Explic8 Consultants Work with Electronics Company to Eliminate WIP and Hit 100% OTIF

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

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 lean toolkit

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

  1. Factory redesign
  2. Lean tools and techniques from VSM to cellular design
  3. Work balancing and competency and skills matching
  4. Single piece flow and Kanban concepts
  5. Meaningful, accurate and timely KPIs at point of use
  6. Visual Factory

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