Original Date: 02/19/2007
Revision Date: / /
Best Practice : Material Management
Raytheon’s Network Centric Systems Manufacturing Center in Largo, Florida, has a Material Management system that embodies an array of proactive process change initiatives targeted at streamlining the movement of material from the receiving dock to a destination within the facility. These diverse methods changes are collectively producing a more efficient operation that is better able to meet daily operational goals while fostering consistent process improvements.
The logistics of getting needed material from a delivery truck, properly accepting it into stock, then resolving disposition for that material can be a costly and time-consuming operation if left solely to reactive methods. While deliveries may be scheduled to arrive within some prescribed date and time frame, freight carriers control the physical arrival of material on the dock. The system must be responsive to this somewhat unpredictable demand while trying to effect actions during the process that will quickly move it to a state of process control. Using more people to assist during demand peaks might work, but it might also drive higher costs from staff underutilization in the lower-demand periods. In addition to the issues surrounding the labor-intensive nature of material logistics handling, maintaining and managing the material inventory is a significant cost driver based on estimates that 80% of product costs for products manufactured at the Raytheon Network Centric Systems (NCS) Manufacturing Center in Largo, Florida, is attributed to material costs.
Raytheon Largo has implemented several innovative process improvement initiatives to resolve the cost of moving materials to their destination, including the Logistics Dashboard that gives “real-time” visibility to operating parameters using data downloads at two-minute intervals. The dashboard provides a graphical representation using an automobile dashboard dial metaphor tracking the six major process steps of the dock-to-stock process as well as a color-coded indicator to show if the process is operating within the prescribed operational target goals. Since the program is Web-accessible, the performance can be monitored remotely, but of greater importance is the fact that the dashboard is projected to a large screen in the work area so that staff can quickly respond to processes that fall into the “red” condition. It is projected that the visibility afforded by the dashboard has facilitated a 20% increase in employee productivity and a 10% reduction in cycle times, which represents a significant improvement in overall traditional methods of trying to interpolate from historical data to determine what actions might improve performance.
A second initiative affecting the dock-to-stock process is the Supplier Barcode process – a cooperative effort between Raytheon Largo and its suppliers to ensure that packages shipped are marked with a barcode containing specified information. This smart barcode aids shipment receipt by enabling processing using handheld scanners in lieu of the traditional method of locating a shipping document and matching the information to a purchase order. The scanned receipt method has reduced receipt cycle time from an average of as much as 20 minutes using the traditional method to an average of 4 minutes. While the program is only six months old, 57% of all packages received have the necessary barcode. There is an ongoing effort to encourage additional supplier participation since the current result statistics are based on only 25% participation of the supplier base. To date, NCS Largo’s new process has allowed a 15% reduction in labor hours spent processing receipts and a 50% reduction in labor hours spent resolving “unreceivables” caused by difficulties reconciling shipping documentation with purchase order information.
MTrak is another Raytheon-specific, barcode-enabled tracking system that facilitates receipt, processing, and tracking nonstandard shipments not destined for the normal dock-to-stock process flow and inventory controls. These shipments are typically directed to the attention of an individual so as not to be entered into the production inventory. MTrak also provides a detailed tracking feature using the barcode location identifiers placed throughout the Largo facility. Whenever a package is processed under MTrak control, its location is scanned to capture locator information. Anyone interested in tracking a particular shipment is able to perform that function from the Web- based tracking utility. MTrak has proven its worth through both significant cost avoidance and labor-reduction impact.
A new Cycle Count process has greatly enhanced the inventory management auditing process. The specified inventory cycle counts needed to manage inventory accountability are being triggered by automatic downloads to the WaveTrak warehouse management system on a daily basis. All parts listed in inventory are categorized by A, B, C or G identifier codes to control the quantity of cycle counts conducted on a specific part number per year. Scheduling of the counts is an automatic system output that provides a blind count request to the inventory system operators. If the requested count does not match the total being carried in inventory, a second count is requested. If the second count does not match the expected total, someone from management must perform a root cause analysis with appropriate corrective action prior to completing the final adjustments. Between automating the daily count requests and implementing discrepancy procedural guidelines, inventory accuracy has risen to 99.3% and facilitated the elimination of one full-time position that supported the previous manual process.
Raytheon Largo developed a radio frequency identification system designated RFShip in response to contractual obligations. The system is fully integrated with APEX and Wide Area Workflow by design to allow advanced shipment notification to the government.
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