Participated in a complete change in a production operation to Cellular
Manufacturing. Gave hundreds of tours of the facility an encouraged
discussions with hourly work force. It's of interest to see their
perspective of why the Cellular Manufacturing was much better than the
previous MRP driven system. Benefits were very significant, including a
substantial increase in product quality and decrease of work in progress.
Outsourced a number of raw material supplies to in-house vendors and
watched while they managed inventory of their products far better than we
had, often decreasing total amounts by 80%!
The production workers relayed to the visitors how frustrating it was to
find with the previous MRP system a $5000 item being assembled was missing
the proper bolt! With Cellular Manufacturing a representative from a
hardware supply company kept all fastener bins at each cell filled with
several days needs. Instead of having thousands of fasteners we didn't
need in stock (because the sales force didn't forecast the future) we had
much less of only the correct inventory.
After switching to cellular manufacturing I gave many tours to executives from local and industries considering coming to town. My boss, the CEO, would join and was always great about listening to the hourly workers discuss the benefits. However one area where he couldn't help himself was when I would stop at our newly added company supplying all our brass and copper raw materials. They had a caged area where they installed inventory they owned. Our CEO was so proud we reduced our inventory cost over 90%! Since I had conducted many tours when we used the MPR system I appreciated that the total reduction in brass and copper raw inventory between both companieswas problem over 80%! I'll explain:
We made many brass and copper parts for gas apparatus and MIG, TIG and Plasma torches etc. We had several hundred CNC and other dedicated machine tools. I would see racks of the same size brass/copper bar stock, usually 20 feet long duplicated at many stations. The managers in each area wanted to be sure they didn't run out, especially on 2nd and 3rd shift. Could not be sure what the mainframe computer that crunched data each night for the complex MPR system for the over 125,000 finished part numbers so they stocked extra would say to make! Our brass/copper supplier had a large warehouse 2 hours away from the plant. Their one person responsible for keeping sufficient stock at the work stations only needed one days reserve! He also knew extra was not needed at each work station! He placed his order on the warehouse at the end of each day and it arrived in the morning! Unlike the MRP system that relied on a sales forecast (which was always wrong!)
The same situation occurred with a number of other vendors that set up their "just in time" inventory based on real not predicted demand! Our CEO had used an MRP system when general manager in another business. He said it best, "Ollie White set US manufacturing back 10 years!"
One of our Swedish plants had operated their facility on a two bin system without the need for a computer crunching forecast demand, finding bottlenecks and defining the next days production!
With our large complex product line demand forecast was often off by 50%! In fact I had insisted the plant install some assemble to order stations when I moved to the facility with our CEO when the business was purchased from Linde! I had visited a small TIG torch manufacturer who stocked the many torch bodies based on what fit in a 25 gallon drum. He also stocked 12 1/2, 25 and 50 foot leads and assembled what was needed for an order! We were trying to stock all torch variants in each length based on a forecast! We had plenty of assembled torches in stock but always the wrong ones!
As the marketing group responsible for forecasting (with the sales force) we had the same issue with oxygen, acetylene regulators, gas torches, tips and nozzles and combined product outfits for gas apparatus. We had lots in inventory but always in the wrong package! That assemble to order area was an easy for the plant to arrange and the two gals who manned it were always on my plant tour stop! They could package what was needed from product stock and boxes in bins at their station! For high demand item numbers they soon learned what was logical to make for stock between filling orders! Logic not an inaccurate finished goods forecast was what was needed!