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42 SMT Magazine • March 2016 part needed to go directly to the floor when it ar- rived, and there was no specific bin assigned for the part. Sound familiar? Also, by the time we found the missing part, reordered it, and paid for an overnight shipment, we were now late on the demanding customer order, and overtime was in place to get the assemblies out ASAP. And then to top it off, my management team was meeting with a high-speed SMT equipment manufacturer to order another line, so that we could meet customer demands! It dawned on me then, "What if we never had surprise short- ages? What if we could pull the kits instantly and accurately? What if the feeder set-up crew could find parts in seconds?" It was an endless series of "What ifs." The answer was painful and enlightening. We could have exceeded our customer demands with one less line. The existing staff could have supported the increase in volume of the busi- ness threefold without adding any more staff. My buyers would have had more time to strat- egize material deliveries and negotiate prices more effectively. My program managers were not material expediters and could have provid- ed a lot more customer service. The overtime would have been far less, the cash flow would have improved, the material costs would have come down, my staff would have had more time to prevent the excess and obsolete inven- tory build-up, and our profit would have soared. So what is the answer? A fresh look at how we deal with material kits and inventory! When the Six Sigma revolution started to im- prove quality in the '80s, we were not setting goals to improve by 10%. Drastic change was required, not incremental improvements. To- day, this means the traditional shelves and bins need to go; metro carts and Home Depot shelv- ing and bins are no longer the best way to store your parts. Close your eyes and envision a fac- tory where the right amount of material arrives when you need it, and is placed in a location that, within a few seconds, can be picked up and loaded into a feeder without human error. Improving material Operation Let's try to map out a standard material handling operation. The flow chart of a typical factory after the parts are received and moved to the stockroom looks something like what is shown in Figure 1. a PraCtICal guIdE to ManagIng MatErIal CoSt IMPaCt Figure 1: Flowchart of a typical factory after the parts are received and moved to the stockroom.

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