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The Ask:

A leading manufacturer of electronics for the communications industry that was struggling to achieve customer demand. 4-week delivery promise was failing to attain even 50% OTIF within 7-weeks. Over 700 employees and on a recruitment drive to try and match demand. Despite this performance, sales were spiralling and overtime was “the norm” to try and catch-up

Challenges:

  • Massive overdues and everyone chasing their own tails to move products around the factory
  • The layout was functionally organised with large batch production and significant amounts of WIP, totally uncontrolled
  • Priorities changing within each day according to which customer was shouting the loudest (both internal and external customers complaining)
  • No visibility of job status – current batch methods were out of control with WIP piles everywhere, no evidence of batch control or lot control so jobs were being repeated
  • Plan was to invest in more buildings, equipment and people to quell demand

Implication

  • Key accounts were threatening to take their work elsewhere
  • Threat of line stoppages at customers being charged back to supplier
  • Significant hit to the organisation’s bottom line in large scale discounting to appease the customers
  • Company seriously considering asking their “smaller” customers to go elsewhere

Objective

  • Stop the bleeding and the pain
  • Understand if there truly were capacity issues or if the situation was just a symptom of current ways of working
  • Achieve stability, then visibility, then capability
  • Establish a better way of production that will regain control and give the company a breathing space
  • Prove the concept and roll-out across all product lines

The Approach:

Benchmarked current performance against the competition to identify where they were against the rest.

Analysed current processes, methods and flows to identify bottlenecks and opportunities.

Defined and designed a new way of working.

Reviewed product portfolio to select a pilot to demonstrate potential and would have the biggest impact for the business.

Roll-out successes across all areas.

Toolkit

  • Factory redesign
  • Lean tools and techniques from VSM to cellular design
  • Work balancing and competency and skills matching
  • Single piece flow and Kanban concepts
  • Meaningful, accurate and timely KPIs at point of use
  • Visual Factory

Results and Benefits

  • Initial pilot cell reduced space required from 45k ft2 to 15k ft2 of factory
  • Cell produced 66% of total demand with a team of 25 team members (was 120)
  • 6-weeks of stock around the factory eliminated completely
  • Moved to flexible cell, single-piece flow with Kanban control between equipment
  • Overtime for the pilot product was running at 20% of factory and became zero
  • The 7-week for 50% OTIF delivery became an achieved 1-week delivery @ 100%
  • Lean concepts and cells rolled-out across all areas within a 12-month period
  • Work rebalanced to be achieved with a fixed workforce of 150 (from 700 and rising)
  • Live and accurate order status progress visible at all times within the Visual Factory