Earlier I talked about
what we called a Herbie Hunt. For those
of you who have never read The Goal, Herbie was an over-weight boy scout with
an overloaded backpack who controlled the pace of a boy scout’s overnight
hike. The troop finally figured out that
if they could reduce the weight of Herbie’s back pack, the troop could increase
the amount of distance covered on their hike.
This was how the authors of The
Goal, Eliyahu Goldratt and Jeff Cox, chose to introduce the concept of the
constraint. Let’s continue now with the
story-line of this plant’s transformation.
One of the first
constraint’s our team discovered was when it was time to mount the hardtop on
the chassis of a BMW Z3. Along the hardtop
mounting surface there were 48 control points that had to be within the
specification limits provided by BMW. To
our amazement, 36 of these points failed to conform to the specification
limits. Many of the points were above
the spec limits and could be repaired, but many times they were below the
limits and had to be scrapped. In fact,
approximately 20% of all of the tops fell into this category which caused deep
financial pain for our plant. I also
discovered that the hardtop was 4 months late going to market.
We formed a team of
hourly employees and our one, lone Engineer to solve this problem which turned
out to be an alignment issue within our bonding process. The team determined the root cause of the
mismatch in surfaces, implemented an SPC initiative and the scrap level fell to
almost zero which immediately improved our on-time delivery metric and the
customer’s perception of our quality, plus our profit levels. We celebrated this success with a pizza party
which brought our two competing camps of employees that I mentioned earlier
much closer together. In addition, the
morale of the work force as a whole jettisoned upward.
One of the problems I haven’t
mentioned much so far was the quality of materials being received from our
suppliers. I remember on at least two
occasions scrapping an entire batch of resin used in our hardtop molding
process. We also had supplier delivery
issues from the standpoint of on-time delivery.
Part of this was due to our inability to pay our bills on time and part
of it was due to the poor processes that some of our suppliers had. As some of you might have guessed, the
previous leadership, in an attempt to improve profitability, chose the lowest
cost suppliers which in some cases had the poorest quality and on-time delivery
rates.
One of our hourly
employees suggested that we have a Supplier Appreciation Day and invite all of
our suppliers into our plant. He
reasoned that if they could see how their products were used and talk about the
problems we were seeing with their products, there would be an immediate
improvement in both quality and on-time delivery. Another employee suggested that we pay all of
our bills within thirty days as an incentive for suppliers to improve their
delivery performance. Guess what……both
ideas worked!! Within a matter of weeks,
our supplier performance improved dramatically and because we were paying
within thirty days, we were able to negotiate significant early pay cost
reductions which also helped improve our bottom line.
Earlier, I mentioned that
when we subordinated the non-constraint processes to the newly identified system
constraint, our efficiencies took a significant negative hit. I remember our corporate office sending a
team down to our plant to determine the cause of our deterioration in
efficiencies. They came unannounced and just
sort of showed up at our front door. I
invited them into our conference room and they made a presentation
demonstrating on a run chart the sudden decrease in our efficiencies. I let them finish their presentation and
asked them if they had looked at any other performance metrics? Of course, they hadn’t! I had anticipated a visit from corporate at
some point because of our deterioration in efficiencies, so I had prepared a
brief presentation of my own for when they arrived.
TO BE CONTINUED
No comments:
Post a Comment