Re-organising Operations & Facilities doubles business potential and improves On-time delivery
Fancy bicycles,were a huge money spinner for a leading bicycle manufacturer of India. But just 4 critical components, out of 34 required, were made in-house; while 30 were bought from other vendors. This made the business success largely dependent on sourcing of different parts from vendors, storing them, selecting right parts required for specific order and packing them before finally dispatching right carton for a desired bicycle in Completely Knocked Down (CKD) form to the dealer who requisitioned it.
Thus, the company’s Dispatch 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. The management then decided to seek expert help from Actuate Business Consulting (ABC), after exhausting all home grown options to improve performance of Dispatch Center.
After a critical review of operations, facilities,and available space, ABC recommended splitting up of the multiple tasks carried out in dispatch center. Thus creating two distinct groups, warehousing and packaging, with separate supervisors and demarcated floor areas for each.
Warehousing was completely re-organised 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. Specific locations were designated for each part in order to save search time.
Packaging operations were planned to be carried out on conveyor lines that set 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 these changes improved on-time delivery significantly and offered an opportunity to double fancy cycles business.
Delighted by the results, ABC was engaged for reviewing another production shop’s operations.