December 10, 2015 / best practices, continuous improvement, customer delivery, lean manufacturing, optimization, productivity, strategic planning, supply chain, workflow process
With the rise of online retail giant Amazon, nearly anything—from batteries to furniture (and more)—can be delivered to front doors across America within the same day of ordering. With free two-day shipping and even the introduction of drone deliveries, consumers are increasingly becoming used to clicking and receiving.
In fact, there’s a name for this focus on responsiveness. It’s called the “Amazon Effect,” and according to manufacturing consultant Lisa Anderson, this mentality is creeping its way into manufacturing. For example, one of her clients, a building product manufacturer, ships out a product within 24 hours as a worse case scenario, while another ships within two days.
Industrial metal-cutting companies and fabricators are no exception to this trend. Customers are now expecting orders to be completed in half the time they were just 5 years ago. Like all manufacturers, today‘s fabricators are faced with doing more (increased demand) with less (efficient resource allocation) as quickly as possible.
As reported in the LENOX Institute of Technology white paper, The Top 5 Operating Challenges Facing Fabricators’ Metal Cutting Operations, customer service and delivery continue to be a top challenge for fabricators as they attempt to balance quality with speed. Forecasts and schedules can help fabricators estimate delivery times, but when it comes to improving response time, the proof is usually in the process.
To get orders out the door faster, managers need to take the time to evaluate their processes and observe where and how product travels on the shop floor. A recent article from manufacturing.net provides four key areas fabricators should focus on:
- Rethink the manufacturing footprint. While ordering raw materials offshore helps save costs, it can extend lead times from 30 days to more than 180 days. To deliver faster, consider bringing operations back stateside. Talent can be recruited with new facilities or by relocating operations to maintain a competitive advantage.
- The right product for the right customer. To ensure you have the right product for the right customer at the right price, fabricators need to reduce complexity in their operations. Start by cleaning inventory and assessing SKUs to determine which ones should stay in the portfolio. Then, work with customers and stakeholders to assess the impact of new launches and discontinued products. Tracking customer schedules, including exceptions to lead time, order minimums and costs will help provide customer profitability. Equipped with knowing which customers and products create the most value, fabricating operations can then reduce the number of suppliers to better manage materials flow and delivery.
- Improve material flow and inventory accuracy. Simplify operations and reduce inventory to shorten lead times. Keep inventory organized so it’s easy to find when needed and easy to see when it’s time to reorder.
- Continuously improve. Lean manufacturing and an efficient process is the foundation of improving response time. Simplifying production from supply chain to delivery all adds up to shorter lead times.
Out of the four strategies offered in the article, the last strategy is probably the most important. While continuous improvement has long been touted as a best practice, it shouldn’t be overlooked. It takes time to constantly improve, but lean tools and other improvements strategies are almost always worth the effort. According to an article from Industry Week, one manufacturer cut lead-time in half—from 10.5 days down to 5 days—by taking the time to conduct a value stream map exercise. Specifically, the team mapped out each area of operations and was able to optimize production from receiving to shipping.
In a hectic fabricating environment, it’s easy to push product through and forget about the process. However, with today’s on-demand mentality, manufacturers can’t afford to miss any opportunity to improve response time. By evaluating and rethinking some of the key areas of their operation, fabricators can optimize their processes and, in turn, better meet the demands of their customers.
When was the last time you re-evaluated your fabrication processes?