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Improving Customer Lead Times
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Once your plant is redesigned using a cellular layout, your lead times will drop. This happens because we have eliminated numerous move and queue times associated with interdepartmental transfers of mate­rial. This in turn allows your cells to take a smaller portion of available space than was previously used by the departmental layout. You have now freed up manufacturing space for future growth and expansion.

To operate in the new smaller square footage, work in process should drop. Now that lead times have been reduced, your work in process will drop accordingly. This is quite simple to explain. In our test case, com­ponent part lead time prior to cellular manufacturing was reported as 40 days from raw material introduction to component part inventory. As confidence grows in the new layout, lead times are dropped accordingly. Again in the test case lead times were dropped immediately to 30 days, then to 25, 20, 15, and finally 13 within a 12-month period. What re­sulted were drops in work in process levels of 67 percent.

In the test case, an electronic kanban system was used for replace­ment of component part inventory. This logic is no more than the old reorder point system. In other words, if lead time for replacement parts is 40 days, you must have a minimum of 40 days' inventory. Likewise, if lead time is 13 days, only a 13-day supply is required when the re­plenishment signal goes out If you report to any MRP system that lead time is 40 days, you will have 40 days' worth of work in process on the floor. Therefore, lead time is directly linked to the amount of invento­ries both in stores and on the manufacturing floor. Other gains associ­ated with drop of inventories include carrying costs, exposure to obso­lescence, customer order responsiveness, space required to operate, and increased ease of visibility management.


Earlier a reference was made to finger pointing. Some of you may remember Ollie Wight saying that the manufacturing coat of arms was a man standing with arms crossed in front of himself with fingers point­ing in opposite directions. Simply put, there was little accountability. A finished component part with a quality problem can be blamed on the proceeding operation in many cases. "If they hadn't done this or if they had only done that, then I would have been able to do this." In a cellu­lar layout by part type, there is nowhere else to point the finger. Since the total fabrication is performed in one cell by the same cell members, they are accountable.

There are many forms of quality-at-the-source practices. At our test plant, a very simple form of SPC was incorporated. Simple tools and fixtures and measuring devices were incorporated into the process, mak­ing the cell members accountable for their own quality. Simple charts were recorded showing frequency of quality checks made as well as explanations of any defect found or machine modifications required to correct the process.


When all this activity started at our test plant, they were manufacturing 500 unique end items requiring 13,500 component parts. At the end of the test period, they were manufacturing 650 end items requiring 4,500 component parts. Several activities went into accomplishing this. The first easy step was to break all parts into commodity codes (required for cell development anyway). All part families or commodities were listed by basic dimensions. Each time there appeared to be a match, engineering was asked to evaluate to see if they could be combined into one part with either no or minor modification. For example, two rails that have the same dimensions may have different bore patterns. The question was asked, could both bore patterns be done at the same time on one part? In assembly, only one set of bore patterns would be used, depending on the final product.

In some cases, duplicate parts were found, a leftover from engi­neering when little formal data existed pertaining to older product in the line. In other cases examples of overengineering were discovered. In this case, a simple corner interior brace block had a population of 750 unique parts. By studying the fit and structure differences, the popu­lation was condensed into 37 standard brace blocks with no effect on product quality or function.

Front rails for sofas were always constructed exactly to the design­ers' specs without question. This resulted in hundreds of front rails being produced with graduations as small as 1/16 inch in both length and width. As the standardization program got underway, the sample department would question design. Typically when design realized there was already in existence a part 1/16 inch different than that designed, a modification was made to the design to conform to the existing part. Likewise, if a design called for a 6-inch-wide front rail, we began to substitute with two 3-inch rails. A 7-inch design would be interpreted into two 3-inch rails with a 1 -inch gap in between. Never was the qual­ity or functionality of a product compromised.

Because of the efforts of standardization, with emphasis on the best-selling designs, new opportunities for cellular manufacturing arise. Because of standardization, for the first time a cell was created at our test plant that incorporated all machining and assembly of finished prod­uct with a total lead time of one day.


With the objective of reducing lead times as much as possible, many process improvements can be made. Without the objective of lead time reduction, there can be many confusing objectives without a common thread. This usually results in poor achievement scores on many objec­tives. To accomplish one major objective—lead time reduction—all other areas will and must be addressed, but by a united work force working toward one common goal.


There is no end to the improvement cycle. Our test plant has been successful in reducing lead time from 45 days to 1 day on 40 percent of their product line, while 70 percent reductions were posted for the re­maining products. The goal is all product in one day, and then all prod­uct in four hours, and so on.


The test plant we have been discussing uses a very powerful tool to help achieve their goals. This tool is kaizen. Kaizen events are used more and more frequently by the test facility with continuous gains being made consistently. Many of the remaining parts cells have had lead time reductions from 13 days to 7, 6, even 4 days.


If you don't know about kaizen yet, then get going. It will make your transition more easily accomplished and more widely embraced by your work force. Whatever the tools you incorporate, remember, lead time reduction is the catalyst for world-class results.


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