Lewis (Bill) Poole, CPIM
Lewis (Bill) Poole, CPIM, Eastman Kodak Company, Rochester, NY 14616, (716) 722-0543.
Each year at budget time, the standard question asked of the Materials Management group is why do you have so many people. Our answer had been we do not have enough people, with more people we could lower total cost and manage materials better. The inevitable standoff occurs with each side feeling the other does not understand the need for Materials Management services.
We decided to be prepared to answer the famous question of Dr. W. Edwards Deming "How Do You Know?" We wanted to show management we really did know our business and thus initiated a project to benchmark planning, purchasing and scheduling services of other companies. This paper shares not only the results of the benchmarking efforts, but also will provide techniques for getting started.
GETTING STARTED. As with any successful project, putting together a process is key to achieving the desired results: Our up-front process included:
SETTING UP A VISIT. The initial steps should include providing the company you wish to benchmark a list of the questions you wish to cover . Additionally, make sure you understand the business they are in and be sure to share with them your business. On occasion we have had a visit canceled as the other company found areas where we were in direct competition. In all cases, to minimize the costs to the other company, we agreed to visit their facility while extending an open invitation for a reciprocal visit to out plant.
THE VISIT. We experimented with several approaches. Initially we would travel the morning of the visit, attempting to get to their plant by 8:00 AM with plans to stay until 5:00 PM. While this approach proved adequate, we found arriving the day before and having dinner with the other company was more beneficial. This allowed us to:
A must is to write a trip report immediately and hold a debriefing session among those in attendance. At first, we focused on answering and getting answers to the data sheets we had set outlined. We also found interesting organizational and motivational concepts that had been successfully implemented at other companies. This led us to construct a list of additional questions that we covered with the rest of our benchmarking partners.. In all cases when we asked these questions, we shared comments about questions from our company's perspective.
Finally, we found two, at most three people were sufficient on each visit. It is not important to have the same group each time, but it is imperative to have at least one person from the steering team go the along in order to provide continuity.
THE RESULTS. As discussed earlier, our goal initially was to see how our costs for planning, purchasing and scheduling services compared with other companies. In this area, we were somewhat hampered by the very integrated manufacturing chain at our site (Kodak Park, Rochester, NY) our process is basically split into three major master scheduling areas. These are:
By February 1994, we had completed visitations to 12 other companies. As we promised for when we initially engaged our benchmarking partners we planned a meeting at our plant to review all of our findings. Our thought in doing this was to create a "networking" atmosphere that will allow us to build from the new relationships we had made. In addition to sharing data, we asked each of the companies to share with others something that was especially impressive in our meeting with them. This allowed for not only a learning experience, but also an R+ for the company doing such an excellent job.
After the initial 12 visits we decided we had sufficient data around cost of services and determined we would focus on engaging companies that could help us with the following key causes:
In summary, we feel we met and exceeded all of the goals we had set at the start of the process. We have now engaged 20 companies in this process. We chose outstanding companies, companies we felt we could learn from and utilize these findings as part of our continuous improvement process.
BENCHMARKING PURPOSE STATEMENT
IN A WAY THAT:
Both Eastman Kodak and other companies can compare their overall scheduling, planning and material purchasing functions and formulate ways to make them more effective
GENERAL DESCRIPTORS OF MANUFACTURING PROCESS
|YOUR BUSINESS PRODUCT BILL||M$|
|% PRODUCT BILL THAT IS MATL COST||%|
|CATALOGUE ITEMS (FINISHED GOODS)||# ITEMS|
|NUMBER OF SPECIALS (STOCK VS. NON STOCK )||# ITEMS|
|FINISHED GOODS INVENTORIES||DAYS SUPPLY|
|SINGLE OR MULTI-ECHELON STOCKING OF FINISHED GOODS|
|RAW MATERIALS (EXCL PACKAGING)||# ITEMS|
|RAW MATERIALS (EXCL PACKAGING)||DAYS SUPPLY|
|PRE-FINISHED GOODS INVENTORIES||# ITEMS|
|PRE-FINISHED GOODS INVENTORIES||DAYS SUPPLY|
|PACKAGING COMPONENTS||# ITEMS|
|PACKAGING COMPONENTS||DAYS SUPPLY|
|SUPPLIER LEAD TIME||DAYS|
|COST OF PURCHASING AS A % OF TOTAL $ SPEND||DAYS|
PURCHASING AND PLANNING SYSTEMS
ARE YOUR SYSTEMS?
_____ CUSTOMIZED BY YOUR OWN COMPANY
_____ DEVELOPED INTERNALLY
PURCHASING AND PLANNING SYSTEMS -
WHAT TYPE OF SYSTEMS DO YOU USE ?
_____ P.C. BASED
_____ 4TH SHIFT
ARE YOUR SYSTEMS LINKED ?
DO YOU HAVE A SINGLE OR MULTIPLE DATA BASES
DOES YOUR COMPANY REQUIRE PROFESSIONAL CERTIFICATION FOR:
BUYERS * ________
PLANNERS * ________
% TIME BUDGETED __________________
* IF YES, BY WHAT ORGANIZATION