Master's Culminating Experience
The following documents how I have been working to make agile manufacturing a reality at Whirlpool Corporation, the largest producer of home appliances in the world. Together with a Dayton, Ohio design team, I designed a quick response production process for a new range manufacturing plant. Several innovations made possible a significant improvement in manufacturing flexibility and order response time which will give the firm a competitive advantage in the market, leading to increased profits. The facility was constructed in Tulsa, Oklahoma and is now in production.
Dr. Eliyahu Goldratt's Theory of Constraints served as the foundation of the production approach. Japanese manufacturing techniques and an existing corporate MRP system were then pragmatically blended resulting in an innovative production system unique to this plant. A sophisticated computer simulation model developed as part of the study was used to validate the approach.
The first and most quantifiable benefit was a $5 million avoidance of planned capital investments due to the way we coupled certain production processes. The second and more important change was to significantly improve the order response time for freestanding ranges from three weeks to two days. This addresses a root cause of the poor product availability that affects the whole industry. According to an internal company study, poor availability resulted in a 14% order cancellation rate and the revenue loss of $269 million across North America.
As a result, the new production approach developed for Whirlpool's Tulsa Division provides an important economic and competitive advantage for the firm that should directly lead to increased customer satisfaction and shareholder value.
Maley, D. C.
(1996). Innovation in a Production Function by Combining Theory of Constraints and Kanban Scheduling Techniques. .