Over the summer I worked at a plastic company. The company both fabricates and distributes plastic. One of the first things I noticed when I first began working was how unorganized the workshop was. There seemed to be no specific method for keeping track of things. It took a significant amount of time to get raw material from the inventory because it was so unorganized.Most of us know that time is money, and in this case this company was losing money. The company believes that the most important thing they have to offer is delivering a quality product on time. I find it hard to believe that this company always lives up to that standard. In order to put out the right amount of parts, raw material needs to be cut on whatever machine is necessary to get the job done. If there is a lot of machine down time there is a lot of money being lost. In this case there is a significant amount of time lost while the operator is looking for raw material. I decided I would make an effort to improve this wasted time by creating a labeling system on the shelves that hold the raw material. I set up the shelves so that all of the raw material was grouped together based on both the type of plastic and the dimensions of it. Doing this simple little job made it much easier for the operator to find their material.
There was another issue that I also helped solve while working for the same company. In order to get material to customers, it is either shipped or picked up by the customer. Every time the customer picked up material, they charged the company $100. Even if it was 20 minute round trip it cost $100. Customers come and go multiple times a day. This means that the company was spending hundreds of dollars a day in order to make sure the customers received their parts. To solve this problem we decided it would be a good idea to invest in a box truck that could be used to transport the raw material to customers. After a little bit of looking around we found a used truck for a good price. Although the company had to spend a lot of money on the truck, it only took a few months to make that money back. This was a win-win situation because now the company was not being charged for getting the material out, and instead charging the customers a delivery fee. The only thing we had to spend money on was gas and maintenance. Although it seemed like a gamble at first it turned out to be a great idea. The comapny went from spending money to turning a profit by getting rid of the delivery fee. When I was not working in the fabrication department, I was driving that box truck to and from customers. Charging the customers $100 dollars for a 15 minute drive seems rediculous, but the customers don't ask questions they just pay!!
The supply chain is like the life line of any big comapny. The supply chain includes everything from truck driving delivery fees, to the actual product being sold. There are many different elements in a supply chain and in this case one of them was costing the company a lot of money. The delivery fee was costing the company hundreds of dollars a week. The whole point is that the supply chain was improved by figuring out how to get customers their goods and supplies while getting rid of a delivery fee. Efficiency was improved by getting rid of extra steps in the supply chain.
Chris Powers
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