Executive Summary

Business Case
Lead time improvement would result in more satisfied customers by getting
their customer service ordered parts more quickly. Additionally, if we are not
able to decrease our total lead time, it could damage our reputation with
customers. Finally, total lead time improvement could translate to cost
reductions by improving efficiencies.
Root Cause Analysis
Data shows that wait times are the main causes for lengthy lead times. Wait
times concerned with unbalanced workloads and insufficient inventory are
very high and are problematic.
Solutions Implemented
For insufficient inventories, Kanbans were implemented to signal the need
for re-orders so that no stock-outs would occur. For unbalanced workloads,
cross-training took place for the warehouse workers so productivity could be
increased and wait times lessened.
Project Results
Freight cost decreased by 8% with addition of Kanbans that have eliminated
stock-outs and need for expedited shipments.
Graphical Display of Improvement

Key Takeaway: The project was very successful. We were able to

identify root causes and address them with solutions that translated
to faster lead times, money saved and happy customers!
DEFINE PHASE
Project Charter

Project Name: Customer Service

Replacement Part Lead Time
Problem Statement
In the last 6 months we have been receiving customer complaints about how
long it is taking for customers to receive their spare parts after placing an
order. The current lead time for parts is 7-10 days.
Goal Statement
Reduce the average time to deliver spare parts orders from an average of
8.5 days to 5 days or less by May 5th.
Scope
 First Process Step: Customer places order via website or by phone
 Last Process Step: Deliver order to customer
  In Scope: Process steps, warehouse layout, length of process time,
vendor management, cross-training
 Out Scope: System upgrades and additional hiring
Business Case & Benefits
Lead time improvement in our customer service spare parts orders would
result in an enhanced client experience. Lead time improvement could also
translate into monetary benefits because we may process orders faster
thereby increasing the likelihood of retaining our customers. Finally, money
could be saved by improving processes that will help to eliminate expedited
shipments to customers.
Timeline
Phase Planned Actual

Define March 1 March 5

Measure March 16 March 19

Analyze April 2 April 2

Improve April 16 April 20

Control May 5 May 4

Team Members
Time
Positio Commitmen
n Person Title t

Team Green Belt

Lead Jared Candidate 20%

Sponsor Brad Manager 20%

Team Warehouse
Member Stacy Staff 15%
 Team Raymo Warehouse
Member nd Staff 15%

Team Customer
Member Ricky Service Staff 15%

Key Takeaway: Lower lead times result in happier customers.

SIPOC

Key Takeaway: The scope of the project is from the moment we

receive the customer order to the moment they receive their spare
parts delivery.
As-Is Detailed Map Segment

Key Takeaway: Process walk revealed that orders were walked to

the warehouse and two non-value adding checks are in place. Also,
with one worker for pick & pack and one for shipping, orders usually
end up waiting due to lack of resources.
MEASURE PHASE
Data Collection Plan

Key Takeaway: With exception to order checks, this is a cycle time

project, all of the measures turned out to be continuous measures
of different segments of time.
Baseline Data – Project Y

Key Takeaway: Lots of variation in the process and the average time
to deliver is 8.5 days which is very high!
Baseline Data – Spare Part Order Lead

Key Takeaway: Customers want delivery in 5 days or less, so the

spare part delivery process is clearly not capable.
ANALYZE PHASE
Fishbone Diagram

Key Takeaway: The biggest areas to analyze further were inventory

location, pick & pack, delivery, and worker habits.
Map Segment Showing Analysis

Key Takeaway: Process changes include cross-training customer

service.
As-Is Detailed Map Segment

Key Takeaway: There’s significant waste of motion and a need to

consolidate the spare part inventory from six into two or less aisles.
Vale-Added Flow Analysis

Key Takeaway: Biggest opportunity is to remove wait time from

checking inventory. This is the average time delayed due to
insufficient inventory.
Root Cause Hypothesis

