When an original equipment manufacturer (OEM) decides to implement lean manufacturing best practices, the very first step is to assess the current situation of the factory. In order to eliminate excess waste and production slowdowns, you must first identify where those issues are and what’s causing them. Ideally, you should examine every aspect of the supply chain to find weaknesses. However, some areas are considered high-waste areas and are easier to address. By addressing these areas first, you can achieve bigger wins sooner.

The top five areas where OEMs can achieve big wins, fast include:

1. Labor Efficiency
Human error is impossible to eliminate, but that doesn’t mean that employee productivity can’t be considerably improved.  Improving your employees’ productivity is usually not a matter of employees working harder, but on process improvement. Many OEMs dedicate significant labor hours moving inventory multiple times before consumption at point of use. By implementing vendor managed inventory (VMI) OEMs are empowered to redirect labor to higher-value tasks.

2. Production Downtime
Inefficient planning can lead to lost time, significant delivery delays and costly downtime. Most importantly, it can have a major effect on customer relationships. Look for bottlenecks in the production process. By identifying ways to make this area more seamless, you can improve efficiency exponentially. Bottlenecks can exist anywhere in the supply chain, so you may want to look beyond the factory floor to identify them.

3. Quality Concerns
When looking to improve quality, one factor to look at is accurate assessment of the causes of time lost due to defective parts and builds. Lost time could be caused by receiving an order of defective inventory or it could be caused by an inefficient quality assurance process. One factor that is oftentimes overlooked is accurately assessing whether the production equipment used to build a product is the source of a quality problem. You may want to measure the amount of time spent finding quality issues as well as the effort that goes in to fixing these mistakes.

4. Inventory Supply
Getting rid of overstock can result in huge wins. However, it is an area that a lot of OEMs overlook because the bulk of overstock items are nearly always low-value components and other insignificant parts. These parts happen to be the most common component category that causes stock outs. Because running out of something as simple as a bolt can shut down a line just as fast as running out of a high-value item, the most widely used, easy, but costly solution most OEMs embrace is to order more low-value parts than needed. But remember, too much inventory on hand is just as harmful as not having enough. Too much inventory is essentially frozen money that can’t be used in other places.  VMI programs like Just-in-Time (JIT) inventory and Kanban inventory systems resolve this this problem by simultaneously minimizing or even completely eliminating your on-hand inventory while also ensuring consistent, reliable inventory availability.

5. Transportation
Looking outside the factory walls to transportation can also lead to a big win fast. Extreme lead times for raw materials and critical high-volume parts like fasteners can slow down overall production. Many times, big wins can be realized in receiving. Once again, working with a third-party supplier that can store excess inventory off-site but still be relatively close by can dramatically shorten the distance between your facility and the items you need. Waiting for shipments to arrive from halfway around the world can leave a lot of room for errors to take place.