Winds of change
After hurricanes damaged its Orlando warehouse, Lockheed Martin adopted lean in a new facility designed to support 300% higher throughput with more than 40% less inventory on hand.
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 3/1/2007
In business, you never know where the winds of change will blow from. In the case of defense contractor Lockheed Martin, three consecutive hurricanes in 2004 were the catalyst to design and build a new parts receiving and shipping center at its missile and fire control plant in Orlando, Fla.
Using lean Kaizen techniques, the new materials center requires just 30,000 square feet to store and kit parts and components for the adjacent factory. That compares to 75,000 square feet in the original facility, which was located in another area on Lockheed Martin’s property.
Despite the reduced storage space, the new center was designed to support a forecasted increase in demand of 300% over the next few years, while reducing inventory levels 40 to 50% and operating costs by 15%.
Those improvements came from a combination of factors: relocating the facility next to the factory, re-evaluating every step involved in receiving and storing materials, and then implementing materials handling technologies to support the new processes.
“Our processes used to be widely scattered and involved a tremendous materials handling effort to get materials to the right place for our operators,” says Sam Cox, inventory planning and control manager. “With this facility, we looked at how we could bring everything together in one location adjacent to the manufacturing plant." In addition, Lockheed Martin went from a push environment, where parts were kitted far in advance of when they were needed on the floor, to a pull environment, where kits are put together as needed.
The centerpiece of the new materials center, which supports manufacturing operations in the adjacent plant, is a three aisle, mini-load automated storage and retrieval system (AS/RS) with 6,000 storage locations (viastore, 616-656-8876, www.viastore.com) that can handle 550 transactions per hour.
The AS/RS is faster, more efficient and provides 5% more storage space than a seven-aisle system in the original facility.
Other features of the facility include:
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Narrow-aisle pallet rack serviced by man-a-board lift trucks for unit-load storage
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A 25-foot tall vertical lift module for shop tools and maintenance supplies and a vertical carousel for storing international shipping documentation required by Customs
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Wireless mobile workstations that allow inspectors to go to wherever the work needs to be done
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Ergonomically designed wheeled lift carts for receiving materials
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A 50- x 80-foot bridge crane for handling large loads in shipping and receiving
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Weather-sealed dock doors equipped with dock locks for safety
In the new center, Lockheed Martin reduced the cycle time from when a work order drops into the MRP manufacturing program to when a kit is recognized as available to the floor from 7 days to 1.5 days.
What's more, the facility's response time, defined as how fast an impromptu critical factory request can be filled, was reduced from more than four hours to just 15 minutes.
"We have a saying: The factory builds products and the materials center builds trust," says Cox. "We get what they need, when they need it and in a usable condition. If we do those three things, we're doing our job."
Going lean
The Orlando complex totals more than 2.6 million square feet, including 300,000 square feet of manufacturing space, the materials control center, and space for research and development. While the electronic systems produced at the missile and fire control complex will vary according to the contract, all products are defense related. Quality is paramount.
"Because our customer is the war fighter in the field, our product has to work the first time and every time," says Cox. "We never forget who we're working for."
In 2000, Lockheed began implementing the principles of lean manufacturing and Six Sigma to create a lean "factory of the future." Plans were on the drawing board to move the materials control center adjacent to the factory in 2008. That timetable was accelerated when the hurricanes of 2004 damaged the roof and the structure of the old shipping and receiving building.
The team put in charge of the new materials center was challenged to develop a center that could support increased production in the future while reducing floor space and operating costs today. The team also wanted to reduce the amount of inventory on hand by 50% and improve the overall cycle time by 30%.
One of the first steps toward meeting those goals was to map all of the processes in the old center. Through that exercise, they were able to eliminate 45 of the 113 process steps.
By moving the facility, and through better design and layout, the distance that materials traveled from the dock to stock was reduced from 2,384 feet to 330 feet and the distance materials traveled for shipping was reduced from 442 feet to 70 feet.
A second focus was the velocity of materials moving through the facility. The design of the AS/RS played a role there, too. The system, which handles 550 transactions per hour, is designed so that each storage/retrieval machine performs both a putaway and a retrieval on every move.
In addition, AS/RS wheeled carts that move materials through the center replaced nearly 1,900 static pallet locations to hold inventory. Workstations were also made mobile, putting them on wheels and adding wireless communication. "People can move to the job instead of waiting for the job to come to them," says Cox.
All told, the improvements to processes reduced inventory by 44%. In addition, by moving to a pull environment, where kits are put together only as needed rather than in advance, the facility has gone from staging up to 282 kits at a time to just 36.
Improved safety
Safety was also a factor in the new facility design.
At the dock, a weather shield was installed to keep out weather and debris and to maintain a clean working environment. In addition, a dock locking system was installed. Once a trailer is locked in place, it can't pull away until an operator releases it from inside the building.
Another measure: The wheeled carts are adjustable so that workers can load them at an ergonomic height.
A third goal was to reduce the noise level in the center. "We wanted to operate at 70 decibels," says Cox. To get there, Lockheed Martin installed a specially designed rubber-coated chain conveyor that reduces noise and all electric motors to handle conveyor transfers and lifting of inventory trays.
While the conveyor in the old facility could be heard from outside the building, today, operators can carry on a conversation with co-workers in front of the AS/RS.
Finally, visual controls were implemented. Color-coded traffic cones are now placed on boxes to signify the status of a box, identifying, for instance, whether it has been accepted and is available for putaway, is on hold, has been rejected, or is ready for shipment.
The facility went live last summer. Six months into the operation, Cox says his team measures by more than just improved cycle time and reduced inventory.
"The best compliment we've had came from a director who told us that no one knew we'd even done the project," Cox says. "We made this move without skipping a beat. It was seamless."
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