Intelligent Manufacturing € April € 1996 € Vol. 2 € No. 4

Focusing on Customer Service Puts Bimba Back on Track

Bimba Manufacturing (Monee, Ill.), a manufacturer of pneumatic actuators, has initiated a program designed to improve planning and control processes while greatly enhancing its customer service. The company has implemented continuous improvement processes (or Just-In-Time for manufacturing) to support manufacturing resource planning (MRPII). The continuous improvement environment identifies opportunities to cut waste and eliminate non-value added activities, while MRPII provides the processes to effectively execute the initiatives.

Bimba produces stainless steel body cylinders for use in various types of machinery, such as photocopiers, packaging machinery, industrial sewing machines, and agricultural equipment. The company's products are typically a $25 to $50 component of a finished product costing thousands of dollars. "Our customers wanted to be able to order from us at the last moment and get it the next day," explained Paul Smith, Bimba's manager of manufacturing planning. "They wanted to be able to set the specs just before they were ready to build the finished product."

The problem was that Bimba had no formal system for promising delivery dates to its customers. Mostly it quoted industry-standard delivery of one week for stock items, and four to six weeks for non-standard items. Obviously, this level of service was somewhat less than what Bimba's customers were looking for. What's more, according to Smith, "When we started actually measuring delivery time, we found out shelf items weren't going out in a week. For non-standard items, maybe it shipped in four to six weeks, maybe it didn't."

Working with The Oliver Wight Companies (New London, N.H.), a manufacturing management consultancy, Bimba set out to overhaul its business processes. "In the past," Smith said, "sales created a forecast, but we had no way of tying it to actual manufacturing requirements because so much of our business is non-standard items." Planning bills are now used to forecast standard parts usage for the non-standard items, and surrogate part numbers were installed to represent non-standard parts.

"Now, when the forecast changes, we can predict what the effect will be on all manufacturing areas," Smith continued. "That information is used for hiring and equipment purchase requests."
As a result, customer service has been enhanced dramatically. Lead times for non-standard items have been reduced from 4-6 weeks to less than 1 week. Stock items are down from 1-2 weeks to 1 day.

Prior to implementing MRPII, Bimba couldn't measure on-time delivery performance and most customer orders had no promise dates. To correct this situation, Bimba set out to develop partnerships with suppliers. With on-line access to Bimba's planning data and the authority to make changes, suppliers deliver only what Bimba needs, rather than according to open purchase orders. As a result, all orders now get promise dates and supplier on-time delivery performance has increased from 40% to 95%.

Scheduling has also improved. Previously, shop floor operators chose what work to run by independently picking among multiple open work orders or when a supervisor indicated an item needed to be expedited. They attempted to circumvent this problem by dating "hot" items with the previous year. However, this simply invalidated the dispatch lists. "Hot lists" have been replaced by a real dispatch list. Jobs now run from top to bottom and operators have confidence in priorities.

Capacity planning has helped Bimba prepare capital and expense budgets for 1996 and beyond. "In the short term," Smith noted, "capacity planning has helped us best allocate the existing capacities of our manufacturing areas and suppliers," and likewise helped the company reach its customer service goals.

Shortened lead times and realistic delivery promise dates have enhanced customer satisfaction while helping Bimba realize financial payback as well. In the three years prior to implementing MRPII, sales rose just 15%. Since then, sales have grown 68%. In fact, last year the company reported a 50% greater sales increase than the industry average.

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