Technology enables the organization to improve performance by providing the information needed to execute a process.
An operations support intervention in a Quebec manufacturing company allowed us to become familiar with the WX order (a fictitious name to keep the company anonymous).
This order was necessary for the company's monthly sales, and everyone was talking about it. So naturally, we were curious about the rush of this order. The company had everything it needed to assemble the finished goods: the components were off-site for special treatment, and the ERP system indicated that the material was available (2000 bolts in stock).
The bolts were missing when preparing the kits to assemble the final product. The requirement was 24 bolts per assembly, and the system indicated 2000 units. Therefore, no purchase suggestions were triggered. Five days left before the WX order was scheduled to ship, and the lead time for receiving the new bolts was 15 business days.
Although necessary, the situation did not seem to surprise anyone.
All orders that use these bolts are always late; we always ship late. Said an employee
According to former employees, these bolts were special and ordered only on demand. So, unless there was a transaction error, there was no reason to keep them in stock.
Measure: by extracting the product where these bolts were used. And looking at the transaction history, they had never deducted them from inventory since they started using the new ERP system. So the assembly method was correct according to the methods department.
Analysis: a misunderstanding and lack of communication were at the root of this; they were saying, "the system automatically processes the hardware as well as the consumables," which led them to close the work orders thinking the system was making the deduction.
But the negative effect on the process was that every time they needed those bolts, a new order was sent to the supplier, the receipt was made, and they physically used them to assemble the product and close the work orders. So the same thing happened again and again. So as a result, the products that used these bolts were constantly behind schedule.
Several other products had the same problem. Consequently, a discussion was opened between the inventory management and the methods department.
Result: the methods and inventory management team selected and piloted new standardization measures. As a result, an optimal solution was implemented on this basis.
Benefits: many people were receptive to the solution. Although the approach allowed for rigor, people felt much more in a proactive mode than reactive. In addition, this solution allowed the company to improve the delivery dates of the products concerned.