I recently worked with a company that decided to improve organization in its shipping department. At first glance, there was a need for more signs, labels and lines on the floor to indicate where specific items belonged (and which items did not belong at all). This alone would have been helpful in improving shipping productivity. However, the team assigned to the task soon realized that poor product flow, both into and within the department, was the real problem. The team decided that a complete rearrangement of the department was needed, including workbenches, equipment, racks, cabinets and staging areas. The team was flexible enough to realize that although a minor organization effort was needed, a major reorganization was essential. The change in the layout improved product flow significantly.
At a custom printing facility, a team was assigned to improve throughput in the printing department, which consisted of five highly automated printing lines. As the team began its task, it soon realized that the printing process was very effective at completing jobs it received. In fact, in most cases, the printing job was completed within a day of receipt. Therefore, the team shifted gears and began to look at the pre-printing processes. It soon found that this was where major order delays consumed most of an order’s lead time. Flexibility allowed the company to refocus on the right area and make meaningful improvements.
Another company was very concerned about inventory accuracy, especially in the finished-goods area. A team looked for ways to improve the accuracy of this inventory and planned to introduce a cycle-counting program. Interestingly enough, this company was also highly committed to the lean manufacturing philosophy and had made great strides in reducing the time it took to produce a product from start to finish.
The more the company looked at this finished-goods accuracy issue, the more it realized that the real solution was to eliminate finished-goods inventory altogether. With newly reduced lead times, the company could make products to specific orders and ship them to customers faster than its competitors. So, instead of instituting a time-consuming cycle-counting program, this company demonstrated its flexibility by eliminating most of the finished-goods inventory within 6 months and almost all of it within a year. This company changed its focus and found ways to not only save money, but also to improve customer service.
A final example of flexibility comes from a company in the automotive industry. This company remanufactures audio equipment used by automotive dealers. Obviously, it uses many different types of electronic components for a wide variety of audio systems.
As part of the repair process, each technician would receive an order and go into the component storage area to retrieve what was needed for that order. Technicians constantly complained about how difficult it was to find the right components, all of which had extremely long identification numbers and often looked very much alike.
A team was established to improve the organization of the component storage area to make it easier to find needed components. However, after a short time, the team realized that it needed a change in thinking. Instead of wasting time looking for parts in the storage area, highly skilled technicians needed to spend more time on value-added activities such as the actual repair of the audio units.
Component usage was reviewed, and it turned out that Pareto’s “80/20” rule applied. More than 80 percent of the demand came from less than 20 percent of the components. The technician’s workbenches were rearranged, and the most frequently used parts were placed within easy reach. These point-of-use stored components could be checked and replenished as needed, and the other parts were prepared and delivered by stockroom personnel to the technicians in advance. As a result, the technicians were able to increase their daily output by almost 30 percent.
These companies demonstrated a great deal of flexibility in making the “right” changes in their operations. We can all learn from their experiences as we manage and execute our own continuous-improvement efforts.