Lighting Producer Improves Efficiency, Safety, and Reduces Wastes in Shipping and Receiving
By Michael Beauregard, Senior Consultant
Goals
Besides ensuring a safe operation, the company’s executive team and the Shipping/Receiving team want to improve the efficiency of shipping and receiving operations by 20%. The goal will require improving the number of units shipped and the number of units received per labor hour. To reach it, they aim to receive incoming stock in less than 24 hours and move stock out of receiving in less than 48 hours.
The company’s Kaizen team was tasked to evaluate workflow, identify bottlenecks, idle time, process balance, equipment availability, and other measures, and implement a safe, lean process flow.
Findings
After receiving a refresher course on Kaizen, Lean and 5S principals from DPA senior consultant Mike Beauregard, Mike and the company’s team walked through the shipping and receiving processes. They found inadequate space to store all materials and excessive walk times due to the facility’s layout and disorganization. Stock sat in Receiving for long periods of time. Sales orders arrived in Shipping incomplete and not synchronized from different plant departments. Communication into Shipping was not adequate:
- Shipping personnel didn’t have enough information on available goods to make accurate decisions on what to ship.
- Finished goods arrived in Shipping in a disorganized state.
- Shipping and Receiving personnel were constantly interrupted by other team members asking for shipping updates.
- Shipping received the finished goods in waves, not level loaded.
- Order entry errors caused excessive time for the Shippers to research and correct them.
There was no efficient process for receiving outside processed goods. The Receiving process was hampered by lack of information, lack of supplier paperwork, and no inspection protocols.
Tasks
The company’s shipping and receiving team mapped the existing Shipping and Receiving processes and walked through the operations on the floor, measuring distances between processes. As a result, they identified 61 improvement ideas. After evaluating the ideas, they created an action plan for 56 of them.
Actions
- The team drafted new standard operating practices for Receiving, Receiving Inspection, and Shipping. They met with the administrator of the company’s ERP software system and set up customizations to enhance the Shipping and Receiving processes. They met with Scheduling and Production teams to improve its Ship Complete process.
- To create a safer place for opening incoming goods, they added a worktable to Receiving and began 5S-organizing the Receiving area. They changed the layout of two products’ shipping lanes for more streamlined flow. Improvements were planned for another product line’s shipping lanes. These will include worktables, a computer and printer, and support equipment. The team modified the prioritization process and drafted a SOP for it. Jobs with high priority will move immediately to Shipping, saving Shipping personnel 1.2 hours per day.
- The team created a poka-yoke approach for properly sizing lighting bundles in Production so they do not arrive oversized in Shipping and need to be opened and bundled.
- To prevent regular out of stock situations for one custom packaging component, the team set up a Kanban pull system with the supplier.
- The junior buyer will be trained to ensure incoming goods information is entered into the ERP systems Advance Receiving module, saving receiving staff two hours per day in paperwork searching and entry.
- The team also modified the receiving process for non-inventory goods to save over an hour a day.
Results
The improved shipping and receiving layouts, additional equipment, and standardized procedures are projected to increase the company’s Shipping efficiency from 33 units/labor hour to 40 units/labor hour. Shipping will save 8.4 hours per day, or 21%, on 40 labor-hours per day. The improvements will also create a more efficient Receiving operation, saving 4.7 hours on 16 labor-hours per day, or 29%. With DPA’s support, the company’s Kaizen event has resulted in not only efficiency improvements but also created a safer, less congested operation with less wasted motion, where less distractions will translate to fewer mistakes and better morale.