Improved Inventory Management System Increases Sales at InCord
“What CONNSTEP has contributed to the floor in productivity terms have been a huge win. We’re able to move material through the shop floor more efficiently with less mistakes, higher productivity, and reduced lead times. That’s key.”
– Chip Merritt, Chief Entrepreneurial Officer, InCord
InCord, which got its start in 1995, is one of the nation’s largest manufacturers of finished netting products. Operating out of their 26,000 sq. foot facility located in Colchester Connecticut, InCord’s 70+ employee’s produce netting for a variety of industries including amusement parks, storage nets for warehouses, nets to cover pits in automotive bays, orchestra pit nets, nets for use on construction sites, netting for sports enclosures and gym dividers, safety netting, and netting for home and garden use. Additionally, InCord is an ISO certified manufacturer and has been titled as a Top Place to Work in CT for the past 4 years by the Hartford Courant.
After experiencing significant growth, InCord’s increased demand resulted in supply chain and inventory management challenges. Replenishment times for materials was longer than customer requested lead times. The result was stock outs and a disrupted work flow. InCord’s customer service goal of supplying customers with product within two weeks had expanded. The constraint in the assembly process was sewing and it was running out of work. Netting lead time was approximately 8-10 weeks as it was shipped from a supplier in Germany and InCord’s ordering process was in need of improvement to ensure that materials were being replenished at the same rate of demand, and not after the fact.
Having worked with CONNSTEP in past, InCord’s Chief Operating Officer Tess Jette, and Chief Entrepreneurial Officer Chip Merit, knew exactly who they wanted to work with in order to solve their inventory management and lead time issues. CONNSTEP consultant Bill Kirchherr had spearheaded the previous projects at InCord, so again he was brought in to work on their newest improvement initiative. Bill established a team of InCord employees who he’d be working with directly throughout the course of the project. In total, there were approx. 4 team members involved, including Bill. Each member was a part of a cross functional team, and would need to go through a series of training with Bill in order to understand the key elements to improving their specific processes. Teaching the teams to implement lean process improvements on their own had been the most critical element to continuing success at InCord.
After forming the team, Bill gathered data and established a baseline of the current situation, and outlined a growth and execution plan. Analysis was performed on materials and hardware. The goal was to update the materials management process, and pull replenishment activities.
To ensure materials would always be in stock, and hardware was readily accessible and available through the production stage, Bill developed an inventory management plan that was based on historical and forecasted growth calculations. The solution was a pull replenishment system. Product is replaced at the same rate of which it was consumed. This is used for items with consistent and high demand. Overseas items are replaced at an EPE (every part every) month. Once inventory gets to a certain level, a ticket is processed stating the material had been consumed. When the reorder point is reached a release is sent to the supplier to release material. The frequency of material releases compensates for fluctuations in demand. This solution is referred to as a Pull Kanban system. The ordering system proved to work wonderfully, and also helped the team members work more efficiently. Bill also helped develop better pulling solutions for the hardware so it was more accessible and organized. The new ordering process, along with the better hardware storage and organization reduced the amount of movement to retrieve the hardware, and improved work flow.
Within one replenishment cycle, InCord began to see results. The availability of product has reduced production lead times to less than two weeks. Since implementing the new inventory management system, materials are always available for fulfillment, hardware is easy to access, and the employees all were educated on the principles of how to operate in a more effective way. COO Tess Jette commented “There’s no rushing, it’s very calm here. Yet, we’re shipping so much. It doesn’t look busy, and that’s perfection because it means everything is under control, and everything that must be done is getting done.” Today, InCord continues to practice the concepts they learned while working with CONNSTEP, and are excited about the continued growth they experience by being a lean organization.
- Increased Sales: $3,500,000
- New Jobs Created: 8
- Jobs Retained: 67
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