This story is rather dry and full of technical details that may interest very few of you although it was one of the major sucesses of my career. A minor alteration of processes that wound-up saving the company over $85K a year and building my reputation as a mover and a shaker... someone who knew how to get things done without upsetting the process and improving relationships while reinforcing communication between the manufacturing departments and the support departments throughout the company.1988 – Increasing ThroughputIn 1987 I went to work for SAIC after working as a temp in Chula Vista shutting down a division of a different large manufacturing company. The product lines were being sold off so there was both documents and material to move out. Approximately half of their line was distributed to a sister division in San Marcos and the balance was picked up by SAIC and to form a new division they christened “Range Systems.” This job shutting down this business-unit was one the worst ever environments when it came to morale. All of the old employees that were to be picked up by either division had been informed and only recently transferred to their respective new jobs. Anyone left would be unemployed as soon as we locked the doors for the last time. The rest of the employees were, like me, temps and we, like the remaining employees, would be out-of-work as soon as the last shipment was made. As I was, and had been for some time, a professional, I didn’t worry too much about this and performed my job to the best of my abilities. It didn’t take long until this was noticed.
As every week people left for the new jobs they had found there was a continuous influx of new people. When I was asked by HR about a move from Stock Clerk to Stockroom Supervisor I asked her to review my resume. She liked what she saw as my experience was in line with the work they had to do before wrapping the building up. After that, for the next 3-weeks I received around 2 promotions a-week until I was the program manager for the final product shipment. No raises, just increased responsibility… this was no problem as the increasing responsibility decreased boredom. For the final week this large manufacturing facility had about 10 of us knocking around getting the final shipment processed and shipped. After we shipped we would close the door for the last time and everyone would be out looking for work. We were to make this final shipment on Thursday. On the Tuesday before this I was asked to report to SAIC in Sorrento Valley for an interview… my reputation had preceded me and they liked my professional attitude. I was asked to join the company, Division SAIT, as “future” Materials Manager. As it was explained the current manager had retired a year previously but his replacement was unable to perform and management pleaded with John to come back. It was only a matter of time before he would leave again. I was to mark time as the Shipping/Receiving Supervisor until this happened. I was advised to… “just keep the seat warm,” as the department ran, in their opinion, as good as can be expected.
Within 2-weeks I found there were a great number of areas inside the department where efficiency could be improved. I have found over the years that improving a process correctly results in less hassle for the employee, fewer opportunities for mistakes and more effective dispatch of responsibilities. Shipping and receiving shared a dock where the day I joined the organization an incoming shipment had been misidentified and wound up being marked with information for an outgoing shipment and sent halfway around the world to a customer that called us inquiring why the equipment was sent to him… and why they had paid shipping for a heavy piece of equipment they didn’t order. Several hundreds of dollars later we got it back. I noticed other processes that could use some improvement so we did some measurement and I did a movement and usage study to identify trouble in the process.
One area that showed dramatic improvement after I got involved was the receiving process. The process, when I arrived went something like this: Upon arrival the receiving clerks, 4 of them, would find an incoming carton and carry it to their desk where they opened the transparent plastic window stuck to the outside of the carton and removed the packing slip then opened the box and removed the contents. Then they walked 5-steps to the trash and discarded the box and packing material. Returning to their desk they picked up the packing slip and walked another 5-steps to the Open PO file where they searched through the PO copies until the correct PO was found. as the PO's were casually filed in the order they were issued this could take substantial time searching and re-searching until they located the PO.
If they were unable to find the copy after multiple searches the item and its packing slip were sent to the “bonded cage” until an inquiry was made or until a future date when they might have a chance to make a second or third (or more) search for the PO.
This cage was approximately 10’ x 4’ and lined with shelving, some of which had been removed to make room for a pallet of parts that had material piled so high it was impossible to enter the cage without moving the material blocking the door... the door which could no longer be locked due to the overflow.
If the PO was found they proceeded to match the packing slip against the PO.
Any discrepancies sent the parts to the cage. If the packing slip matched the PO, the packing slip was matched against the arriving material.
If there was any discrepancy the parts were sent to the cage. Mismatches could be a difference in count, part number, description, PO # or Vendor Name. The definition of ANY difference included a misspelled word or a description essentially the same but slightly different.
Any of these factors qualified for the cage. The submission of items to the cage and the lack of follow-up pulled the average processing time to 6-days. Even with non-receipts accounted for, the average should have been closer to 6-hours.
Assuming a lack of discrepancies and following the matching of the documents against the material, the material was inspected for obvious damage, then counted and the documents stamped with a receiver number, line item, quantity and an initial. The PO and attached paperwork when transitioned to a data entry terminal where the receipt was entered into the computer and a receiving document was printed matched with the part and sent with the parts to Receiving Inspection. The documents were sent to accounting for matching and payment. As this took about 45 minutes, average, the first items hit receiving inspection 45-minutes after the work-day began. 4-people managed to send around 35-45 items @ day through this process.
Although several weeks down-the-line we reviewed and modified the PO distribution process, which would result in another decrease in receiving delays, for now we had gone as far as we thought we could.
I won’t go into the results of my time-and-motion studies or the details of how I got my data but following this period of study I made some changes in the processes. These changes managed to get the average processing time to the minimum average of 6-hours, although the few items that were not processed the same day, due to the PO distribution and signature process, still continued to increase the average process time.
