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TB Wood's Elevator Drive Component Castings for Inventory/Delivery Optimization
TB Wood’s worked closely with one of its major elevator industry customers
to develop a demand level-loading program for its castings. The customer
manufactures drive components and assemblies for many of the world’s largest
elevator manufacturers. TB Wood’s supplies raw, unmachined ductile and gray iron
castings for a variety of elevator drive components, including sheaves, rotors, and
housings.
TB Wood’s designed the program to smooth out production schedule requirements,
reduce lead times and reduce inventory costs for the customer, while improving
delivery performance and product quality for both the customer and TB Wood’s.
Large swings in the customer’s demand for castings throughout a given year
created manufacturing capacity issues which resulted in some late deliveries and
large raw casting inventories at the customer’s facility. (See Chart 1)
The new TB Wood’s level-loading program ties the customer’s casting inventory
directly to its production consumption, removing the need to forecast demand for
castings. (See Chart 2) This process was proposed and implemented with
only a few part numbers on a trial basis and has expanded to incorporate over half
of all part numbers with a phased plan to incorporate all part numbers.
Program Results:
- Present OTD for program: 98%
- Lead Time Reduction: 50% from 6 weeks to 3 weeks
- Inventory Reduction: 63% at the customer’s facility
- Inventory Space Reduction: 150 pallet locations at the customer’s facility
Chart 1: Comparison of a customer’s traditional ordering pattern (shown in red) and
the customer’s run demand (in green) on a weekly basis over a one year period.
Chart 2: TB Wood’s level-loaded demand program for the same work load is shown after
implementing a three-week replenishment process from consumption at the
customer’s facility. Customer weekly orders shown in red; TB Wood’s production
runs shown in green.
Highlights
- Custom demand
level-loading program
- 50% Lead time reduction
- 63% Inventory reduction
- 150 pallet locations
inventory space reduction