Key Takeaway: Data confirmed all the hypotheses except for order
check – it does not contribute significantly to total lead time.
IMPROVE PHASE
Selected Solutions
Key Takeaway: There was no buy-in to add spare parts orders to the
ERP so the team focused first on cross-training which resulted in
enhanced teamwork.
“To Be” Map Segment

Key Takeaway: Process has been streamlined to have inventory

checked at beginning of process to avoid delays.
Spaghetti Map

Key Takeaway: We’ve drastically reduced the amount of motion by

storing inventory in only two aisles.
Run Chart Showing Improvement

Key Takeaway: Improvements that addressed insufficient inventory

and also workload balancing helped drastically lower lead time and
lessen variation.
CONTROL PHASE
Project Closure

Scope
 Do the process walk with everyone involved so that brainstorming will
yield better results.
 Don’t draw any conclusions before you measure and analyze the data.
 Do make sure you monitor the results during the Control Phase to
avoid slipping.
Customer Impact
 Customers are receiving their orders faster.
 We’ve received less complaints which frees up customer service and
also makes them happy!
 Kanbans resulted in less stock-outs which makes retailers happy since
customers are not contacting them angrily.
Final Calculations
 Freight costs decreased by 8% with addition of Kanbans that have
eliminated stock-outs and need for expedited shipments.
 Cross-training resulted in less wait time, higher productivity, and
orders being processed faster.
 Warehouse workers are less tired as a result of the physical inventory
shift and re-organization.

TRY IT FREE

Reducing Lead Time In Customer Replacement Part Orders By 41% With

GLSS

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Case Study

Reducing Lead Time In Customer Replacement Part Orders By 41% With

GLSS

GoLeanSixSigma.com Green Belt Jared Krehel’s Project Storyboard illustrates

the project team’s success reducing lead time in a process delivering
customer replacement parts. The goal was to reduce the lead time from
order submission to order delivery from 8.5 days to 5 days or less. As a result
of this project, customers were delighted, complaints reduced, and the team
also enjoyed a reduction in freight costs by 8%. The goal was met in two
months time.

Process analysis revealed wasted motion, disorganized inventory, and non-

value-added activities. There were five potential root causes identified, four
of which were confirmed by data, and one was refuted. These validated root
causes led to efficiencies in time and motion, the implementation of a
kanban system to manage inventory, cross training/load balancing, and the
elimination of NVA activities.
A monitoring plan was established to track lead times and respond if they
become excessive. The improvements in this process can potentially be
applied to other processes within the organization.

– Susan Tighe, GoLeanSixSigma.com Master Black Belt Coach

Executive Summary

Business Case

Lead time improvement would result in more satisfied customers by getting

their customer service ordered parts more quickly. Additionally, if we are not
able to decrease our total lead time, it could damage our reputation with
customers. Finally, total lead time improvement could translate to cost
reductions by improving efficiencies.

Root Cause Analysis

Data shows that wait times are the main causes for lengthy lead times. Wait
times concerned with unbalanced workloads and insufficient inventory are
very high and are problematic.

Solutions Implemented

For insufficient inventories, Kanbans were implemented to signal the need for
re-orders so that no stock-outs would occur. For unbalanced workloads,
cross-training took place for the warehouse workers so productivity could be
increased and wait times lessened.

Project Results

Freight cost decreased by 8% with addition of Kanbans that have eliminated

stock-outs and need for expedited shipments.

Graphical Display of Improvement

Key Takeaway: The project was very successful. We were able to identify root
causes and address them with solutions that translated to faster lead times,
money saved and happy customers!

DEFINE PHASE

Project Charter

Project Name: Customer Service Replacement Part Lead Time

Problem Statement

In the last 6 months we have been receiving customer complaints about how
long it is taking for customers to receive their spare parts after placing an
order. The current lead time for parts is 7-10 days.

Goal Statement

Reduce the average time to deliver spare parts orders from an average of
8.5 days to 5 days or less by May 5th.

