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August 2017 • The PCB Magazine 33 CYCLE TIME REDUCTION THROUGH W.O.R.C. Five Simple Accounting Strategies to Support W.O.R.C. 1. Use lower overhead rates for W.O.R.C. cells 2. Assign overhead using more than just direct labor 3. Apply overhead at the time of shipment 4. Apply overhead based on critical path or other lead-times measures 5. Reassign some overhead costs specifically to large batches Note: All the above are completely consistent with GAAP (generally accepted accounting princi- ples)! "It's always about the dollars." Focus on your Biggest Bang for Your Buck! Saving seconds at the expense of minutes, hours, days or even weeks is saving a penny where you could be saving a dollar. Cycle Time Reduction Starts in the Office One of the biggest "Aha" moments result- ing from a TRAC comprehensive assessment is just how much lead-time is consumed by of- fice functions (sales, order entry, engineering, and CAM). This is the fastest and easiest way to begin a W .O.R.C. implementation with a payback that begins immediately. The follow - ing case study illustrates just how much cycle time can be regained with only a small pro- cess change and the reorganization of a few cubicles. Office Case Study: Company A Company A is a $24 million manufacturer of custom sheet metal components serving the industrial, medical and instrumentation mar- ket sectors. Company A reported a gradual loss of market share over the past two years along with increased customer pressure to reduce their standard 4−6-week lead time to be more in line with their competition's 3−4 weeks. TRAC was contracted to perform a compre- hensive "order entry to shipping" assessment and develop a cycle time reduction implemen- tation plan. Office Process Assessment The assessment discovered that, on aver- age, 2½ weeks of Company A's lead-time was being consumed by office functions: sales, or- der entry, CAM, engineering and purchasing. A major collateral impact of this was that pro- duction was always put in the position of hav- ing to build product in a 3−4 week timeframe. Orders flow through the office functions in a linear fashion that tended to be batch pro- cessed. For example, each inside salesperson would wait until they had a pile of orders before mov- ing them to the order entry folks, which was repeated through the other functional groups. Sales booked an average of six quick turn jobs per week, which became the top priority in each department, delaying every other stan- dard production order in the queue regardless of due date. Another major cause of delay was technical questions from engineering that were filtered through sales back to the customer. Be- cause of poor communication, it was frequent- ly discovered that raw materials or components were not ordered in time to meet the delivery dates. Finally, every order went through the same path regardless of complexity. The Office W.O.R.C. Cell Solution The first step was to analyze the type of or- ders coming into sales based on the produc- tion steps required to build them. The results showed that roughly 25% of all orders only went through about 55% of the process steps with the balance requiring most of the steps. A designator was set up in the ERP system to dif- ferentiate between these two categories, using "L" for low complexity orders and "H" for high complexity. The next step was to set up an Office W.O.R.C. cell (Figure 3), which physically locat- ed a person in the cell from sales, engineering/ CAM, purchasing, scheduling, manufacturing, and quality. The key is to have these functions in an open, collaborative work cell where com- munication is instant, engineering can hear and participate with sales on technical discus- sions with customers, and drawings can be re- viewed with all the major stakeholders at the same time.