(Click to listen; if you can’t see the media player in your email, click the title of this post to go to the website)
Interview with Mark Gebbie of Excelsior Printing
A new line of greeting cards was located in their North Adams facility which came with the production system used in the past. This brought high labor and high inventory costs.
Focused on assembly process building packets for finished goods stock. We observed the current process and discussed with the operators. The operators made many suggestions and the experiments began. The result, an improved process requiring one assembler rather than two to keep up with customer demand.
The stocking program was examined next. Two packet quantities existed for all 200+ sku’s (shop keepers units), 6 per packet (95% of volume) and 12 per packet (5% of volume). We decided to make the 12 per packet units to order while maintaining stock of the 6 per packet sku’s.
As a result we reduced inventory $ by 50% and labor by 50%.
** You can see the results for yourself and speak with Mark at the next Western Massachusetts Lean Network Meeting – Thursday, August 16th, 2012 at Excelsior Printing, 60 Roberts Drive in North Adams, MA. Advanced registrations is required. Please visit our the GBMP website/events calendar to learn more and register. **
This is a great story. (And I was just out in North Adams to visit Mass MOCA last weekend.)
One thing I was disappointed in was the way that the labor reduction was reported. The company overall did not fire 50% of its warehouse people, so the labor reduction is a fantasy from the bottom line perspective. BUT! The reduction in inventory and improved response time are excellent. AND the story hinted that with the freed capacity, the company was able to move into new markets. It is that new revenue that would be much more interesting to hear about.
By: jackvinson on August 12, 2012
at 9:11 am
Good point Jack
The people made available were needed elsewhere in the plant. Therefore the cost reduction and capacity increase should have been made clearer.
thank you very much, we appreciate your interest.
Dwight
By: GBMP on August 17, 2012
at 11:35 am