Scope

First Process Step: Customer places order via website or by phone

Last Process Step: Deliver order to customer

In Scope: Process steps, warehouse layout, length of process time, vendor

management, cross-training

Out Scope: System upgrades and additional hiring

Business Case & Benefits

Lead time improvement in our customer service spare parts orders would
result in an enhanced client experience. Lead time improvement could also
translate into monetary benefits because we may process orders faster
thereby increasing the likelihood of retaining our customers. Finally, money
could be saved by improving processes that will help to eliminate expedited
shipments to customers.
Timeline

PhasePlanned Actual

Define March 1 March 5

Measure March 16 March 19

Analyze April 2 April 2

Improve April 16 April 20

Control May 5 May 4

Team Members

Position Person Title Time Commitment

Team Lead Jared Green Belt Candidate 20%

Sponsor Brad Manager 20%

Team Member Stacy Warehouse Staff 15%

Team Member Raymond Warehouse Staff 15%

Team Member Ricky Customer Service Staff 15%

Key Takeaway: Lower lead times result in happier customers.

SIPOC

Key Takeaway: The scope of the project is from the moment we receive the
customer order to the moment they receive their spare parts delivery.

As-Is Detailed Map Segment

Key Takeaway: Process walk revealed that orders were walked to the
warehouse and two non-value adding checks are in place. Also, with one
worker for pick & pack and one for shipping, orders usually end up waiting
due to lack of resources.

MEASURE PHASE

Data Collection Plan

Key Takeaway: With exception to order checks, this is a cycle time project, all
of the measures turned out to be continuous measures of different segments
of time.

Baseline Data – Project Y

Key Takeaway: Lots of variation in the process and the average time to
deliver is 8.5 days which is very high!

Baseline Data – Spare Part Order Lead

Key Takeaway: Customers want delivery in 5 days or less, so the spare part
delivery process is clearly not capable.

ANALYZE PHASE

Fishbone Diagram

Key Takeaway: The biggest areas to analyze further were inventory location,
pick & pack, delivery, and worker habits.

Map Segment Showing Analysis

Key Takeaway: Process changes include cross-training customer service.

As-Is Detailed Map Segment

Key Takeaway: There’s significant waste of motion and a need to consolidate

the spare part inventory from six into two or less aisles.

Vale-Added Flow Analysis

Key Takeaway: Biggest opportunity is to remove wait time from checking

inventory. This is the average time delayed due to insufficient inventory.

Root Cause Hypothesis

Key Takeaway: Data confirmed all the hypotheses except for order check – it
does not contribute significantly to total lead time.

IMPROVE PHASE

Selected Solutions

Key Takeaway: There was no buy-in to add spare parts orders to the ERP so
the team focused first on cross-training which resulted in enhanced
teamwork.

“To Be” Map Segment

Key Takeaway: Process has been streamlined to have inventory checked at

beginning of process to avoid delays.

Spaghetti Map

Key Takeaway: We’ve drastically reduced the amount of motion by storing

inventory in only two aisles.

Run Chart Showing Improvement

Key Takeaway: Improvements that addressed insufficient inventory and also

workload balancing helped drastically lower lead time and lessen variation.

CONTROL PHASE

Project Closure

Scope

Do the process walk with everyone involved so that brainstorming will yield
better results.

Don’t draw any conclusions before you measure and analyze the data.

Do make sure you monitor the results during the Control Phase to avoid
slipping.
Customer Impact

Customers are receiving their orders faster.

We’ve received less complaints which frees up customer service and also
makes them happy!

Kanbans resulted in less stock-outs which makes retailers happy since

customers are not contacting them angrily.

Final Calculations

Freight costs decreased by 8% with addition of Kanbans that have eliminated

stock-outs and need for expedited shipments.

Cross-training resulted in less wait time, higher productivity, and orders

being processed faster.

Warehouse workers are less tired as a result of the physical inventory shift
and re-organization.