.
10
8 WAITING TIME
TIME MINUTE

6 6.4 6.4 6.4 6.4

80
4 70
2
Actual wait: 73.5 min
60

TIME IN MINS
0 50
BASE 1 BASE 2 BASE 3 BASE 4 40
30
BASE
20 Acceptable wait: 25 min
 Average cars per day 75 10
0
1997 2008
 Taking working time 8 Hours and lunch YEAR
and tea breaks combined as 1 hour
ACTUAL WAIT ACCEPTABLE WAIT

VA & NVA IN MINUTES

What: Long Customer wait
Location: Hesthal’s Station, Private vehicle Inspection
17.5; 24%
Timing: Since privatisation, Worst Late in Day, esp. Thursday and
VA Friday. Magnified recently due to growth in private vehicles
NVA Magnitude: Triple the Acceptable Customer Wait. Causing defection
56; 76%
to Competitors and eroding market share
 WAITING TIME

LONG WAITING TIME

PROCESS CUSTOMER DEMAND VARIABILITY EMPLOYEES FACILITY

LIMITED MULTIPLE NO VARIATION

LIMITED HIGH 2 LOT
OPERATING DATA ENTRY ERRORS IN WEATHER ADVANCE IN SKILL SINAGE
PROCESS ATTRITION PARKING
HOURS POINTS PROCESSING BOOKING LEVEL
KNOWLEDGE

VACATION
DURING OUTDATED
CUSTOMER
BRINGING PEAK PROCESS
LOAD PREFERNCE
VEHICLES DEMAND DESIGN
IMBALANCE WITH MINOR
ISSUES
 PROBABLE SOLUTIONS

SEPARATE SEPARATE DEGIGNATED

LANE SECOND DAYS SATURDAAYS
DRIVE
INSPECTION
THROUH
KIASKO

CHANGE
WORKING AND
CHANGE LONGER
REPLACE HOURS WORKING
FACILITY
HOIST WITH
TRENCH
PROBABLE HOURS
SOLUTIONS HAND HELD
BALANCE COMPUTERS INTERNET
FOR BOOKING WITH
THE LINE INSPECTION ADVANCE
ENTRY PAYMENT
TWO INSPECTORS PER
LANE AND BOTH CHANGE WORK ELECTRONIC
COMPLETING ENTIRE CONFIGURATION ELECTRONIC
SOLUTION
INSPECTION CUSTOMER SIGN
INDIVIDUALLY IN
FUTURE STATE VSM
 THE CIRCUIT ALLOCATION
Distribution of work between inspectors by using the circuit: Assign all the work elements to
two inspectors per lane and the second inspector will follow the first inspector at a gap of one
base.

BASE-1 BASE-2 BASE-3

RETURN TO BASE -1
 FUTURE PROCESS FLOW

BASE-4 TOTAL INSPECTOR

Base-1 BASE- BASE- • INSPECTION
REQUIRED: 8( 2 IN
EACH PERSONAL
• DOCUMENT
INSPECTION
2 3 OF HOIST
UNDER CAR LANE AND 2
• PROCESS TIME 1 CARRIAGE IN HEAVY HEHICLE
• INSPECT • INSPECTION AND
MIN
• FAILURE RATE MISC OF BRAKES RECORDING LANE) INSTEAD OF
1.70% • PROCESS • PROCESS • PROCESS TIME 11.
• KIASKO TIME 7 MIN TIME 1.5 MIN 8 MIN
MANAGER • FAILURE RATE • FAILURE RATE • FAILURE RATE
15.23% 1.75% 7.63%
• INSPECTOR 2 • INSPECTOR 1 • INSPECTOR 1

04MIN 0 MIN BUSINESS VA 1 MIN

0 MIN 0 MIN
VA= 15 MIN
1 MIN 5 MIN 2 MIN 7 MIN
NVA= 4 MIN
 INFERENCE OF FUTURE VSM
1. Drive through kiosk will help better management of traffic and allocation so will enhance the customer
satisfaction.
2. In every 7th minute a car will be inspected in a single lane with only 2 inspectors so, this time is very close to takt
time of 6.4, so running 1 lane during winter will be efficient for private cars.
3. During month of May, three lanes may be put to operation taking consideration of traffic.
4. Over all inspector requirement will reduce by 3 numbers which not only increase the profit also solve the problem
of requirement.
5. Due to requirement of less inspectors there is possibility of grooming the reserve inspectors by imparting training
and providing paid holidays in rotation, which will motivate inspectors no to defect to competitors.
6. In future if the demand increases exponentially then the hoisting system can be replaced with trench system to
save at least 1 min, due to removal of raising and lowering process.
7. U-shape process flow will add to the minimal travelling of inspectors, if in future it goes for a process modification.
8. Providing inspectors with hand held computers will reduce the document processing time as well as reworks.
9. The inspectors will park the inspected vehicles in the parking lot adjacent to kiosk and will hand over the key to
kiosk clerk that way saves inspector’s time.
10. The kiosk clerk will provide single window for both document verification and providing inspection report to
customers.