Impact
- Improvement in On-time-in-full (OTIF): 87%
- Reduction in customer order-delivery turnaround time (TAT): 40%
- Improvement in financial savings: INR 26 million (annualized in terms of more business and decrease in penalty caused by late deliveries and interest savings)
The Client
The client is a manufacturing company that delivers products to the US and Europe-based warehouses.
The Current Scenario
In the supply chain, OTIF and low TAT are the hallmarks of successful delivery performance. However, the client encountered low levels of OTIF and high TAT to deliver the orders to customer warehouses based in the US and Europe.
Their OTIF level was 65%, and they wanted to reduce the order-to-delivery TAT by 30%
The client did not have a detailed VSM for their order to delivery process. They had limited visibility on the key wastes at each step. They had to improve the transparency and remove key wastes at every step of the process to deliver the orders quickly and in full quantity on scheduled dates to the warehouses.
The Solution
To ensure a dramatic improvement in OTIF and TAT, the TQMI team followed a scientific approach as follows -
Create the VSM
To understand the root cause of the low levels of OTIF and high TAT, the TQMI team of expert consultants created an as-is value stream map with data on timing and batch.
The team broke the VSM into five smaller and more detailed VSMs as follows:
- Order receipt to acceptance
- Order acceptance to manufacturing
- Schedule allocations
- Finished goods transported to the plant gate out
- Goods transported to the plant gate out
Identify and fix the key wastes
Once the detailed VSMs were created, the team could clearly identify the key wastes in each process step. For example, the key waste they identified in the first step was a lack of clarity on the model and product quantities to be shipped to the warehouses. Other key wastes included multiple line items of the order to be entered manually into the scheduling system, no clear packing specifications, etc.
Action items planned and implemented
The team was broken into dedicated, smaller teams to address the wastes at each step. Each team generated ideas to eliminate the wastes and improve the outcome of their step. For example, in the first step, the team took certain improvement actions such as:
- Modifying the company’s scheduling system to automatically upload the orders received from the customers to Excel to avoid manual entries that were both error-prone and time-consuming.
- Standardizing the terms and conditions format to ensure no confusion related to packing, quantity, model type, etc.
The teams implemented 23 action points to accelerate the order to delivery process and ensure complete delivery of the orders.
