Reduce boxes, then reduce buildings
When the CEO and COO of this service company heard that the key to improve their financial performance was to reduce their inventory of spare parts, they were a somewhat doubtful: their business is maintenance of gas stations and spare parts were seen to be a minor issue in the overall business.
But they did it all the same. They improved service of parts to field techs, looked at the highest running parts, reduced lead-times and changed from large bins to smaller ones, one part by one part.
In the process they discovered missing parts caused major mudas of technicians not being able to complete their job on the station, rescheduling of work, too much inventory stockpiled in vans “just in case” and obsolete parts and so on. Late work meant late billing, etc.
One kaizen leading to another, three years later, they has doubled their inventory turns and doubled their margin! And moved. Having reduced the inventory considerably, they moved their operation to a free building across the street, reducing total surface by a third, and rent price by half. Now, that’s, is lean!
The CEO and COO in front of their new building!
