Foundry Industry
Issue:
A major customer was demanding shorter lead times. The lead times were wreaking havoc with the schedule and beginning to cause delivery problems for other customers.
Scope:
Develop a visual method to control and schedule the targeted parts without increasing the value of the finished goods inventory. Get on time delivery for those parts into the 98%+ range.
Approach:
A team was pulled together to examine the current process for scheduling the parts. The bottle neck operation was one step removed from finished goods which is why finished goods inventory was struggling. The team determined to place a kanban (controlled inventory) of parts between the bottleneck and the finishing operation. This would hold down the cost of the inventory while ensuring that the finishing step always had material to complete for the customer. Optima’s kanban sizing tool was used to determine the quantity of parts and the space required. The tool is able to predict outages through the use of historical and forecast data. Once the sizing was known a physical layout was developed along with an implementation plan for rolling the process out.
Results:
After two (2) weeks the kanban was established and lead times began to improve. After four (4) weeks on time delivery was over 98% and the inventory value was down approximately 7%. Parts are scheduled via the kanban vs. forecast which allows the bottle neck operation the opportunity to run with less interruption.