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
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
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
