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IET, Inc.
3539 Glendale Ave
Toledo, Ohio 43614
1.419.385.1233
www.ieteng.com

Case Study 1-12927

Make-to-stock vs. Make-to-order? You have to do the math.


IET’s fact-based analysis yielded a solution that enabled one facility’s available space and capacity to work in harmony toward a common goal


The Customer

A leading international automotive supplier of exterior components and systems to OEM’s around the world


The Challenge

The customer’s service parts operations were working hard to meet demand, but on-time delivery performance just was not where it had to be. Service parts had to compete with high-volume normal production for the available injection molding capacity. Too often, service orders were being produced late and in quantities that were much bigger than actual demand due to minimum molding batch sizes. Over-production of service orders had filled the warehouse to capacity. Storage density was so high that finding parts to ship had become a problem. The customer needed a plan for making the service operations run like a lean machine.

The Solution

Understanding the nature of service parts demand was the necessary first step toward designing an improved system. IET’s analysis of customer and part number demand patterns revealed the vast majority of service orders were low-volume, somewhat infrequent, and, in aggregate, relatively stable week-to-week. The customer could choose one of two dominant operating philosophies: (1) satisfy demands from stock, which meant running their own distribution center for service parts or (2) operate as a Make-To-Order (MTO) business. The plant had insufficient space to be a complete distribution center so the MTO approach was preferred. The choice depended on capacity.

IET proved that there was sufficient injection molding capacity to run the many low volume jobs that characterized weekly service part demand. IET’s engineers also proved that solving the over-production problem would free enough space in the warehouse to stage incoming and outgoing parts in a layout that streamlined material flow from molding through packaging and shipping.

IET’s insights, analysis and recommendations gave the customer’s management team a game plan to pursue with confidence. Detailed implementation planning began immediately.



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