For the first 3-days the employees absolutely HATED these changes as it took almost 2 hours to get the first item into Receiving Inspection. I heard “But we’re not getting any work done,” several times that day. The difference was, at the end of the day, we managed to process 60 or more items. On the third day I pointed this out and, unknown to me, this was confirmed independently by an independnant-minded clerk. Complaining immediately stopped.
Unknown to most of the department, our greatest moment of triumph came 3-months later when Donnie transferred to Range Systems. I asked the guys in the department if they felt he needed replaced. I knew efficiency had improved and the stress had decreased so I wanted their feedback. They all agreed with me. We didn’t need to replace Donny as “incoming material has decreased so at the end of the day we really don’t have much to do the last hour or so.” Unknown to them receiving had actually increased by almost 1/3rd and the cage was virtually empty. How did I do this? After studying the data I had gathered I had imposed the following changes:
1) Increase communications. Anything going into the cage required the filling of a 3-part form stating PO, vendor and as much about the part as possible, including the discrepancy or any lack of a filed PO. A copy went into the cage with the parts, 1-copy went to the buyer and 1-copy went to the requestor. Usually one of those two people wanted the parts and would do whatever was required to eliminate the discrepancy, thereby decreasing the items in the cage dramatically as well as assuring very few items sat for the months that many past shipments had sat.
2) Organize Files. POs were filed alphabetically by vendor and in PO number order. This made it much easier to find the POs although there was a loud outcry about how there was “no time to spend filing! We have material to process!” Searching for the Open PO decreased from an average of 4-minutes to under 30-seconds.
3) Purchase Equipment/ Modify Procedure. We obtained two multilevel wire rolling carts. These carts were used for incoming material and were the single biggest addition we made to our equipment. Now, upon arrival, clerks would…
A) Save 20 minutes a-day
Place the unopened cartons on the shelves, 4-5 per level on 4-levels for 16-20 boxes at a time. Then the cart moved to the desk where all of the cartons were opened and the packing material discarded in a bin that had been moved between the clerks for easy access. Eliminating the multiple walks to the trash and the receiving dock saved approximately 20-minutes a-day, as it took under 2-minutes to trash all appropriate packaging. (40 trips @ 35-seconds each vs. now only 4-5 trips) The incoming material now sat alone on its respective packing slip.
B) Save 120-minutes a-day
Roll the cart over to the Open PO bin and retrieve all of the required POs, placing them under the material with the packing slip. As previously mentioned, organizing the POs for easier access saved us around 2-hours a-day. (40 searches @ 4-minutes vs. 40 searches @ ½ minute)
C) Save 15-minutes a-day
One at a time removed the parts, the packing slip and the PO. Perform all comparisons, write–ups, etc as usual, processing each part including receiving stamps and notes. The only time saved here was elimination of the walks back and forth to the pile of incoming material and the desk. This was another improvement of around 15-minutes. (40 trips @ 30-seconds (20 min) vs. 4 trips @ 30-seconds (2-min) + 5-seconds x 40 (3.3-min) for 20 min vs. 5.3-min)
D) Save 54–minutes a-day
Push cart over to data entry station and enter all receipts, print all receivers and match with the incoming material. This saved all of those walks from the desk to the computer and printing each receiver individually, a process that took about 5-minutes each. (30 second walk, 3-minute entry, 15-seconds awaiting processing & 45-seconds printing the receiver for 4.5 minutes per item vs. 4-30-second walks (4carts @ day) 3-minute data entry @ & 1-minute processing & 20-seconds printing saving 10 seconds per receiver when printing all together) (3.3 hrs vs. 2.4 hrs)
Additionally, we identified a large demand on our time, which was spent following-up on tasks that had already been performed. In a single day we received re-do requests for 10 missing packing lists, 1 instance of mis-identified material, and 17 re-printing of receiving documents. Opening lines of communication in accounting and a cursory examination of the accounting retrieval process revealed individual accountants (a different one each day assigned to perform pick-ups) would, while riding the elevator to the next floor, search through the incoming documents for their own work and separate it from the rest before turning the entire stack over to the accounting supervisor who then matched the documents with the computer-generated list of receipts. If no document was found it would result in a re-printing request… for items that had jumped the review process and, unknown to the supervisor, were active in one of the offices of the various accounts. Once this matching procedure was know by all of the accountants demands on re-prints dropped to virtually zero.
What began as an attempt by the accounting supervisor to "save-face" by protesting "All problems seem to come from the receiving department" and denial that any problem existed in the accounting processes, actually turned into a bonding experience where we found we worked well together and found each of us instrumental in supporting each others planned departmental goals when we brain-stormed and bounced various problems and solutions off each other. Subsequent to this project we found a certain amount of simpatico in our similar attitudes and enjoyed several lunches together.
This change to the process resulted in a savings of around 3 ½ hours a day or 17.5 hours a week. This improvement coupled with a few additional changes were directly responsible for cutting our annual department budget by $85K over 2-years, most of that coming from employees that left for various reasons but were not replaced due to more efficient processing.
Prudence transferred to the mailroom and Frank received his degree in a discipline that wasn’t of use in our company. Frank left for greener pastures. John, after going through a divorce, left for better hours that would allow him to pay more attention to his kids. Donnie transferred to a different division. My department of 8-workers decreased over a year to a crew of 5: 1 office clerk, 1-shipping clerk & 3-receiving clerks. This happened as business was increasing and incoming traffic was going up.
This performance built a reputation at SAIC that I enjoyed for the next 5-years and was instrumental in my being drafted into the companies first formal process-improvement group.
When I walked into the room for our first meeting I was surprised to find all Vice-Presidents and one rookie...me – but that’s a different story.
