Pull-based system leads album maker to shut off MRP functionality
By Staff -- Manufacturing Business Technology, 12/1/2005 12:00:00 AM
Back in 1998, when Ole Dam was made operations manager of St. Cloud, Minn.-based Creative Memories—a direct-sales manufacturer of customized scrapbooks and photo albums—he knew exactly what to do.
A lean practitioner for almost 25 years, Dam asked the company's chairman to attend a four-day course at JCIT International, which since 1985 has trained more than 90,000 students in the intricacies of Demand Flow Technology—a demand-led, mathematics-based approach to lean manufacturing. "I wanted him to know what was going to happen to his company," explains Dam.
The result was Dam had a free hand to do as he wished, and subsequently he sent every manufacturing manager and supervisor to the same four-day course the chairman attended.
Seven years on, a significant transformation has taken place. Even today, every newly hired or promoted supervisor attends the course, while some senior engineers and other specialists have attended more advanced courses.
Sales per manufacturing employee have increased 8 percent a year, year after year. Plant throughput time—which, based on batch manufacturing processes, was more than three weeks—has come down to 10 minutes—with work-in-progress levels falling by 80 percent, despite volume increases. The area of the company's 316,000-square-foot facility devoted to manufacturing was reduced 70 percent, providing opportunities for the company to buy other businesses and move their operations into the freed-up space.
The systems landscape has changed, too. While the broader business relies on an SAP enterprise system, "We turned it off in manufacturing after the first year," recalls Dam.
"Many businesses struggle with the idea of switching off MRP [material requirements planning]-based replenishment, but Creative Memories is a good example of how it can work," notes Tony Gorski, COO, JCIT International.
Lean manufacturing and IT applications often are judged to be awkward bedfellows, but the experience of Creative Memories suggests that while traditional manufacturing applications may be inappropriate, the tools to better exploit lean's capabilities elsewhere in the demand chain are not.
