Problem:
The incoming warehouse is holding over $3,000,000 of raw materials. The warehouse consumes over 3,000 square feet of floor space. Three full time material stagers unload, store and deliver the materials to assembly lines as needed.
Mission:
Eliminate the need for a warehouse within four months
Work with suppliers to design and implement a point of use Kanban Pull System.
Decrease the days supply of inventory from 50 to 4.
Reduce the raw materials warehouse floor space from 3,000 square feet to zero.
Eliminate the need for the three stagers (Reinvest them into value added jobs).
Approach:
Charter a raw materials replenishment team.
Provide Kanban Pull System Training.
Calculate demand for each item number and establish standard Kanban quantities and containers.
Set up Kanban Inventory Locations at the point of use on each assembly line.
Set up blanket orders for each item number with suppliers.
Right-size the inventory level for each item by allowing the assembly lines to pull excess materials down to the new maximum inventory level.
Begin replenishing to point of use using the new Kanban Pull System.
Shut down incoming warehouse.
Reinvest three stagers into value added positions.
Present results to the management team.
Lean Techniques Taught and Utilized:
Flow (Lean) Manufacturing
Kanban Pull Replenishment System
5-S Workplace Organization
Visual Factory
Results Realized:
3000 square foot of floor space became available for value added activities.
Improved On Time Delivery to the assembly lines.
Reduced material carrying costs.
Reduced indirect labor costs.