Knowing stock on hand is key measure to success
By Rafael Gerena-Morales
Lingering doubts about the economy's turnaround have also imposed
austerity on manufacturers such as Lighting Components and Design.
The Deerfield Beach Company, however, has managed to push down its
inventory of lighting parts for autos and vacuum cleaners partly through
the adoption of just-in-time practices.
Today, the manufacturer carries about four days worth of auto-related
lighting parts, compared with 12 days of goods two years ago; inventory
for lighting parts used in vacuum cleaners are down to three weeks,
from five weeks in 2001. Together, the reductions have cut Lighting
Components' inventory costs by roughly $625,000 in direct and related
expenses including buying, storing, counting and inspecting goods.
And automation-led productivity gains allow the manufacturer, with
annual sales of $20 million, to cut inventory, even as it grows about
15 percent a year.
"Too much inventory is evil," says Jon Cooper, president
of the 250-employee firm. "The more you have, the more you have
to manage, and the more you have to pay to finance. I don't see the
[nation's] economic pie getting bigger. Our inventory has to be as
lean as possible.”
On the shop floor, Lighting Components' workers team with multitasking
automatons to mold plastic parts, weave tri-color wiring, and snap
together lighting pieces. A shop floor clean of grease and debris,
and symmetric lighting above, give the plant the aseptic feel of a
science lab. Inventory rests in corners, stored in vertical carousels
that spin on demand, giving workers speedy access to parts often whisked
away in two or three days.
Off the shop floor, Lighting Components' computers are busy communicating
with the manufacturer's vendors and customers about sales and inventory
data via Web sites, e-mail and other methods.
Recently, one of Lighting Components' customers sent an order via
e-mail, which it does every weekday at 8:30 a.m., stating it had used
1,250 license-plate lights on Chrysler minivans it equipped the day
before. At 9 a.m., Lighting Components replied by e-mail that it would
fill the order, which was prepared a half hour later, and out the door
on FedEx trucks by 5 p.m. The order was delivered two days later.
The same customer also sends Lighting Components 90-day minivan production
forecasts, which it gets from Chrysler. This gives Lighting Components
time to talk to its suppliers about near-term needs, synchronizing
supply-chain harmony.
Even though Lighting Components' inventory chain is tight, there's
one part of business Cooper realizes he can't control: the economy
at large. That's why, as he looks at the future with concern, he continues
to squeeze inventory.
If the
economy "shuts down, I don't want to have months of stuff
on hand," Cooper says.
About
Lighting Components and Design, Inc.
For further information about LC&D: who we are, what we do, company history, ISO/TS 16949:2002, recent developments, etc.,
click here.
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