On-time delivery improved and business potential doubled by reorganising Operations & Facilities
Fancy bicycles, that have caught the fancy of children, teenagers & women alike, were a huge money spinner for a leading bicycle manufacturer. In 2009, it was selling 30 models, in 2 to 3 different colours each, to customers in India and abroad. But just 4 critical components, out of 34 required, were made in-house while 30 were bought from other vendors. Thus, business success depended largely on sourcing of different parts from vendors, storing them, selecting right parts required for specific order and packing them before finally despatching the right carton for desired bicycle in Completely Knocked Down (CKD) form to the dealer who requisitioned it. Company’s Despatch Center, where these operations were performed, was becoming a bottleneck, which not only affected on-time delivery but also limited company’s growth potential in this profitable segment. After exhausting all home grown options to improve the performance of Despatch Center, management decided to seek expert help from Actuate Business Consulting.
After a critical review of operations, facilities & available space, consultants recommended to split the multiple tasks carried out in despatch center to create two distinct groups with separate supervisors and floor areas demarcated & assigned for each group.
Warehousing was completely reorganised with layout and location of aisles changed to accommodate 40% more racks. Racks were redesigned for specific parts, considering their dimensions & characteristics. For odd shaped components, Unitisation method was adopted instead of storing them loose. Specific location was designated for each part to save time spent for searching. Packing operations, carried out on work tables in batch mode, were replaced with conveyorised lines that set the pace for higher throughput with lesser errors. One conveyor was used for packing fast moving high volume models and the other for low volume models requiring more frequent changeovers. Feeder lines were laid to provide packets of small parts (Guthis) to the main conveyors Just-In-Time, thus eliminating the ‘guthi’ storage. Parts were issued to packing lines on hourly basis to reduce excessive transient stock in packing area.
Implementing the changes improved on-time delivery significantly and offered opportunity to double fancy cycles business.
Delighted by the results, ABC was engaged for reviewing another production shop’s operations.