How to Create a Competitive Edge and Reduce Manufacturing Costs by Improving Process Efficiencies.
A primary focus of lean manufacturing is to eliminate process inefficiencies; that is, eliminate anything that does not add value to the final product. In this respect, excessive lead times are an inefficiency that carries with it a high cost, one of which is excess inventory. Excessive lead time not only reduces the ROI on manpower, raw material and finished inventories, but it is a major obstacle in the pursuit of customer satisfaction and revenue growth.
A company was looking for a competitive edge to generate sales revenue which was declining due to the recent economic downturn. As a leading supplier to the home furnishings industry, product pricing and quality were already as competitive as possible. The only part of the sales closure trio to improve upon was service by reducing the lead time between order receipt and shipment. The company needed to implement a strategy to reduce these lead times and allow the manufacturer to be more responsive to customer demands. By developing and executing manufacturing flow and process improvements, I led the team, using Lean Six Sigma tools and initiatives, as we reduced lead times on built to order products up to 50%, from 12 weeks to 6 weeks. With the implementation of these strategies and in response to this competitive edge, sales increased. As the shorter lead times were sustained, the company quickly established a reputation for having the quickest order turn time in the industry.
Question: Are you experiencing customer dis-satisfaction and unacceptable revenue growth due to lengthy and excessive order fulfillment lead times?
Entry filed under: Customer Loyalty, Dan Trojacek, Furniture Manufacturing, Labor Costs, Lean Six Sigma, Manufacturing Costs, Material Costs, P&L, Production initiatives, Profitability, Raw Materials, Sales Revenue, Supply Chain. Tags: collaboration, Customer Loyalty, Customer Service, Dan Trojacek, Eco-friendly, Employee Satisfaction, Environmently friendly, Furniture Manufacturing, Green Manufacturing, Human Capital, Labor, Labor Costs, Labor Negotiations, Leadership, Lean manufacturing, Lean Six Sigma, Manufacturing, Manufacturing Costs, Manufacturing Operations, Material Costs, Mattress Manufacturing, Operations, P&L, P&L Management, Process focused, Process Improvement, Production Initiatives, Profit Driven, Raw Materials, Results oriented, Sales, Sales Revenue, Supply Chain, team building.