Rebuilding the KSC Supply Chain, Combining Lean and Quality Tools

Contacts:

SupplyFORCE.com
Contact: Mark Cassidy, VP Phone: 716-721-0045
e-mail: Mcassidy@supplyforce.com

Eastman Kodak Company
Contact: Mark Morris Phone: 716-722-6726
e-mail: Mark.Morris@Kodak.com
Contact: Tom Frew Phone: 716-722=1125
e-mail: Thomas.Frew@Kodak.com

Operations Consulting Service
85 Corral Drive
Penfield, NY 14526
Contact: Donald Albright, President
Phone: 716-737-9566
e-mail: ocs4results@frontiernet.net

Company Profile:

SupplyFORCE.com: is an MRO integrator with corporate offices in King of Prussia, PA. The company provides complete MRO cataloging, e-commerce and fulfillment for such companies as Eastman Kodak Company, General Electric and Strong Memorial Hospital. Eastman Kodak Company is a global manufacturer of digital technologies, cameras, film, chemicals and papers. This project was focused at the Rochester, NY MRO operation. Operations Consulting Service (OCS) is a lean enterprise and quality consulting company partnered for the project. OCS is an affiliate of the Total Business Solutions group.

Situation:

SupplyFORCE.com is an MRO integrator with 25 Western New York affiliate distributors networked to support the Kodak Supply Contract (KSC). The KSC items encompass over 40,000 stock keeping units (SKU’s) many with no activity for over two years. The contract commands stringent delivery requirements. The delivery requirements range from a P1 (2 hours delivery), P2 (next day delivery by 7:00 AM), P3 (24 hour delivery) and others with less demanding requirements.

The following chart is a histogram representation of the percentage volume of transactions by delivery priority. On the average there are 6,142 transactions per week for KSC items. An overall 95% on-time delivery is required per the contract.
To improve the delivery process the current state supply chain was Value Stream Mapped, illustrated in the following diagram.

In addition, the customer order pattern was examined using a histogram of orders versus time of day. This was very revealing to see that the P3 (delivery in 24 hours) that over 50% of the orders came in between 6:00 AM to 8:00 AM and therefore had the same delivery requirements as the P2 orders (delivery by 7:00AM). Therefore the delivery process developed for the P3 and P2 had to be the same.


Other quality and lean tools utilized were value stream mapping the supplier fulfillment process and benchmarking best in class suppliers.

The current state hand-offs and steps documented during this process and summarized in the table below are the P3 delivery process data.

In addition, a Management by Fact (MBF) was developed to track the delivery performance metric, determine the root cause for poor performance and institute corrective action system. A pareto chart was utilized in this MBF corrective action process.

Utilizing a team concept and by combining tools of quality and lean enterprise a solution was developed and implemented.

Results:

The results of this project, documented below, were significant. Not only was the value stream shortened, hand-offs reduced and the percent value-added time increased, but both Eastman Kodak’s processes and supplyFORCE distributors improved. Thus providing a compounding effect for other customers served by the distributor network.

A future state Value Stream Map was created to improve the entire supply chain. See illustration below for an e-commerce solution.

The number of steps and hand-offs were reduced as summarized in the table below.

The on-time delivery performance improved 6% to 93%, still below the contract requirements but an improvement. See chart below from MBF.

Best of all, the implemented solutions were visible to the end-user as indicated by a Customer Satisfaction improvement of 30% during this implementation process as documented by a customer satisfaction survey.

In summary, combining lean and quality tools is a win-win solution to improving your supply chain and business processes. Eastman Kodak Company, supplyFORCE and Operations Consulting Service continues on their improvement quest with projects to improve delivery performance, EKC Receiving, Kodak Rochester Transportation and supplier processes with a goal of moving to a total e-commerce solution for the MRO purchasing activity.

For questions or further information please call or e-mail the contacts listed at the beginning of the article.

<Top>