When an original equipment manufacturer (OEM) decides to implement lean manufacturing best practices throughout its processes the very first step is to assess the current standing of the factory. In order to eradicate excess waste and production slowdowns, first you need to identify where those issues are and what’s causing them. Ideally, an OEM should examine every aspect of the supply chain to find weaknesses. However, some areas are far more susceptible to waste creation than others. Prioritizing these high-waste areas first, helps achieve bigger wins earlier.

Below are a few of the most common areas you can look to find room for these big wins.

  1. Production downtime
    Time lost due to inefficient planning can lead to significant delays in delivery, causing costly downtime which can have a major effect on customer relationships. Seek out bottlenecks in the production process affecting plant productivity. Finding a way to make this area more fluid so there are no hiccups in production can improve efficiency exponentially. Critical to keep in mind is bottlenecks can exist anywhere in the supply chain, so it may be necessary to look beyond the factory floor to find them.
  2. Workforce efficiency
    In many cases human error may be essentially impossible to eliminate. That doesn’t mean, however, that employee productivity can’t be significantly improved. It’s good to keep in mind, though, that improving employee productivity is typically not a matter of individual employees simply working harder. Rather, focus should be on process improvement. The more variability and steps the higher likelihood for problems. Many OEMs dedicate significant labor hours moving inventory multiple times before consumption at point of use. Adopting a vendor managed inventory (VMI) empowers OEMs to redirect labor to higher-value tasks.
  3. Quality issues
    There’s a few important factors to consider when improving quality. Accurate assessment of the causes of time lost to defective parts and builds is one those factors. Lost time may be simply due to receiving an order of defective inventory or it could be due to an inefficient quality assurance process. Often overlooked, is accurately assessing whether the production equipment used to build a product is also the source of a quality problem. Mind Tools recommends measuring the amount of time spent finding quality issues as well as the effort that goes in to fixing these mistakes.
  4. Inventory supply
    Eliminating overstock is often delivers huge wins. Unfortunately, it is also an area which most OEMs simply overlook because the bulk of overstock items are nearly always C class (low-value) components and other “negligible” parts. These parts also happen to be the most common component category that causes stock outs. Because running out of something as simple as a bolt will shut down a line just as fast as running out of a high-value “A” item, the common, easy, but costly solution most OEMs adopt is to order more C parts than needed. It is vital to recall though, that too much inventory on hand is just as detrimental as no enough. Surplus inventory is essentially frozen money that can’t be used in other places. OEM VMI programs like Just-in-Time (JIT) inventory and Kanban inventory systems reconcile this conflict by simultaneously minimizing or even completely eliminating your on-hand inventory while also ensuring consistent, reliable inventory availability.
  5. Transportation
    Looking beyond the factory to the rest of the supply chain is also essential, starting with most immediate step beyond the factory walls – transportation. Excessive lead times for raw materials and critical high-volume parts like fasteners typically slow down overall production. Often, huge gains can be realized in processes that are often overlooked, such as receiving. Here again, working with a third-party supplier that can store excess inventory off-site but still be relatively close by can dramatically shorten the distance between your facility and the items you need to keep things running smoothly. Waiting for shipments to arrive from halfway around the world leaves far too much room for error.