A motor manufacturer’s warehouse space and on-hand materials were growing exponentially as it received, processed, and stored material for potential future use. As a result, warehoused inventory increased from one to seven warehouses due to lack of a defined inventory and replenishment strategy.
The motor company desired the right mix of on-hand SKUs in order to optimize material flow from one warehouse instead of the seven it currently operated.
Additional challenges included:
1) parts damage because of storage issues,
2) usage of new parts due to salvage parts not being available,
3) lost time from material unavailability, and
4) multiple storage points causing confusion and downtime due to lack of parts.
Recognizing a need to extend its lean manufacturing program in o rder to tackle problem areas in the warehouse, the motor company partnered with LeanCor to optimize material flow and reduce production time losses due to parts shortages.
As with other lean manufacturing clients, LeanCor focused on the opportunities for improvement within the scope of a warehouse design, transfer and PFEP (Plan for Every Part) implementation project. Focusing on the reduction of inventory allowed for packaging and material flow improvements that freed up production space and also improved overall safety and profitability of operations. The team created an AutoCAD design of a new warehouse, and used takt time calculations to determine the right number of shuttles, equipment, and resources. LeanCor used PFEP as the foundation of the future state parts strategy and 5S to sustain optimal inventory levels and locations. Additionally, right sizing of the inventory strategy allowed for anticipated production growth.
As a result of this project, the motor company was able to lead and make decisions based on the total cost of fulfillment. This project provided the opportunity to create optimal outcomes in the areas of ergonomics, safety, quality, space utilization, cost, and delivery. The customer achieved its goals of no longer needing six storage facilities and a satellite warehouse, a plan for every part driven by FIFO, implementation of pull systems, 100% visibility of all materials and activity supporting material flow, and a drastic reduction in production downtime. These improvements not only enhanced the warehouse layout and design, but were aligned with the motor company’s lean manufacturing goals.
- 80% Reduction – expedites from warehouse
- 66% Reduction – downtime due to parts shortages
- 4% Reduction – warehouse overtime due to ad hoc planning
- 3% Reduction – water-spider overtime due to ad hoc planning
- 3% Reduction – DOH material due to stability and FIFO
- Foundation for future collaborative kaizen events
- Problems are visible, improvements are sustained, PDCA rhythm is established
“A popular misconception is that lean is suited only for manufacturing. Not true. Lean applies in every business and every process. It is not a tactic or a cost reduction program, but a way of thinking and acting for an entire organization.” – Lean Enterprise Institute
To understand how lean supply chain principles can enhance your lean manufacturing program, contact us.