Lesson Learned in Supply Chain Improvements

I haven’t given problem solving techniques much thought in writing about the challenges with Supply Chain. However having lunch with one of my colleagues, a certified Black Belt, we started an interesting discussion. My colleague asked me the question what gets me excited in my job. Since this is not usually a lunch topic, I really had to think about what gets me excited when it comes to my role working in Supply Chain. I started out answering the question in a typical generic fashion focusing on the supply chain roles and responsibilities that I have held through my career but then I began to think about a specific challenge.

As I began to discuss this problem, I thought about the basic concepts and critical elements which were used to effect change in the process. What was interesting was while using the Lean Manufacturing techniques ultimately using a simple approach resulted in yielding the results that were needed.
The challenge was how to improve the order cycle time through our entire supply chain by 2X and as a subset how to improve the order cycle time through the factory. We then formed a Lean Six Sigma team to analyze the problem and provide recommendations to improve the order cycle times. The Green Belt team utilized the various tools and techniques to develop the recommendations and the solutions. The team used FMEA, Cause & Effect, SIPOC, Process Mapping, RACI Diagram and Pareto Diagrams.

Using all or most of these techniques provided some excellent information of which areas in the supply chain which needed to be improved to effect a positive change. Although the team could have stopped and provided a general improvement plan, the facilitator and the team decided to continue on the journey of improving the order cycle times but had not realized the 2X improvement goal.
The team then started to meet every day and began charting open orders on a histogram with the number of days open and not shipped The team began to work the open orders and isolate on those orders open in the system for 20 to 30 days, still in WIP. Specifically through the ERP, shop floors system, the team could then identify those orders by order numbers, have all the relevant details of the order and the status of the order. From that list the team started to work 20 orders a day to determine the root cause, assign one team member to take the action to fix the problem and then report back. The team continued to work on the open order report and select the highest or longest open orders. The team used the Six Sigma tools mostly the Pareto Charts to determine the root causes for delays in the supply chain. After the first ninety days the team reported their findings back to the Green Belt Steering Committee and the Executive Management. The improvements were focused on forecast accuracy, component delivery, testing, factory scheduling, and unit repair. The materials and forecast improvements would represent better than 60% of the order cycle improvement. As a result of the Green Belt project, the expanded use of Vendor Managed Inventory solution and an improved inbound logistics was utilized on key components company wide.

In the first six months of the project with several process changes implemented, the team realized about 50% or half way to the goal. In order to reach the project goal, we expanded the team members as well as extended the teams to other factories. The teams continued to work the open order reports and continued to take the step by step approach on working the oldest orders and solving the issues on those orders. The Team reached their goal achieving a 2X improvement on order cycle time in the supply chain in 12 months.
The lessoned learned by Green Belt the team’s patience, persistence, and working the details yielded the results.

Simple but Difficult!