WIP Inventory accuracy fix and turnaround
Fortune 500 Global automotive supplier
Delivery of high-value automotive components was jeopardized by continuous line stoppages at the final assembly modules, causing multiple misses in committed deliveries and hundreds of thousands of dollars of additional expenses in premium freights and customer penalties. These stoppages were caused for errors in the amount of RTA (ready-to-assemble) components reported in the work-in-process (WIP) inventory used for production schedule and shipment commitments to customer.
This situation had months in occurrence with over 15 incidents of line stoppages per month and were not showing signs of improvement despite numerous strategies, expenses, and frustration at the top plant leadership, mainly caused to a persistent culture of point-fingering and low level of engagement and ownership at the mid-management levels and below.
Despite initial skepticism, PRAXMA was awarded the full ownership of the WIP Inventory accuracy to get it in control. Given the criticality of the situation, PRAXMA immediately assigned their own cycle count personnel to avoid culture contamination and ensure inventory accuracy, capture process data, and start reporting reliable data ASAP.
In parallel, PRAXMA consultants were analyzing the variation causes, implementing corrective actions, improving, and automating data capturing methods and reporting to ensure process repeatability over time.
Within 6 months, the process was turned around from being the biggest concern for the plant, to be a smooth process with only one incident of line stoppage in 90 days, and with no related premium expenses.