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By Drive, Inc. on Tuesday 16 August 2011.

Our customers require us to send the product they need in a specific sequence and quantity. Our equipment doesn’t always agree with this need due to complex changeovers, so we build large batches of parts to cover the customer’s demand. This inventory is “tied up cash flow” that could be used to generate income, but instead it burdens us with excess carrying cost. However, our best course of action is to attack the root cause, which is the actual changeover time. This allows us to reduce inventory, increase production capacity, provide greater flexibility, reduce lead-time, and level production. Ultimately, it allows us to be more profitable.

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