Miller SQA powers up with quick response manufacturing
Here's how the office furniture maker builds and ships orders in less than 10 days and plans to turn inventory 200 times a year, smoking its competition on both counts.
By Staff -- Modern Materials Handling, 2/1/1998
O ffice furniture maker Miller SQA describes its shop floor as "a closed-loop, high-velocity, make-to-order manufacturing environment". The company could simply say it practices quick response manufacturing.In a typical day, the company's 300,000 sq ft production facility in Holland, Mich., manufactures furniture for 300 customer orders composed of roughly 3,000 shop floor jobs. But more importantly, order-to-ship lead time for these orders is just 2 to 10 days compared to 6 to 8 weeks for the rest of the office furniture industry.
"We decided to become extremely agile by ridding ourselves of non-value added expenses and better utilizing our space and labor," says Bill Bundy, vice president of operations.
To make this possible, two key changes were made to the shop floor.
One is the creation of 19 work cells, each specializing in a product or product line which is built entirely at that cell. This eliminates wasted time previously spent moving work-in-process between work cells to complete production.
The second element is the implementation of a manufacturing execution system (MES), bar codes, and radio frequency data communications (RFDC) to coordinate all shop floor activities.
"Nothing moves in our plant without a customer order. And the MES makes sure all orders are dispatched in the sequence they need to be executed," says Doug Bonzelaar, application development manager.
In addition to handily beating its competitors in order-to-ship lead times, Miller SQA also excels at on-time shipments, which are pegged at 99.37% over 1 year.
All of this has had a very positive effect on inventory activity and levels too. Annual inventory turns are expected to double from current levels of nearly 100 (10 times the industry's average) to over 200 projected for this June. Meanwhile, inventory value in the plant has dropped from $5 million to $500,000, trimming floor space devoted to inventory by about 70%.
"Just by taking materials off the shop floor, we increased throughput more than 26%," says Bonzelaar.
Today, Miller SQA's approach to manufacturing is an outgrowth of the philosophy summarized in the company's three initials-simple, quick, affordable.
Determining changes needed
When Bundy, Bonzelaar, and others started to consider how Miller SQA could become more agile, they evaluated their processes and generated a startling statistic.
"We determined that there were only 2 days of value-added time in each of our products. The rest of the time spent on the shop floor and in-process was idle time, and, in our minds, waste," says Bonzelaar.
As a first step, the layout of the 300,000 sq ft shop floor was evaluated. Previously, work was done at multiple workstations, moving from department to department sequentially. Significant time was wasted in producing every order just by moving work-in-process between departments. In addition, it was common for WIP to sit in queues at workstations, tying up floor space that could have been devoted to additional manufacturing capacity.
The shop floor was reorganized into 19 work cells. Each is dedicated to building an entire product or product line from start to finish. Once production begins, work continues until completed.
A typical order, however, includes products from many work cells. And to be able to cut lead times and ship on time, all products in an order must be ready for shipment at the same time.
"We may sell offices, but we manage production as piece parts and their movement needs to be coordinated in real time," says Bonzelaar.
"We had grown to a point where it was no longer possible for us to use the master scheduler of our materials requirements planning (MRP) system to give us a general game plan that was then expedited on the floor to get the right jobs done on time," he adds.
That's where the MES (SynQuest, Inc., Norcross, Ga.) fits into the upgraded shop floor.
Using real-time data collected from bar codes and communicated by RFDC terminals, the manufacturing software dynamically calculates schedules for all orders at each work cell. The MES also provides personnel on the shop floor, in shipping, and even in the purchasing department with up-to-the-minute information on job status, projected completion dates and times, and information about production problems.
Build to ship
To Miller SQA, its customers are dealers who sell directly to the actual users of the office furniture. Orders arrive at the manufacturer by either electronic data interchange (EDI) or paper.
All order information is passed onto the company's enterprise resource planning software, which includes a materials requirements planning (MRP) module. Using the order information including the scheduled ship date and time, the MRP software produces a daily schedule of needed materials. Forty-eight hours prior to the ship date, the MRP information is downloaded to the MES which then prioritizes manufacturing operations for the order.
Prioritization is especially critical because products are built in different cells and require varying amounts of time to complete. Furthermore, Miller SQA tightly schedules its 91 freight carriers, requiring that all items in an order arrive at the dock on the ship date by a specific time. If that scheduled time is missed, the order cannot be shipped by that carrier until the following day.
As it schedules production, the MES requests needed raw materials from a warehouse 3 miles away from the plant. Pick lists are generated and parts delivered to the shop floor just 2 hours before manufacturing is scheduled to begin. Raw materials are taken directly to the workcell where they will be used.
A dispatch list is released by the MES to a network of 65 PCs on the shop floor. Orders are prioritized by the production hours required and the scheduled ship time. The order with the shortest time buffer jumps to the top of the list.
This is in sharp contrast to the way that orders used to be prioritized, explains Bonzelaar. Thousands of paper-based job cards would be produced by the MRP scheduler. Production supervisors would then sort through the cards and make judgment calls on which items should have the highest priority.
All raw materials these days carry bar codes that are scanned as they become part of a finished product. This information is sent by radio frequency to a central inventory database. By frequently updating its suppliers over the Internet on actual raw materials inventory levels, Miller SQA can better control the flow of inventory to its warehouse and keep levels at a minimum, explains Bonzelaar.
Shop floor operators use the PCs to update the MES on the status of each job. This includes alerting the system if an unexpected delay or problem arises as well as signalling actual completion times and quantities for each order.
Meanwhile, the MES' scheduler adjusts production schedules based on any and all job status changes, adjusting the dispatch lists as needed. If a job is projected to be late, the system alerts all key people by highlighting the late jobs in red on the PCs.
"By knowing in real-time what jobs need to be run and when, our production workers and supervisors have something they always lacked before MES-total visibility of the shop floor," says Bonzelaar. "This visibility enables us to manage and add value to the process rather than hunt and gather information," he adds.
A typical order is classified as work-in-process for 8 hours. When a job is completed, a lift truck picks up the furniture and delivers it either directly to the designated shipping dock or to a small staging area for finished goods. Bar coded shipping labels identify and track the shipment.
As much as the system has already accomplished, Bonzelaar still sees room for significant improvement.
"We are continually getting better at using the MES to meter materials to the shop floor. Ultimately, we would like to be able to let our suppliers own the raw materials and be responsible for the cost of warehousing until we are ready to actually use them on the shop floor," Bonzelaar explains.
He also has plans for using the MES to reduce inventory levels on the other end of the production process.
"We plan on getting our work-in-process down to 2 hours. At that point, we will eliminate all finished goods inventory, freeing up still more floor space for manufacturing. That will also help us to increase our inventory turns to over 200 by the middle of this year," Bonzelaar says.
What MES delivered
Throughput increased 26%
Inventory value reduced from $5 million to $500,000
Floor space devoted to inventory storage reduced 70%
Order work-in-process time cut to 8 hours
Number of orders on shop floor daily climbed to 3,000
On-time order shipment over 1 year 99.37%
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