Quick Response Manufacturing (QRM) is what every manufacturer dreams of. One manufacturer of plastic parts and components, from disposable packaging to high-end medical parts for MRI equipment, is using QRM to achieve significant lead-time reduction.
It started in 2009, when Nicolet Plastics of Mountain, Wis., observed that the major multi-national firms were increasingly moving their high volume, minimally complex molded business offshore to avoid rising costs at home. The company also observed that although the high-volume business was leaving, the low- to moderate-volume business was not.
Management recognized the marketplace’s focus on long-run production optimization offered an untapped opportunity in the low- to moderate-volume market. To remain competitive, the firm elected to exploit its strength in excellence at complexity and turn market weaknesses into opportunities. It began looking for manufacturing philosophies that supported the needs of short-run, complex-part customers.
That is when Nicolet Plastics discovered a solution right in its own backyard. Quick Response Manufacturing is a consortium between the manufacturing industry and the engineering school at the University of Wisconsin. It was developed and published by founding director, Rajan Suri, who defines the program as the pursuit of the reduction of lead time in all aspects of a company’s operation, embracing a relentless emphasis on time reduction that has a long-term impact on every aspect of the company.
For Nicolet Plastics, the key to making the QRM program work was two-fold: Company-wide acceptance of operational change and the business and manufacturing tools found in EnterpriseIQ, manufacturing enterprise resource planning (ERP) and manufacturing execution system (MES) software from IQMS. Before embarking on this new initiative, Nicolet Plastics established a few goals:
-
Reduce total order to delivery time of parts by 14 days (from 21 days to 7 days)
-
Reduce finished goods inventory
-
Be able to respond to unexpected changes in demand without a degradation of service
-
Develop a cross-trained workforce for flexibility, including the creation of a cross functional quick response office cell
-
Reduce last shot (last good piece) to first shot time (first good piece) by 50 percent
Step one was to ignore job titles and employee categories by defining the talents and skills required for an ideal shift on the production floor. A skills matrix was built, including both soft skills (interpersonal, ability to succeed in a team environment) and hard skills (technical abilities, intelligence), including gaps between the target skills mix and the actual.
With this thought process in mind, Nicolet Plastics immediately saw crossover. An employee previously defined as an operator might also be able to clean out a hopper, a skill that crossed over into materials handling. Once defined, Nicolet Plastics evaluated its employees in terms of skill levels through written and practical testing to determine competency levels and establish training necessary to create an ideal shift.
A credentialing program was established in-house and employees were rewarded for technical abilities and willingness to learn new production and process-related skills. New pay ranges were defined for each skill level, so as employees progressed in their ability to handle more complex issues, value to the company increased and so did wages. To date, 120-plus hours per employee have been logged over a three-year period, equivalent to a week of training for every employee since this initiative began.
Once the new employee roles were defined and established, Nicolet began tackling the individual QRM initiatives, including a change from standard costing to lean accounting (tracking actual costs); reduction of batch sizes; and better management of job complexity.
Nicolet Plastics has added many clients because it has been able to develop partnerships based on the value it delivers, not the price it charges—such as saving its customers a week of time in production. It also was the recipient of the Workplace Excellence Award from the New North, and was a finalist in two categories—Workplace Development and Manufacturing Excellence–for the Wisconsin Manufacturer of the Year award.
Other benefits of the overall QRM program include: A reduction of total finished goods inventory from a high of $500,000 in 2008 to an average of $200,000 in 2012 (while doubling total sales), and reduced time spent making scrap parts (scrap hours) by 45 percent in the first year. To find out more about those initiatives, visit http://bit.ly/AWslant73
Pat Reynolds, [email protected], is a packaging automation contributor to Automation World and VP/Editor of Packaging World.
