This Newsletter will case study Phase 3 of the improvements made to our custom cabinet and millwork manufacturing client. The prior few months we profiled the improvements they made in their business, via Performance Measurement and On-Target™ Sales Strategy. This month we will review the improvements they’ve made in Operations.
They produce custom cabinets and millwork for general contractors who build new office buildings, residences, restaurants, banks, etc. Their products include simple cabinets, complex cabinets (wall units, reception desks), wall panels and trim molding. Like many suppliers to the construction trade, they were usually late in delivering products to construction sites. Since many other suppliers are also late, the industry has come to expect poor performance.
They wanted to become the most reliable choice in their region.
Lean Six Sigma Tools
Flow Layout / 5S Visual Management
Flow Scheduling & Daily Work-Flow Meeting
Implementation Details – Flow Layout / 5S
1) The production floor was arranged haphazardly with a senior production person leading each job as it was produced at various machines around the wood-shop.
2) We changed this, arranging all equipment in a Flow-Line Layout. All of the equipment to complete each product line and was put in one of the 4 flow lines.
3) A CNC (computer-numerically-controlled) router that fed all of the lines was put at the front of the Flow-Lines. Material that fed the CNC router was placed directly next to the machine.
4) We utilized 5S visual management so all materials, tools and information was visually organized. This cut down on the time production people took to find what they needed. The biggest improvement here came from the organization of raw materials, which in this case were numerous types of sheet and board stock. If your raw materials aren’t well organized, it is hard to be productive.
Implementation Details – Daily Scheduling Meeting
1) One of the most effective tools anyone can use to improve on-time delivery, in a complex multi-step operational process is the use of Daily or Weekly “Work-Flow” meetings.
2) These meetings track the progress of customer-orders through the “operational” process. (In future months I will highlight how this tool was used by a large Public Accounting firm)
3) The General Manager, Master Scheduler and Department Managers must be present in these meetings.
4) Our custom manufacturing client used this to track work orders from order entry, purchasing, engineering and the different production departments. This daily visual review by all key personnel of their orders, with a highlight on the expected delivery date, kept things moving. This is the definition of Flow… to keep things moving. If an order got “stuck” in one department, it was highlighted and investigated.
5) We found cases where an order was “stuck” in purchasing. In this case, we would call up the supplier and expedite these materials or go to other suppliers.
Impact on People
1) All of our projects with this company were about creating visibility. The first, described in December, was visibility of performance. The second, described in January – March, was visibility in Sales. This last project was about the visibility of orders moving through the production process.
2) Some people thrive in a highly visible, high expectation environment and others don’t.
3) By this time the people that could not succeed moved on and we were left with Sales, Administrative and Production people that were used to being aware and accountable.
On time delivery improved from 30% to 90%! This is unprecedented in the construction trades. However, it was not immediate. This improvement was gradual and took almost one year to hit 90%. They are still striving to improve and increase delivery to 98%+.
We hope this Real World Lean Six Sigma case study gives you ideas to achieve Operational Excellence. Next month we will turn back to Sales and how to improve Sales Productivity via a Lean Sales Process.