Rye River Brewing Company
Case Study 2 – Inventory Cycle
Our second case study was identified by an employee. It related to Finished Goods Inventory Cycle. She saw a number of issues that she wanted to address:
- First of all, the book stock didn’t match the physical stock on the premises.
- Secondly, the physical stock didn’t match the racking boards.
- This employee saw that unauthorised personnel were moving stock within the brewery.
- Next, it was time consuming to organise the book to physical reconciliation.
- As a result, this all led to unfulfilled customer orders and lost sales.
- Most importantly, she calculated that the company was wasting approximately €23,400 per year (10-15 hours per week, average costs €300-450).
- To start with, the company wanted to increase the accuracy of the racking board to 95%.
- In addition, they sought to improve traceability of the products.
- Furthermore, the business wanted to save time on stock reconciliation.
- Finally, Rye River wanted to increase book stock record accuracy.
8-Step Problem-Solving Process
In trying to solve a particular problem, we advise using the 8-Step Problem-Solving Process:
- Current State
- Root Cause Analysis
- Select Countermeasures
- Standardisation & Learnings
First of all, we collaborated with Rye River to set up a Brainstorming Event. The team presented the problem statement and current process. We asked everyone for their opinions and they wrote their ideas (big and small) on post-it notes.
Then, we put all these ideas on an Impact/Ease Chart to assess the potential impact or benefits they will have on the company. The result is a visual representation of where best to assign time and resources. We don’t discard any issues as their assessment may change over time as other problems are resolved. Therefore, we can summarise these four activities as follows:
- Just Do It– these ideas have high impact and are easy to do now.
- Why Not?– these issues have low impact and are easy to address.
- Projects– ideas that have high impact but are difficult to address.
- Not Now– issues that have low impact and are also difficult to address.
The team identified a list of issues and countermeasures which they implemented (shown below):
- QC template update. First of all, they changed QC page adding count check space.
- No more than one half pallet per product. They avoided opening more than one pallet per product.
- Lack of lot numbers of aisle sheet. Next, they introduced lot numbers and BBE.
- Re-design record pages on domestic boards. Then, the team added space for date and number when cases are taken off the location.
- Counting was taking place when the stock was still in production. They rectified this issue by counting the stock only when the production is finished.
- Lack of understanding of the picking process. The company recognised that they needed to train staff.
- Unauthorised staff moving stock. Rye River recognised that they need to train personnel in relation to this issue.
- More communication. Finally, they held weekly meetings on the factory floor.
As a result of this employee’s lean project, the business has achieved 52% reduction in the Average Cycle Time (hours per week). Furthermore, they have achieved 93% improvement in racking accuracy.
- Incorrect records and mistakes lead to time wasted.
- Culture change takes time and persistence.
- Team effort was essential to achieve a good result.
- Communication helped us to discover the source of the problems and develop a way of fixing them.
We firmly believe that the expertise to develop business process improvements already exist in every organisation. This has clearly been the case in Rye River Brewing Company. Through their employees’ Lean projects, the company has made significant continuous improvements to their business.
ETAC has worked with Rye River Brewing Company to streamline their business and improve their processes. We hope you enjoyed reading about this case study on Inventory Cycle. You may be interested in reading the two other case studies featured here: Case Study 1 – Wasted Time and Case Study 3 – Forecasting Racking. All our case studies are available here.