Sunday, July 23, 2006

Bringing Work In-House

A week ago, I worked on a kaizen event at a client site in Indiana. This kaizen event was not only successful but it had the best target goal of all, to bring work in-house that was currently being outsourced.

It seems lately that the current corporate direction is to chase the low labor dollars abroad to turn a quick improvement to the bottom line that will satisfy the Wall Street crowd. This kaizen project took the lean approach of increasing product velocity in-house first.

In one week, we opened up over 25% of the floor space (over 3,000 sq feet) by reducing and standardizing the work in process along with re-aligning the machines in the department to match the product flow. The product velocity in the department went from 5 days to 1-2 days depending on product complexity. Finally, the existing MRP system has tweaked to respond daily to the changing requirements. Yes, we are still going with a MRP based system (Got to learn to walk before we run). A few kaizen newspaper items were recorded as homework items that required additional work before the new process is 100% on-line however the team has a great action plan to succeed. All done without adding a single new employee. For the customer, our turnaround time went from a 3 week leadtime with the outsourced product to under 1 week with the work in-house.

What a great reason to form a kaizen team, bring the work in-house!

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