May 2010 | Commentary | IT Matters

Crack the WIP for a Leaner Supply Chain

Tags: Logistics I.T., Lean

David Phillips is director, sales engineering, at Zebra Technologies, 810-610-8520

As the nation begins to emerge from the economic downturn, companies are focusing efforts on reducing costs and streamlining work to prepare for the increased demand recovery will bring. Implementing a lean culture to eliminate waste in every area of the value stream will be a key focus for many operations.

At the core of this lean thinking is eliminating excess work-in-process (WIP) waste from the supply chain. WIP commonly refers to an unfinished product that is unable to provide a return on investment. In today's tough economy, WIP is a serious issue for manufacturers because it ties up capital that could be used to generate revenue.

When WIP is not managed properly, it can create waste in the form of idle production, added cost from expedited shipments, defects and quality issues, non-value-added processing, and excess motion resulting from additional inventory checkers.

Traditionally, WIP is tracked manually, which severely limits visibility into the project's status and increases operating costs. This dated system only makes documents readily accessible to a few employees, so gathering complete and centralized data, and determining the real-time status of WIP, is almost impossible.

Despite the critical need to track WIP to identify and eliminate waste, it is commonly overlooked as a problem when assessing supply chain goals.

MAKING A CHANGE

In order to transform their bottom lines, manufacturers need to make a change. Realizing the impact WIP can have on the entire supply chain, some companies are using real-time locating systems (RTLS) to support lean manufacturing processes and address WIP issues.

RTLS solutions that track and manage WIP combine three functions. They:

  • Provide locations for WIP and available work areas where WIP is to be processed.
  • Model the flow of manufacturing and/or business processes, determining—either by process or movement—what to work on next.
  • Create an executable output that helps workers understand what product needs to be moved, where it is located, and where to move it next—ensuring that the correct WIP is being moved into an operational area where it can be worked on, and that work areas do not starve for product.

COMMUNICATION TOOLS

These three functions also work to open lines of communication throughout entire supply chains, making teams more efficient. Through electronic messaging, automatic alerts, and shared real-time visibility, RTLS keeps data centralized and teams on the same page with WIP status, reducing communication delays and search time. By centralizing all asset information, RTLS also provides actionable data to decision makers throughout the manufacturing value chain.

Timely information aimed at delivering visibility of materials such as WIP is key to improving supply chain efficiencies and lean operations. Implementing RTLS can help position manufacturers to accommodate the growth spurred by an economic recovery.

With promises to reduce cost and streamline work, companies will continue to implement lean strategies supported by technology to prepare for increased demand in the coming years.