Warehouse

Lean Tools in Supply Chain Impact Bottom-line

The Client

A global home furniture manufacturer, distributor and retailer with more than 700 retail stores worldwide.

The Challenge Statement

In the furniture industry, there is a constant need for furniture repair as an internal and external service to customers. Processing despised inventory and product through the company’s Repair Shop in its Distribution Center was inefficient and costly. Limited cross-functional communication and escalation protocol impacted: the volume of product waiting for repair; employee morale and effectiveness; and the immense square footage dedicated to housing product in the queue for repair. Significant revenue was being lost as a result of organizational inefficiencies within the Distribution Center’s Repair Shop.

Objectives

  • Perform a three-day Kaizen Event that encompasses Lean principles and techniques to increase efficiencies, reduce costs and eliminate waste.
  • Build a model to illustrate the ideal processing of in-need-of-repair inventory; implement the new standard in all other corporate distribution center locations across the United States.

Intended Outcomes

Develop an internal delivery schedule to control and allocate rework/repair Work in Process (WIP). Dedicate tools and equipment for increased efficiency and capability. Standardize & streamlined workflow with visual cues for ease of product tracking and status. Build a capacity model that is supported by manpower & throughput analysis with appropriate financial balancing.

What Did the Team Achieve?

Through the Kaizen event, the Shop Area team took ownership of creating a functional rework and repair area that supports First In First Out (FIFO) prioritization for all furniture products. Lean principles such as 5S, Tiered Escalation, Heijunka (load leveling), Value Stream Maps, Spaghetti Diagrams, and Visual Cues, were developed and instituted throughout the rework and repair area. Tiered Escalation with Safety, Quality, Delivery, Employee & Cost (SQDEC) was instituted for effective unilateral and cross-functional team communication.

What Results Did the Solutions Yield?

Business Results

  • 53% Increase in Product Flow & Throughput
  • 88% Decrease in Processing Time
  • 350k Overall Cost Savings per Year
  • 32% Increase in Available Floor Space

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *