End-to-End Order Execution Process Re-engineering
Sub-industry : Machine manufacturing
Product : Drilling Equipment
Project category : End-to-End Order Execution Process Re-engineering
Revathi Equipment Ltd. is a leading manufacturer of Drilling equipment manufacturer based in Coimbatore specializing in Blast Hole drill rigs.
Revathi Equipment Ltd. was facing a tough time in delivering machines for the orders- having a very high lead time of 230 days and in the process also incurring high inventory costs. The management decided to crash the lead-times dramatically and invited LFC to help with the Operational Excellence Program.
If any of you face tenuous issues in your own organizations, I would highly recommend you talk to Levers for Change. They are highly competent at what they do (in the annual report of Revathi Equipment Limited, Coimbatore)
Chairman,Renaissance Group, Delhi
An Operational Excellence program was implemented at REL’s manufacturing unit in Coimbatore.
Key Levers for Improvements
A comprehensive diagnosis helped identify the performance killers, followed by an implementation program to achieve the deliverables.
- To address Low forecasting accuracy for Production Planning, a Forecasting system was defined with Right Forecasting Inputs
- Lack of standardization led to large number of parts and increased complexity. Design Library was made and Engineering Organization restructured to execute repeat orders more efficiently.
- To minimize delays due to input materials, complete stores management solutions were implemented. Scientific stocking norms were defined based on the demand analysis, lead time to procure, item cost and expected service levels.
- Sub-contracting work was found to create delays. This was improved through a revised vendor management system. Planning systems with vendors were implemented; vendor rationalisation was carried out from 42 to 10; Operational excellence support was provided to 10 vendors to crash lead time
- Cell based manufacturing and Kanban systems were introduced in assembly line and at vendors.
Order execution lead time reduced from 230 days to industry best 90 days
Engineering lead time decreased from 57 to 9 days
Procurement lead time decreased from 147 to 45 days
Vendor lead time decreased from 117 to 40 days
Assembly lead time decreased from 82 to 14 days
Major reduction in Inventory cost