DLA Supplier Lean Kaizen
Bättra led a Lean Six Sigma (LSS) Kaizen event with a DLA supplier, focused on reducing changeover times and lot sizes to reduce lead times and Work-in-Process (WIP) inventory. Our team kicked-off this three (3) month lean event by conducting a site visit with the supplier to identify the most significant issues impacting their ability to deliver complex Critical Safety Items to DLA. We conducted an analysis of DLA demand data and supplier delivery data and identified one part in particular used on the C-130 Hercules aircraft with relatively stable demand from year to year. The supplier had delinquent deliveries, production lead times well over a year, and a significant investment in finished inventory, waiting to be inspected by the government.
Bättra’s team facilitated workshops with the supplier to develop a current state process map to highlight internal constraints where set-up and cycle times could be significantly decreased. Working with the supplier, we adjusted their approach to running multiple, non-consecutive operations on one CNC lathe by consolidating changeover time to one initial set-up, consistent with the lean principle of Single Minute Exchange of Die (SMED). By installing some simple tooling the supplier was able to reduce the total set-up time by 50% from 26 total hours down to 12 hours for all operations.
In order to achieve a significant reduction in lead time Bättra took the analysis a step further by addressing the supplier’s current state production lot sizing methodology. We used an optimum lot sizing formula to identify trade-offs between set-up costs (labor) and inventory carrying costs. By lowering the lot size, Bättra was able to reduce total lead time by 30% and realize cost savings per lot. In addition, the reduced lead times will also lower inventory levels at DLA and allow the Agency to respond more quickly to unplanned requirements. Bättra also worked with DLA’s Product Specialists and the Service Engineering Support Activity (ESA) to eliminate government Production Lot Testing (PLT) in lieu of contractor testing due to the supplier’s excellent quality performance record, which removed a significant barrier to product flow – a quality protocol that led to a single government test per contract and led to large lot sizes.