The company fabricates granite countertops for residential and commercial clients. A market survey revealed that it was only getting half of the orders available from its current clients. The company needed to find a way to differentiate itself in the market. Further analysis revealed that typical lead time in the market for stone countertops was running 6-8 weeks. This company was no exception. If it could significantly shorten its lead time, it would pick up the majority of the available orders from its current clients.
Additionally, the company was struggling with the impact of a 6-8 week lead time in its plant. Essentially 6-8 weeks of orders were in various stages of completion throughout the operation. This large volume of incomplete orders was creating chaos throughout the company.
A scheduling system was implemented that focused on the final installation process as the capacity constraint. Orders were not released into the plant if installation didn’t have the capacity to process them. Also, orders were not released into the plant if they weren’t absolutely ready for fabrication – all customer decisions were documented, the site was ready for template, and the slabs were on site. Installation processes were also modified to maximize the time spent by install team actually installing countertops.
As a result of the improvements, the number of orders in the plant at a given time was greatly reduced - along with the level of chaos. Lead time dropped from an unpredictable 6-8 weeks to a consistent 5 days. Capacity of the plant increased 30% with no additional labor. The company was able to pick up additional work from its existing clients as well as taking on new clients. Profits soared and, with the increased business, the owner decided to build an additional plant some miles away to both handle the additional orders and to reduce travel time for install crews.