Business Basics
Home Page


Who is Bill Gaw?
And why should we
listen to him?

 


lean manufacturing principles and techniques training

A training program that gains employee understanding and commitment
Lean Manufacturing Training Program

If you want to get to the top of the latter, forward this Web page to your CEO/HR
Mfg. Mgmt. Development Program

Shop Floor Control - Part 3 of 5

Part 1  Part 2   Part 3  Part 4  Part 5



Get Bill Gaw's Lean Manufacturing Book
$15.00 Click Here

 Book: "Back to Basics"

 


privacy policy

987

760-945-5596

Other Training Options:

Lean Sigma Assessment

Lean Six Sigma Implementation

Lean Six Sigma, Certification Program

Lean Six Sigma Forum

Lean Manufacturing Basics

Lean Manufacturing Assessment

Lean Manufacturing Transformation Training

Shop Floor Control

Lean Manufacturing Principles and Techniques

Lean Manufacturing Simulation Game

Lean Manufacturing Certification Program

Lean Manufacturing
Seminars

Kaizen Management Training

Lean Manufacturing Problems and Solutions

Lean Manufacturing Seminar-in-a-Box

Supply Chain Management Training Program

Strategic Planning Training Program

Thinking-Outside-the- Box Workshop

Lean Management PowerPoint Training Modules

Lean Manufacturing
Articles

Lean Manufacturing
Consulting

 

ABC ANALYSIS

 

First and foremost, an ABC analysis is needed for all inventory categories.

 

Recommendations

All levels of the bill of material (that is, all part num­bers) must be classified as an A, B, or C item. This is done by multiplying the projected annual volume (or past usage) by the standard cost. This list is then sorted by dollar volume. A typical breakdown would be:

Class         $ Volume        No. of Units

A items              80%                         20%

B items              15%                         30%

C items                5%                         50%

For example: "A" items are 80 percent of the dollar volume and typically 20 percent of the part numbers. These ABC classifications are used to develop a

      Lot-sizing strategy

      Customer service strategy

      Safety stock (inventory strategy) at all levels

      Purchasing strategy at all levels

      Manufacturing, launch, and mix strategy.

These strategies provide the basis for business rules.

CUSTOMER SERVICE LEVEL BUSINESS RULES

 

More plants do not have well-developed business rules for customer service. Without rules, sales expects every­thing to be always available. Customer service expecta­tions must be clearly defined. An example of business rules follow: A items:

      A items will be shipped same day—95% of time

      A items not in stock will be shipped in 5 working
days

B items:

      B items will be shipped same day—80% of time

      B items not in stock will be shipped in 10 working
days

C items:

      C items will be shipped same day—70% of time

      C items not in stock—will quote delivery

Continued

Part 1  Part 2   Part 3  Part 4  Part 5


Bill Gaw's Lean Manufacturing & Six Sigma Bulletin (LMSSB)

To stay current on Lean Manufacturing and Six Sigma knowledge and implementation know-how, subscribe to Bill Gaw's Lean Manufacturing Six Sigma Bulletin and you'll receive his weekly solutions to the reasons why 80% of lean initiatives fail to meet expectations. And as a bonus we'll send you a download copy of our eBook, "Thinking-Outside-the-Box.". (All at no cost of course.).

 Simply fill in your first name and email address and click on the bar below:

        Your personal information will never be disclosed to any third party.

First Name:
Your E-Mail:

Here's what one of our 15,000 plus subscribers wrote about the LMSS Bulletin:

"Great manufacturing articles. Thanks for the insights. I often share portions of your articles with my staff and they too enjoy them and fine aspects where they can integrate points into their individual areas of responsibilities. Thanks again."

               Kerry B. Stephenson. President. KALCO Lighting, LLC


Knowledge and implementation know-how you'll not find in the
books at Amazon.com... neither in the APICS Package 
nor the Harvard Business School Press.  

Business Basics, LLC
6003 Dassia Way, Oceanside, CA 92056
West Coast: 760-945-5596 

© 2000-2013 Business Basics, LLC