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How Lean Six Sigma Production Practices Improved On - Time Delivery by 29%

Situation

Our customer was a large manufacturer of iron water works and plumbing products. However, their manufacturing processes were in disarray. They were running below efficiency and, worse than that, broken communication systems were causing an on-time delivery rate of only 70 percent, with some customers having to wait six months or more. The company came to MetaExpert, when they were hemorrhaging customers and not sure what to do. They knew they needed to fix things, but didn’t know where to start.

Actions

  1. Fixing their MRP and ERP systems, which were not accurately reporting inventory.
  2. Adding bi-weekly cycle counts, using existing personnel.
  3. Training staff on how to properly use the MRP and ERP systems. Many personnel did not know how to properly read them, aggravating the inventory reporting issues.
  4. Improving communication between different parts of the plant.
  5. Applying Lean Six Sigma production practices with the goal of improving production without hiring additional personnel.
  6. Creating new standard operating procedures.

Results

  • Went from 70 percent on-time delivery to 99 percent, eliminating almost all delays not caused by vendors. This was primarily achieved by a combination of increased efficiency and more accurate inventory reporting.
  • Improved units per hour from seven to between 12 and 14. The original goal was 10 per hour.
  • Increased customer retention by improving on-time delivery rates.
  • Developed protocols to ensure that delivery promises were honest, further improving delivery rates. For example, salesmen were sometimes promising two-week delivery on items which required at least that long to get parts from the vendor.
  • Improved process routes to ensure communication between departments.

Return on Investment

The company was at 80 percent of its required KPI of 10 units per hour and achieved 134 percent with no additional costs other than the payment to MetaExpert.

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