Lead time is always a concern for anybody selling product (or even services). Being able to deliver to your client shortly bring several advantages:
Of course it gives you advantage on the competition because a client always prefer to be delivered quickly. It also give you advantages concerning cash flow management. The shorter the delivery time, the less cash flow you normally need to allocate to finance your supply chain and your stock.
Below are a few tips about how you can attempt to reduce lead time when manufacturing goods in China and Asia.
1./ Increase parts production by increasing cavities number in your tooling
If you are manufacturing plastic or metal parts and that your parts are made with a tooling, you can simply increase the output of a production by increasing the number of cavities into your tooling.
For example, if you are performing injection molding with plastic part, then producing 4 parts instead of only one at each shot made by the plastic press will make you save a lot of time on production lead time (it will also diminished the unit cost of the produced part as you reduce the amount of time needed to produce individual parts). This is also true for metal sheet stamping and any other processes requiring machine with a tool.
Please note, that increasing the number of cavity on your tool will also make increase of your tooling cost. Indeed, if you increase the number of cavities in your tooling, it also meeans that your tooling may need to be bigger and the workmanship on the tooling will be higher has more cavities means also more workmanship when manufacturing tooling. So, it is all about trade off.
2./ Run simultaneous parallel production line
A solution to reduce lead time is to run several production line in the same time to spread the work in process on several lines. You are then facing the Theory of Constraints which constraints your throughput via the slowest producing process. In this case, you need to identify which process is the bottleneck and you then need to work on it to ask yourself how you can increase this process throughput.
Quite often a Value Stream Map analysis trough the production flow can help you to identify where the bottlenecks are located and how you can act on them to reduce their influence. A typical bottleneck in a production can be for example a plastic injection process: if your tooling have a restricted number of cavities, then you are restricted by the daily production of plastic part. You can have hundred of workers waiting to assemble parts, but if the plastic parts are not generated yet enough fast by the plastic press because the plastic injection process is too slow, then your hundred workers will simply wait to get fed with parts to assembly…
In China, when a factory is overloaded and doesn’t have enough production capacity, quite often they would subcontract the production to another factory in parallel. This is something I don’t recommend to allow because very often it will produce products which are not exactly same. The biggest catastrophic situation I heard about from people were almost always when the client had lost control on the supply chain and when the client supplier had sub-contracted the production to another supplier without letting the client knowing it.
3./ Control quality early in the production
If you are in rush to deliver, don’t wait the last moment to control the quality of your production. What I usually do is to perform some Initial Production Inspection and some During Production Inspection at the beginning and at the middle of the production (whatever it is for sub-assembly parts or finished products). It helps to see problems early and to solve them quickly before it become very difficult to roll back on correction. I usually send some quality inspectors to do so.
Much too often, importers will wait the last moment before shipment when the order is finished to start controlling the quality of their product. They do so because they hope to save money on quality control operartion thinking “If I inspect at the end I will be safe”. This is half true: it is safe because you don’t ship and pay your goods, but this is also unsafe because you will have difficulties to make your chinese supplier to rework the totality of a production.
Indeed, if problems are spotted at the end of the production, then the time to re-open and unassembly everything is not only time consuming (it will take time to reopen everything but also some time to reassembly and pack again), but also costly for the manufacturer (they will need to spend extra money on worker working time) who in turn is quite reluctant to operate correction.
So, don’t wait the end, control early. You can engage a third party inspection company in China as I do sometimes when I don’t have time to go myself to check goods or when our inspection team is not available because busy with other projects.
4./ Make your manufacturer working 24 hours with several shifts
When you select your manufacturer, make sure they have capability to run their production 24 hours with 2 or 3 shifts. Some manufacturers are sometime located in some area where there are constantly some power cut off.
I have also seen some manufacturers reluctant to make their workers to produce during night time because in this case they have to pay their worker with a higher salary, hence it eat up their margin. I remember a time I had to push strongly one of our supplier to make his worker during the night to finish an order on time. They were not happy but we delivered our customer on time and I left the factory at 4AM.
