This is the first part in a multi-part series about on-time delivery. If you are familiar with manufacturing (light machining and assembly), all the topics in this post will seem quite mundane. But they deserve to be mentioned because ordinary problems with ordinary solutions can still be part of the chaos even when there are some special causes. Part II describes the inventory chaos resulting from using visual control systems inconsistently across overlapping processes. Part III describes how lack of work leveling leads to inconsistent responsibilities and lack of accountability. Part IV describes how an emphasis on metrics rather than fundamental customer relationships, and on immediate results rather than process capability, skewed efforts to improve.
I spent a significant amount of time trying to help one company improve its on-time delivery. My primary responsibility was to identify causes for late deliveries. Some of the causes were pretty straightforward:
- Inventory inaccuracy resulting in component shortage
- Quality non-conformance requires rework or scrapping part
- Traffic jams in production processes
- Supplier late delivering to factory
Since the nature of these problems was pretty ordinary, possible improvements are also not hard to imagine. Inventory accuracy could be greatly improved by locking up inventory and restricting access to authorized personnel who are trained and held accountable to always update the system on how much inventory was released and for what purpose. Although there was a fairly limited number of people who were “usually” responsible for transferring inventory from storage to point of use, there was quite a large set of people who might do it to help out – on second or third shift, when many assembly lines all needed replenishment at the same time, or for any number of other real or imagined reasons. Consequences of restricting access might include delaying some assembly lines if the demand for parts at a given point in time were too great for the authorized staff to handle, or paying authorized staff to stand around and do nothing during periods when demand for materials were lower than peak.
There were also a surprising number of cases where inventory accuracy was hampered by material packaging and presentation deficiencies: pieces dumped in bulk into plastic bags with no clear indication of count, or a count indicated but no corresponding weight with which to check the count. Some parts were packed in bulk even though they were highly prone to hooking and catching on one another, making it quite easy to take more than needed and drop some during handling. More often than not, it was difficult or impossible to tell how many parts were supposed to be in a container at any point in time. Imposing packaging requirements would likely result in an increased component cost.
Quality issues for parts produced in house were, like most quality issues, the result of process variation. Contributing causes might include the condition of the tools or fixtures, contamination of fluids, or unfinished components not to specification. Standard practices for quality control were known and discussed, but the recurrence of issues is a telling indication that corrective actions did not reach to actual root causes. Symptoms of not addressing the root cause include if the corrective action involves rebuking an individual, increasing manual inspections with the addition or alteration of inspection methods or tools, or other changes which would cause the process to take longer and must be done by the worker (not automated equipment) without any change to the way the worker’s performance is measured or evaluated by their immediate supervisor. In other words, instructing the worker to get the same amount of production but follow steps that take longer to do.
Traffic jams occur when the cascading effect of a problem affects later jobs which themselves have no problem, but are started late and finish late due to the problems on other jobs.
Supplier issues, whether late delivery or poor quality, generally have the same types of causes and possible solutions. Much as with internal employees, the main thing that matters in the long run is how suppliers are held accountable. Informing suppliers that you are displeased will have little result if there are not increasing consequences, starting with charges for nonconforming material and ending with discontinuation of the business. Dropping a supplier for quality or on time delivery issues can result in higher costs for buying from higher performing suppliers.