“It happened again,” Peter grimaced. “We just got a large order with a tight deadline. We went to expedite the order and turns out there are projects stuck in the middle of our system.”
“What do you mean stuck?” I asked.
“I mean stuck,” Peter replied. “We run a just-in-time shop. We don’t order materials until we have a project, and some of those materials have lead times, so we have a bit of coordination to do. If we have a material with a three day lead time that we can’t schedule that project for tomorrow.”
“So, what’s the problem?”
“Supply chain. We know we will have the material in three days, so we release the project to the floor so when it’s time for those materials, the materials are there. Until they’re not. We found out that material is out of stock from our supplier with a three week lead time, not three days. But the project is already on the floor. Without the material, the project is stuck. And, it’s big and heavy, stuck in a staging area waiting on material. We can’t move around it, we can’t move over it. It’s stuck. Now, we have a highly profitable project, lots of gross margin that we can’t start because the other project is stuck on the floor, for the next three weeks.”
“How often does this happen?” I wanted to know.
“With supply chain the way it is, more and more,” Peter shook his head.
“What have you learned so far, about what to do and what not to do?”
“Well, for one thing, never release a project to production until we have all the materials in hand. That will keep things from getting stuck. Also, a couple of workstations are very quick and sometimes get ahead of themselves, pushing out too many assemblies, stacking them in the way. The guys in that work cell are so proud of their output, they don’t see they create a problem. I think we may have to idle that process during portions of the day so things don’t stack up. Weird that I would have to tell that team not to work so hard.”