Cycle time reduction and inventory control using Lean
August 15, 2022
Sanne Carabain is a trainer/consultant at the Lean Management Institute
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During the pandemic, we experienced a boom in demand. When everyone is home with kids, garden playhouse toys come in handy! Now that the restrictions are all but lifted, orders are back to normal levels, but last year's spike in demand taught us a lot about the shortcomings of the process we had in place.
The Outdoor Life Group incorporates more than 70 different modules (in a playhouse, for example, this could be a tower or a bridge) in two types of wood: pine and Douglas. That's 140, and of course the number of individual parts that make up the modules is even greater. That alone makes the process quite complicated. Moreover, every order is unique because our DIY designs are modular and 100% customizable.
In 2021, as we struggled to keep up with orders, we realized that there were huge opportunities to improve the way we organized work. That's when we contacted the Lean Management Institute and asked them to come support us in transforming our sawing and order picking operations. The team that would focus on this project consisted of a supervisor, an order picker/sawyer and myself.
With the help of the Lean Management Institute, we began mapping out our customer demand (which is highly variable, both in terms of volumes and seasonality, in that in an off-peak month we may have three orders per day, while in a peak month we may have up to 120 orders per day). It quickly became clear that the best configuration for our site was a U-shaped cell. Previously, we had two lines - one for pine and one for Douglas fir - whereas now we can work with the two woods at the same time. With the new system, a cart can start picking every 1.20 minutes (one cart represents one order).
Cycle time reduction
We then measured cycle times for sawing and picking and rearranged the assembly process: we used to saw all the items in a module in order, put them on a moving table to take them to assembly, then lifted them and put them on another table for final assembly. Lifting from the first table to the second was clearly one of the 7 wastes in Lean, so we eliminated that step and started picking items directly in the order they needed to be assembled. That reduced the cycle time for picking andassembly by more than 20%: we started with 20 minutes and ended with just over 15 minutes.
Standardized work and eliminating waste
We have also introduced standardized work to make order picking easier for the order pickers, and we are now color-coding parts on the racks. The new system is so easy to understand that new employees joining us during the busy season will know how to go through the process within a few hours.
Based on our customer Jungle Gym's (for whom we act as fulfillment center) forecast of which items they sell the most, we also reorganized the items on the order pick line. We divided them into A, B and C items. A and B items go fast (we need them up to 60 times a day) and were therefore placed in the easiest places, while C items (which are used less frequently) were placed on higher shelves.
As for sawing, we were doing batching. We sawed wood for every order that came in, which resulted in wasting too much sawing time. The Lean Management Institute suggested we saw only the parts we had used the previous day to assemble orders. That way the internal orders for the sawing department became much smaller and came in on one day for the next. In essence, we now use saws only to replenish parts. This gives us control over our inventory (we need a minimum of two days of stock on site) and good cycle times in both the assembly and sawing departments (the two departments are now largely independent of each other and do not have to wait on each other as before).
With the new system, we increased our order fulfillment by 50% within normal working hours.
Shorter lead times and inventory control with Lean working
People are the key to process improvement, but they need to see the benefits of Lean before they can easily step in. It is good to see that we are now slowly beginning to understand why Lean is a good idea and the great benefits it gives us - namely the shorter lead times and the ability to control inventory. The Lean Management Institute has taught us a lot about process improvement, and we are eager to test the new system as soon as our demand peaks again. I think that's when we'll really get people's buy-in.
We see much potential for improvement in our site and are excited to see what else this journey will bring us.