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Reduce Cycle Time-114
The Situation:
International plastic compounds and resins manufacturer experienced a growing number of SKUs, increased inventory costs, and increased manufacturing, warehousing and transportation costs in their four plants directly related to their efforts to meet customer promise dates.
The Driver Goal:
By year end:
- Reduce customer service lead times by 50%
- Reduce order-to-deliver costs by 3 cents per pound
- Reduce finished goods inventory by $10 million
- Reduce annual freight and warehousing costs by $2 million
Actions Taken:
- Developed and implemented a Goal Transition and Alignment process
- Created an Overall Equipment Effectiveness program to support smaller batches and reduce set-up time
- Developed and implemented a System for Managing and created a comprehensive training program for management and supervisory staff
- Developed and installed a Demand-Pull Replenishment Based Production Scheduling process
- Restructured support organizations in the four plants and headquarters
- Created and implemented a Product/Customer Rationalization program
- Designed a program to reduce freight and warehousing costs through the use of direct shipments
The Results:
- Reduced customer service lead time by more than 50%
- Reduced order-to-deliver costs by 3.5 cents per pound
- Reduced finished goods inventory by $11 million
- Reduced annual freight and warehousing costs by $2 million
- Reduced customer “re-promise” rates from 18% to 5%
- Reduced machine change over time by 61%
- Increased direct shipments from plans from 23% to 43%
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