Suppliers slash lead times, rev up performance with Accelerate

Suppliers Slash Lead Times with Accelerate

Paul D. Ericksen, Program Manager, MEP Supply Chain Advantage

The Wisconsin Manufacturing Extension Partnership’s  (WMEP) Accelerate program has a positive 10 year track record of reducing supplier costs while increasing their order fulfillment agility.  Accelerate is based on using proven Lean techniques to reduce true lead-time, known as Manufacturing Critical-path Time (MCT). 

MCT is the typical amount of calendar time from when a customer creates an order, through the critical path, until the first piece of that order is delivered to the customer.
Accelerate is a focused, efficient approach  designed to help suppliers implement Lean techniques through MCT reduction.  A typical Accelerate project consists of:

• A pre-session planning meeting facilitated by WMEP.
• A two-day session during which “current” and “future” state maps are created of the targeted product value streams, as well as project plans for transitioning from the “current” to “future” States – with guidance by WMEP’s manufacturing specialists.

The project plans usually take from 3 to 6 months for  suppliers to complete  with WMEP assistance as needed.

A decade of experience with more than 400 suppliers and over two dozen OEMs across a wide spectrum of industries shows that initial Accelerate projects can cut “true” lead times in half while at the same time slashing waste.

How much impact can a 50% reduction in MCT have?  A recently completed study for the U.S. Defense Logistics Agency showed that 195 Department of Defense Accelerate suppliers achieved the following project impacts on average:

• A $132,000 reduction in raw, WIP and finished goods inventory, accompanied by improvement in on-time deliveries (as measured by their customers).
• A $98,000 reduction in internal quality related wastes, accompanied by an improvement in as-delivered quality (again, as measured by their customers).
• A $75,000 reduction in other direct operational Costs.

In addition,  the MCT reduction was found to significantly increase suppliers ability to react to quick-turnaround orders with less compromising of overall shop performance.  And the bottom line was that the above improvements were produced without significant capital investment!

Suppliers who reduce waste on an ongoing basis are well positioned to support OEM cost reduction programs without compromising margins.  Similarly, suppliers with shorter MCTs can support OEM on-time delivery expectations without high levels of pre-built inventory, since they are no longer as dependent on demand forecasts.

OEMs know that a vital key to competitiveness are competitive suppliers.  Further, they also understand that increased engagement with suppliers is the most effective means of producing a world-class supply chain.

The above all point to Accelerate as an excellent vehicle for facilitating increasing competitiveness, both at the supplier and OEM level.

As Jack Hardin, CEO of In Tolerance, Inc. (a job-shop supplier to Rockwell Collins) said after completion of his first Accelerate engagement, “Accelerate has revitalized our operation, saved time, reduced costs and reduced waste.”

If you would like to learn more about Accelerate, please contact your WMEP Manufacturing Specialist or Andy Hayner at 608-234-1956 or hayner@wmep.org.

Click here to download "Common Ground" - a white paper by Mr. Ericksen

Click here to read the In-Tolerance Accelerate Success Story