Problems:
This producer of military hardware was experiencing production problems. Costs were too high. Delivery performance was not at acceptable levels. They were experiencing severe scheduling difficulties. Quality was being “inspected in.”
Lean Solutions:
The initial meeting with the management team was spent identifying some of the real root cause issues. It soon became apparent that much of the scheduling difficulties were self imposed. While their contracts were eighteen months in length, with fixed linear delivery requirements, their lot sizing rules were causing extremely lumpy production schedules. The solution was to eliminate the constraints that kept them from producing at the same rate as the delivery requirements. Some of the constraints were kitting of electronic components. Others were related to set-up costs. Most, however, were caused simply by past practice; “we always build these in lots of 100.” An education overview of lean philosophy and techniques got the process started. Point of use stocking of components, and SMED techniques quickly allowed us to “build to rate.” Once this was accomplished, kanban signals replaced subassembly work orders, significantly reducing complexity and cost. This dramatic reduction of work in process inventory reduced the amount of scrap and rework proportionally. Introduction of sequential inspection caught defects almost immediately and substantially improved the ability to define true root causes. Failsafe devices (See Error & Mistake-Proofing) were then introduced, where applicable, to eliminate such.
Impact/Results:
Within a few months:
- lead times were cut by 80%
- On-time delivery reached and remained at 100%
- Shop floor space was cut in half
- Yields doubled
- The complex MRP based production scheduling was replaced by simple pull signal kanban controls
- And overall productivity increased by more than 20%