Value Stream Mapping Saved Consumer Goods Manufacturer $1.6 Million In Costs
Situation
Our customer was experiencing several issues in their supply chain from conflicting pick-and-pack procedures, increased costs due to overreliance on short-distance LTL freight shipments, and an alarming amount of shipping errors (mislabeling, wrong counts) leading to more costs for the customer.
Actions
The MetaExpert worked full-time for the first 6 weeks and accomplished several process improvements utilizing value stream mapping and cross-functional waste walks:
- Developing standard operating procedures (SOPs) for the customer's distribution warehouse to avoid mislabeling costs
- Troubleshooting the customer's value stream and pick-and-pack process
- Providing Operations and Lean consulting
- Improving demand scheduling to reduce work loss
Results
After deploying several waste-cutting measures the MetaExpert and the customer saw resounding success from transitioning nearby supplier shipments and inter-warehouse traffic to smaller trucks. This reduced LTL costs, eliminated scheduling and shipping errors by transitioning from manual label data entry to label barcode scanning. The result was reduced past-due costs, quantifying process flows that could be reduced, quantity errors, mis-shipments and past-due orders.
The MetaExperts® initial contract was 6 weeks and due to surpassing goals, the contract was extended to 6 months.
The next improvement phase included cross-team OpEx mentoring and consultation which led to an additional $1.6 million in defined cost savings.
Return on Investment
- Decreased past-due orders and costs by 70% in first 6 weeks
- Decreased reliance on LTL shipments by 50%
- Saved $1.6 million in costs during additional 6 -month consultation period
Project Details
Client Skills Required: OpEx understanding and deployment, SOP (standard operation procedure) development, lean, root cause analysis, process mapping, 5 Why, waste walks, time studies, program management, cross-functional team leadership, measurement development, stakeholder collaboration, Agile process management, JIT procurement
Contract Length: Initially 6 weeks, extended to 6 months
Support by MetaOps™, Inc.: OpEx mentoring, coaching, and implementation