Lean in: How Lean thinking could boost the critical parts supply chain
Judging by the packed conference halls I’ve seen across the world this quarter, I think it’s fair to say that Winter 2018 is ‘events season’ for the global field service industry.
I was among the thousands of professionals who travelled to attend flagship conferences – all connected by a ‘need to know’ the latest developments within our sector.
But, as I heard tales of pioneering innovations and technologies at, for example, exhibitions in the USA, and a user group event in the UK, I was struck that the processes behind our work are just as important as the technology which supports it.
Hearing about the increasing pressures and challenges affecting the field service supply chain, and the different ways organisations are seeking to address them, triggered a train of thought in my mind around the power of lean thinking.
The principles of Lean are clear. It’s a systematic way of checking every process to find and extinguish waste. By eradicating unnecessary spend, time and resources, organisations can focus on adding value to customers.
And this one methodology is so effective, it can be used equally well within a wide range of businesses, from office cleaning, to automotive manufacturing, or the delivery of complex highway schemes. All three of these tasks have been analysed, broken down into steps, designed and redesigned to be as Lean as possible.
For decades, service companies have seen the value in similarly systematically removing unnecessary delays, materials, labour and costs from their processes. And yet, as the events began to wrap up, it became obvious to me that Lean thinking could have played a part in the case studies I had presented, and the networking conversations I had enjoyed.
I heard over and over again that the pain points are there. For example, getting the right service part to the right place at the right time is so important that, ironically, some businesses seem wary of making strategic changes. We heard stories about excessive inventory or significant costs related to same-day distribution being left unchallenged because ‘it works’. We know from analysis carried out recently for one organisation that 65% of items sent to site using same-day transport were returned by the engineer as good stock.
It doesn’t take much effort to start finding waste in that process, but what are the seven types of waste in Lean, and how might field service industries start finding some waste to eliminate?
Based on my experience at 2018 field service events, here are some examples, and how our customers are going about eliminating them:
Transport: Unnecessary movement of people or parts between processes
We saw one company save 640,000 miles of driving by delivering parts to app lockers at service sites, instead of using dispersed forward stocking locations (FSLs).
Inventory: Excess raw material or finished parts
Another firm had more than £1 million-worth of duplicated stock sitting in repair engineers’ vans.
The company cut spend significantly, by storing items specifically required by each location in secure on-site lockers
Waiting: People or parts waiting for the next step of a process
45 minutes per day, per engineer – that was the average waiting time saved by one organisation when it replaced PUDO collections with public locker collections.
Motions: Unnecessary movement of people or parts within a process
In our experience, the most advanced firms enable engineers to order parts for direct delivery, using a mobile app. This eliminates the unnecessary and inefficient movement of thousands of parts to and from warehouses, and can even enable firms to remove entire FSLs from their supply chains.
Rework: Correction or repetition of a process
Forward-thinking firms also use mobile apps to assign condition codes for parts which need to be returned. This allows items to be directly routed to repairers, rather than return to the warehouse for evaluation. We’ve seen this contribute to a 40% reduction in total inventory for some firms, as well as a reduction in processing resources.
Overproduction: producing sooner or in greater quantities than customer demand
We saw one corporation reduce duplicate inventory by consolidating a UK stock-holding into a European warehouse. Delivery lead times and customer service levels were maintained by exploiting scheduled flights, and pre-8am distribution to lockers.
Over processing: Processing beyond standard required
Implementing a dedicated delivery point at a secure site reduced same-day transportation costs by 80% for one customer. In this use case same-day delivery was only used to ensure early next day availability.
It’s important to remember that the benefits of Lean thinking go above and beyond reducing waste, and into adding value to customers. For example, eliminating unnecessary movements often reduces overall lead-times -which in turn reduces risks to SLA compliance. And reducing transportation waste further supports carbon reduction targets.
I don’t pretend to be an expert in Lean thinking, however, as we seek to meet ever tighter service level requirements while simultaneously reducing costs these examples serve as reminders that there is plenty of waste to find if we go looking for it.