A leading global provider of aerospace products faced decreasing inventory turns, high excess and obsolete inventory, and poor service levels. Key business issues described by management included:
While all these symptoms pointed to SIOP, there were several competing root cause theories:
You can’t physically see SIOP, but it has a significant impact on your operational and financial performance.
To determine the key root causes and best course of action for improvement, TriVista began with a structured discussion with the client’s leadership identify the functional areas of impact, like planning and manufacturing.
TriVista followed with a detailed, diagnostic at each large facility which included 1) interviewing key process leaders, 2) onsite evaluation that included conducting TriVista’s proprietary benchmark assessment, and 3) completing a detailed data analysis. This allowed TriVista to determine the root cause issues from the competing theories and assess the drivers of the suboptimal business performance, including:
TriVista’s diagnostic report itemized the SIOP-related root cause issues, financial opportunities, and specific requirements necessary for solutioning. Working collaboratively with the client, the team developed an implementation plan to address the greatest opportunities.
Implementation involved three TriVista experts working cooperatively with management at the two client locations that had had the greatest opportunity for financial improvement (EBITDA4 and working capital), as well as on-time delivery improvement.
At the first facility, over a 26-week period, the collaborative team developed:
At the second site, over a 16-week period, TriVista implemented continuous improvement (CI) and SIOP solutions in partnership with the client team, by developing:
Our team created significant improvement in operational performance by meaningfully enhancing scheduling and demand planning at both facilities.
TriVista team members come with years industry experience; therefore, we speak the same language as our clients, contributing to our ability to garner the support of plant leadership and receive management buy-in.
At the first facility:
At the second facility:
Effective SIOP goes a long way in helping business leaders and management teams gain clarity around the core problems facing their business, but equally important is receiving management buy-in and support to carry out these processes for the long term.
MRP1 – Material Requirements Planning
SOP2 – Standard Operating Procedure
ATP3 – Available to Promise
EBTIDA4 – Earnings before Interest, Taxes, Depreciation, and Amortization
PPV5 – Purchase Price Variance
WIP6 – Work in Progress