Case Study

Lead Time and Inventory Reduction

The Problem

A company that manufactures bearing for various heavy industrial applications was experiencing high and costly inventory levels and long lead times for customers.

Our Approach

We used Simulation Modeling to find both self-imposed delays due to legacy artifacts in their SAP system and other inefficiencies. Using our simulation model we were able to determine the actual timing required to produce parts and eliminate the buffer timing that was driving up their inventory and the lead times.

We used Lean Manufacturing techniques to tactically improve the process flow and implemented Kanban through an ERP interface to create real-time signals to trigger production.

The Results

We reduced the Purchase Order Lead Time by about 25 days (39%) and eliminated about $4,500,000 in WIP inventory in 10 months.  We accomplished this in two weeks of billable time. Now that is real return on investment.

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