Controlling Backlogs in a ‘Lumpy’ Business
With an increased demand for product and an introduction of new model types, Alumacraft was struggling to keep up with production requirements, creating a large backlog of sales requests. As production output continued to deteriorate, Alumacraft engaged Carpedia to improve the output capacity of the two production facilities in Minnesota and Arkansas. The key opportunities that presented themselves were:
- Missing or incorrectly fabricated parts within hull and final assembly increased work-in-process (WIP).
- Extended machine change over times and significant underutilization of routers and presses.
- Scheduling to balance the plant at its constraint.
- No measurement system to evaluate product production times across multiple models.
- Lack of visibility around completion times and expectations.
The project returned a 3.2 to 1 ROI, and increased overall production output by 19% within 48 weeks. During the installation phase of the project Alumacraft experienced a unionization vote. Even amidst all the process and behavior changes installed, the local employees voted against unionization.
Overall the project:
- Increased output across both locations by a total of 19% or an additional 12 equivalent units per week in Minnesota and an additional 24 equivalent units in Arkansas.
- Additional capacity/ production was translated into new Sales.
- Reduced assembly cycle time within each work cell from fabrication to hull assembly, paint and decal resulting in a 12% improvement.
- Revamped plant production sequencing to more effectively schedule and plan production.
- Reduced missing parts and decreased WIP by 32%.
- These improvements naturally led to an improvement in order cycle time of 10-20%.
- Installed visibility boards and execution control tools that allowed leads to monitor performance and progress and align with their daily required results.
- Implemented Daily Operating Reports with key performance indicators, such as output, schedule attainment and quality control to improve discussion around variances from the business requirement.
The Client Experience:
“The Carpedia Team not only helped to identify areas for improvement, but used these examples to teach Alumacraft personnel at all levels how to evaluate, plan, test, implement, measure, and sustain improvements. The tireless work ethic of the Carpedia team throughout the project further helped to set the tone for Alumacraft and solidify the Carpedia approach to sustainable growth.”
President, Alumacraft Boat Co.