PROBLEM
This company sells
transportation equipment and provides service and parts support. The owner had executed a successful growth
strategy, and in a few years had grown by 400%.
The growth has taxed the ability of the organization to deliver the
equipment it sold, on time. The Vice
President of Sales spent much of his time running around the company, getting
updates on delivery information from various departments. His title may have been V.P. of Sales, but he
was really the head of Delivery.
LEAN SIX SIGMA TOOLS
Daily Work-Flow /
Order-Review Meeting
IMPLEMENTATION DETAILS - Daily Scheduling
Meeting
1) One of the most
effective tools anyone can use to improve on-time delivery, in a complex
multi-step operational process is the use of Daily or Weekly "Work-Flow" meetings.
2) These meetings
track the progress of customer-orders through the "operational" process. In past months we reviewed how this tool was
used by a manufacturing company. This
same tool is just as applicable for a distributor that has a multi-step sales
and delivery process.
3) The Vice
President, Scheduler, Service Manager and Parts Manager attended.
4) This meeting was
only 5 minutes long!
5) The scheduler
prepared the spreadsheet that tracked order flow. http://www.supplyvelocity.com/June_Order_Review_Meeting_Template.xls
6) At each meeting
the participants only spoke about orders that were stuck or where we knew we
had a problem. If the Parts department
was short on items that were going to be needed to finish customizing a unit it
would be known before it became a problem.
If the Service department was out of capacity to option-up a unit,
inbound units would be diverted from the manufacturer to a different service
center (our Client had 4 service centers around the mid-west).
7) The next day this
same 5 minute meeting was repeated.
Problems from the day prior were expected to be fixed. This repetition reduced surprises, and missed
deliveries to almost zero.
IMPACT ON PEOPLE
1) More
than anything this Daily Work-Flow Meeting freed up time for Vice President to
spend more time with Sales Reps and customers and less time tracking
deliveries. He used to do all the same
work, but did it by going around to every department throughout the day to get
updates. After this process was
instituted he was able to keep an eye on operations, but give his focus to growing
sales and profit.
2) As we
stated in earlier newsletters, these tools are all about creating
visibility. If you are not performing,
every day it is highlighted in this Order-Review meeting. The Service Manager did not last in this
high-performing environment. He was
replaced about one year after instituting this Daily meeting.
RESULTS
1) As stated last
month, Gross Profit % increased 60%! The
additional time the V.P. of Sales had to spend with his Sales Reps (instead of
tracking product delivery) resulted in dramatically improved profit for our Client.
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