Streamlining the Shipping / Accounting Process

Lean Shipping Process

This company manufactured products for the construction industry and distributed highly engineered components produced by other companies.  Manufacturing and Distribution were separate businesses, which came together at Shipping.

This project was driven by the company’s CFO, who felt that shipping processes, which had never been looked at, were wasteful.  As you will see below, he was correct

Lean Six Sigma Tools

Performance Scorecards
Process Flow Mapping

Details

1) We kicked off our project by developing the Shipping Department’s Scorecard. Download Shipping PFM Actions and Savings

2) Then we used Process Flow Mapping to identify Non Value Added steps.  (I chose not to show you another Process Flow Map picture and focus on the items we identified that should be eliminated from the process.)

3) The Action Plan Tab the Non-Value-Added steps and our ideas for eliminating them.

4) I want to point out one specific Non-Value-Added step that we identified.  It is relatively small, but it shows the power of mapping.  The last entry on the “Quantify Savings” tab is a Shipping Admin taking data from one report and creating a new spreadsheet for the CFO to use for analysis.  We asked the CFO if he needed this data and he didn’t know about it.  The spreadsheet was used by the prior CFO, who left 2 years ago!  For 2 years this Admin was doing 20 minutes a day of work and it was going into a “black-hole”.  The day we discovered this, we stopped doing it.

5) Every Non-Value-Added step that we could eliminate was quantified, so we could realize actual labor savings from this project.

6) The “Savings Summary” shows how the total labor savings.

Results

This project yielded great results.  We saved over 4500 hours per year in labor!  These reductions were made through attrition.  Since this company was impacted by the Great Recession of 2007 – 2009, it helped being able to reduce labor by actually eliminating work and not just laying off people