Pressure from their customers for shorter lead times and improved
on-time delivery performance was causing this privately held
company severe difficulty. They faced a very real risk of losing
some critical accounts. Key customers were demanding "next
day" shipment. They expected to be able to place an order
today and pick up or have their order shipped first thing the
next day. The company had spent many months attempted to make the
transition to lean on their own, with minimal success. Lead times
were still too long, and delivery performance was unacceptable.
Lean Solutions:
In addition to the more traditional lean techniques such as
instituting kanban controls and improving change-over times, this
client required some more fundamental disciplines. Step one was
to immediately change the attitude in regard to schedule
attainment. Brief all-employee meetings were held on all shifts.
The need for absolute schedule adherence was explained and
personalized: "A commitment date to a customer is a
"promise". How do you feel when someone breaks their
promise?" We instituted a simple policy: The day ends when
the schedule is complete, … NOT the other way around.
Overtime was authorized and basically automatic if needed to
attain the daily schedule. The next step was to
"stagger" the shifts so that each shift could be held
accountable for schedule attainment. Improvement curves (Goals)
were set by the employees, and monitored daily. The next problem
was in creating flexible capacity (the "rubber"
factory). Like most companies, the majority of their work force
was on the first shift. This posed a problem: Many orders were
received late in the day, for next day shipment. We obviously
needed to change the balance of our shifts. Goals were set to
gradually move toward a 50/50 balance of the day and night
shifts. This was accomplished through volunteers, replacements
for attrition, advancement opportunities, and rate adjustments.
Impact/Results:
Within weeks, on-time delivery was at or near 100%! Average lead
times were cut from two weeks to three days. Set-up times and Lot
sizes were cut by 75%. Total inventory was reduced by 50%, and
one entire building was freed up for new product introduction.
