Build-to-order produces sound results

Even though QSC now manufactures more models of amplifiers, it's still climbing the charts with new efficiencies and savings.

By -- Modern Materials Handling, 2/1/2001

Now that QSC Audio has been in its new manufacturing facility for a year and a half, the maker of state-of-the-art amplifier systems has experienced huge savings in labor, reduced its finished goods inventory, and increased the number of separate models produced to 93.

"We build-to-order here, so it's the order that drives production," says Bob Meigs, who is now the director of operations. "It has radically changed the way the whole organization thinks."

Meigs says that while the new production model has proven very effective, it can take people away from their comfort zones.

"One of the scary things is when you have 2 or 3 days of soft orders. You tend to get nervous, because you see things in real time. You end up building only the orders that you get. If I have 40 orders that day, I build them and then send people home with pay," he says.

While soft days do occur, the orders tend to even out, and within a few days the levels are back up again. Such a system does avoid the over-manufacturing that often occurs when building to stock. Meigs says that prior to opening the facility, QSC manufactured according to a plan devised 3 mo. earlier. This would result in an inventory overstock on various models that would require another 3 mo. or more to correct.

The new production scheme has also allowed QSC to consolidate labor from two shifts down to one, saving $1.3 million dollars annually. Since it is build-to-order, the facility saves another $1 million on finished goods inventory over build-to-stock operations.

The system is designed so that every workstation has all the parts needed to build every one of the 93 models. Meigs has worked at adjusting how these parts are obtained, with some parts having both a local supplier that can provide fast delivery, and an overseas supplier that saves money.

The new build-to-order model has also allowed Meigs to provide clients with custom-build models. Soon customers will be able to design their amplifiers online, sending information on the processors, resister networks, or dip switch settings they prefer directly to the manufacturing cells.

Meigs adds that no major changes have been made to the materials handling systems since our original article first appeared last March.

"We did it right the first time," he comments with pride. "It just runs and runs. The new factory has become our new manufacturing template."