This major Dutch healthcare equipment manufacturer assembles large and complex medical analysis systems to customer specification.
The extensive end-to-end assembly Lead Time results into high storage cost and allocation of working capital. This is caused by global sourcing including sea freight of the main component and on the other hand by large demand variability including market driven delays. On top of that the complexity of the assembly process itself plays a major role: i.e. links to sub-assemblies, inevitable regulatory and quality inspections and tests.
The key question was to reduce end-to-end on-site residence time and assembly lead time with focus on the supply chain of the main component and on the final system assembly.
Supply and demand of the main component are disconnected, leading to excess inbound buffer on one hand and late deliveries on the other hand. This also leads to overload of available storage capacity. The two phase assembly process causes inefficient transport of large and heavy equipment and lack of overview of status and whereabouts of work in process. Finally, interrupted assemblies lead to inefficient use of limited assembly station capacity, causing additional delay.
Approach and results
The way of working and communication with the overseas main component supplier have been improved, resulting in a reliable pull-based supply and 50% reduction of inbound buffer. Next to this a simple and clear visual tool has been developed to create overview of status and whereabouts of work in process, reducing transport and searching time. Using Lean concepts and tools, final assembly has been transformed to uninterrupted one-piece flow, decreasing lead time by more than half and increasing customer order flexibility. To enable this, assembly had to be transformed to a balanced multi station process, requiring introduction of a new tool for moving the heavy systems.
This also simplified operator tasks and increased workforce flexibility.
“We could not have achieved the substantial lead time reduction without end-to-end involvement of suppliers, the on-site team and the market.”
Peter Lemke – Lean Six Sigma Master Black Belt