In the 1993 I was working on pursuing the Shino Prize for John Musat and MascoTech Braun. Gifford Brown, the great plant manager of the Ford Engine Plant in Cleveland, was putting quite a bit of pressure on me to complete the application by 1994. John was only interested in improving the operation so we could be "good enough" to penetrate the transplant auto markets. Click here to see John's earlier experience with Toyota.
One of the key performance indicators was inventory turns. To improve them we had to work with suppliers on kanban delivery schedules and more importantly lead time compression tactics. This resulted in regular meetings with representatives from U.S. Steel.
Every Friday morning U.S. Steel employees would visit Braun's facility in Detroit, as they had been doing for nearly fifty years. They would bring in donuts like they had been doing for those fifty years. We wanted to understand their business and supply chain processes so we could co-develop a workable kanban delivery schedule. They were very helpful in letting us know their processes. We began the process of developing proposals to shorten lead time and procedures to follow on the kanban system. At that time U.S. Steel provided 80% of Braun's material needs.
We had already shortened internal manufacturing lead time by reducing setup times, establishing total productive maintenance processes, pokayokes, etc. We openly shared with U.S. Steel how we had addressed our internal problems. We even created a master schedule to smooth the projected requirements to the suppliers.
After a few weeks of discussions with them, we noticed they never took any notes and simply set there with a blank stare. If the discussions got heated they would move the donuts closer to us. After a couple of more weeks, I reported to John, who was Braun's president, that U.S. Steel's position seems to be status quo only. John attended a few meetings and arrived at the same conclusion.
So, we created a VE/VA (Value Engineering/Value Analysis) team. It was like a kaizen event. For two solid weeks we worked from 7 am until midnight. We completely revolutionized the supply chain from placing an order to shipping product.
One year later, we were doing business with a mini-mill in Ohio and receiving daily deliveries from a 3 day schedule, as opposed to a sixteen week schedule. U.S. Steel's share of Braun's business dropped from 80% to 20% over the next two years. When your customer speaks, you had better listen and status quo should be avoided at all times.
The donut approach worked for years at Braun. But this time, it did not. Rather than turning raw material only six times a year, it was tripled to eighteen times a year. On-time shipments to Braun's customers never fell below 95%.
The only comfort zone one should adopt is an on-going willingness to improve processes.
©1995/2006 James Vick, Inc.
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