When auditing supplier in China or in Asia, make sure they have capability and willingness to work during the night if necessary to catch deadlines.
5./ Stock critical components and material in advance
It is hard to do it related to cash flow management, but it can be a solution to create a stock buffer for some strategic parts who can be difficult to source or procure.
A typical components subject to shortage are for example chipset and flash memories. Every year when approaching october-november months, there will be shortage of chipset such as CPU as manufacturers are producing full speed to deliver for christmas season. So the supply in chipset become low.
If you didn’t anticipate this, then you might experience shortage of one critical and essential component in your bill of material at this period of the year making that your product can not be finished.
I don’t recommend to stock all components, but I recommend to have a buffer for components who are critical and difficult to source or have a single source of supply.
6./ Use multi supply for standard parts
This bring to the point where you better build properly your supply chain with having back up suppliers for your parts. Make sure you have 2 or 3 suppliers capable to make your parts if necessary. This can help to anticipate shortage from one supplier by switching to another one.
7./ Optimize your value stream map
To make production faster, you can use Lean tools at your Chinese manufacturer facility and try to implement them on their line.
Sometimes, when I see how some manufacturers are implementing their production, I am really thinking they could do better and faster just by going down to common sense and bringing some improvement of little stuff: reorganizing a line to limit movement, changing the way some workers are seated, having some armrest to posistion components or parts with more accuracy
Identify the bottlenecks as explained before doing a value stream map analysis can help to accelerate a production by optimizing throughput.
8./ Limit transportation
If the suppliers of your parts or components are far located from your final assembler, then it add up on transportation time, hence on delivery time.
When sourcing for parts, you should try to identify some parts supplier nearby the final assembler, so that it reduces the transportation time.
This is not always easy because some suppliers in some area due to the higher living cost will necessary make the price of your product more expensive, whereas some other supplier in some “cheaper” area will low down their price due to low life cost.
You need to consider this trade off and working on it.
9./ Make sure the production line availability of your suppliers before starting your order
Before starting an order, you should review the planning with your supplier to make sure they have availability on their production line. If you are a small company and if you don’t represent a significant percentage of sales turnover for your supplier then you will not have priority on the production line. This is also one reason I like to work with small producer and smaller manufacturer: I have more leverage on getting priority when I order to them.
The typical case you may experience is this:
The supplier: “Sorry we have a big order for Wal-Mart, your order will be made just after” The client:”How many pieces do they have to do and how long it will takes to start my order ?”
The supplier: ” They are doing 100 000 pieces, this is a big order, we can start your order in 30 days”
The client: “Huh ??? But I have to ship in 30 days, not start order in 30 days!!!”
The supplier: “Yes but they are bigger than you, and they cover 80% of our sales turnover, so we give them priority”
The client (thinking): “I should have chosen a smaller manufacturer”
I learnt this in the past when I started managing orders in China when one of our manufacturer who was big and looks very reliable and stable made us wait 2 weeks before starting our orders. We had chosen them because they were big so we thought the quality would be good. Naive we were, quality was ok but the process to setup a line was terrible.
10./ Don’t play risky on the first order
If you have just achieved the process of New Product Development and are entering now in the manufacturing phase, then you are going to manufacture a new product for the first time, then don’t play risky on timing and delivery your own customer. You should forecast large. A first order, sometimes considered as a trial run is never perfect and this is always the time when some adjustments are made: tooling to adjust, jig to adjust, assembly technics to perfect, etc… This is also at this time that some small problems related to manufacturing can appear. Rarely, the first is order is optimized in terms of cadence and production speed. Give the time to your manufacturer on the first order to perfect and adjust their process for your product via a trial run first. They will normally will do it perfect on the second order.
I am sure I forgot and omitted some other tips ? What are your tips to improve production, manufacturing and delivery time ?