Increasing service level and reducing delivery times

Our client produces and maintains Engine Control Systems for civil and military aircraft. Customers were complaining about poor performance and as a result, their market share was decreasing significantly.

Initial performance levels were:

  • Service level is less than 30 % and only one PC board exceeds 50 %
  • Turn Around Times remain between 40 & 50 days compared with a 15 day contractual commitment
  • Promised due dates are regularly postponed
  • Delays have resulted in a doubling of the inventory level
  • Customers are transferring business to a competitor whose market share has trebled

Several internal initiatives have failed during the previous 18 months.

Our approach

The client Executive Committee set us ambitious objectives:

  • Improve the service levels to the target levels within 6 months
  • Enable improvements to be demonstrated in order to retrieve customer confidence
  • Achieve 95% service level in 2 years

After an evaluation of the current situation allowing us to identify the root causes, we addressed

1. A list of "Quick Wins" focusing on an important, high volume pilot product. This restored a level of internal confidence and enabled the client to demonstrate the improvements to customers. This was achieved in only a few weeks.

2. Our experts in business workflow and team-based structures worked with the client team to design a new business ‘blueprint’. The workflow through a new cell-based organisation with new working practices was central to the design. Devolvement of tactical decision making enabled workloads to be balanced, inventory to be used effectively and lead-times to be reduced. 

Key drivers for success were:

  • Implementation of a Pull signal based on standard SPT (Shop Processing Time),  visual controls implemented all along the process, with daily advance/delay measures
  • Introduction of shift meetings based on real customer demand
  • Use of LEAN tools by work-teams - particularly 5S, SMED, QRCC
  • Devolvement of tactical decision making to teams with an escalation procedure allow operator to ask for management support
  • Implementation of Real Time / Daily / Weekly metrics to facilitate people awareness and involvement
  • Improvements in communication and rewards

Client benefits

The level of benefits and speed of implementation increased our client’s performance ranking with his most important (aircraft builder) customer - moving from bottom of the list to near the top in 10 months. Similar improvements were reflected with other customers.

Remarkably, our client was able to roll-out these business benefits to all other product lines in 6 months.