| Pneumatic Industrial Equipment OEM |
| 11/07/2007 - Success Stories |
Challenge - Develop Customer-based "Pull" System for 120 Unique Part number's; Implement in 4 weeks
Situation:
G & G performs machining and assembly work on over 120 different part number’s for a customer that makes specialty pneumatic devices. The customer requires approximately 70 unique shipments per month.
Varying processing methods, materials, and quantities had made account service an extreme challenge. G & G and the customer struggled to define optimal lot quantities, further complicating matters.
Forecasts were unreliable so G & G attempted to predict customer need based on historical analysis of order patterns in order to try and level the production schedule.
Long production runs ensued, tying up machines and leading to inventory shortages of the parts that the customer actually needed. Cost to service crept up and service levels dropped as G & G frequently tore down running jobs to set up new ones and spent extra time trying to verify actual inventories.
Solution:
G & G invested heavily in its operations management system in 2006 in order to accelerate Lean implementations in production, scheduling and order processing and better serve all of its customers. In this case, the customer’s parent company happened to be mandating “demand-driven” sourcing practices in order to achieve reduced inventory levels.
That enabled a quick agreement during the scheduled account review process to a mutually proposed make-to-order system based on smaller monthly batch sizes and lead times of four weeks or less.
Since the customer had already taken steps to initiate a “pull” ordering process with fax requests sent directly from its shop floor, G & G offered to synch its production, scheduling and order input processes to attempt a program launch in one month.
Results:
- G & G prepared for and achieved a successful program launch on time
- G & G provides almost 100% make-to-order production
- G & G can deliver any part the customer needs in 4 weeks or less
- 98% On-time Delivery
- 99% Quality Rating
- Overall supplier rating of 99%
- Two-bin kanban system used at customer
System inventory limited to the two kanban bins – one on the shelf and one on the customer’s assembly line
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