Custom Manufacturing companies, which design a product, manufacture and deliver it to an order, have one of the most complex operations’ environments.
Sharing of design and manufacturing resources across multiple projects/orders coupled with changing product mixes, pose a significant challenge in resource management and delivery execution. These organizations suffer from time to time starvation of manufacturing facilities despite having a good order book. The pressure to keep manufacturing facilities utilized, force them to change priorities, which in turn leads to de-synchronization. There is always pressure to add resources, despite having low overall utilization numbers. Frequent expediting, high overtime expenses and order delays are almost a norm.
Organizations have tried many approaches to deal with the problems like standardization, dedicating manufacturing facilities, implementing ERP, advanced production schedulers, lean techniques, 6-sigma and so on. While there have been local gains from such initiatives, but the overall delivery performance and lead time has remained stagnant for most organizations. This is because most solutions have not addressed the core challenge in this environment, which is to ensure very rapid flow of orders through the manufacturing shops without wasting the manufacturing capacities.
Our analysis of operations of such environments validates significant wastages of resource capacity and time. Out of the total lead time of projects/orders in manufacturing, the actual touch time is less than 10% of the overall lead time. While many orders are delayed in the shop floor, there are also some components or orders, which are made much in advance, waiting as high work-in-progress inventory or even finished goods inventory. The significant part of the lead time is avoidable wastages, which can be plugged by effective order flow management in engineering and shop floor.
Vector Consulting has assisted organizations in this domain achieve exceptional operational performance by using Theory of Constraints solution for Operations (Drum-Buffer-Rope) and Project Environment (Critical Chain Project Management). VCG has also helped organizations build a decisive competitive edge using the operational excellence to get lucrative sales deals.
Increase on-time delivery performance to more than 95% as per the originally committed dates while reducing the overall lead time (and work in progress) by around 30% to 50%
Increase the output of plants by around 25% to 40%
Drastic reduction of expediting costs like overtime and emergency freights Increased sales from delivery sensitive customer segments