Thursday, September 19, 2013

Yes, You Can Keep Your Consumables in Check

Despite what I heard the other day from an Ops VP who said, “what Lean experts don’t tell you is that consumables at point of production leads to over consumption,” the truth is you can keep your consumables in check. It’s not uncommon for top management to worry about reckless use of consumables and even the disappearance of expensive tools. Proper analysis and planning will prevent this from becoming a problem.

While I don’t know what Lean experts that VP of Ops was dealing with, I can confidently state that a thoughtful implementation of a conservation process will keep consumable consumption in check and expensive tools in-house. To start on this process it’s important to obtain accurate and complete consumption data, which means what, where, and how much is used? If this data is not readily available, it can be gathered through surveys, intra-department focus groups, or one-on-one interviews. When you combine data collected this way with spend data gathered through invoice crawls you can expect a high rate of useable data.

With good data in hand, the first step is to build a budget based on work centers and account codes. Then, tie each consumable supply and tool to the cost center and account code where it is used. You can tie consumable spend to production level as a way to gauge rate of use per unit produced by work center. Prepare and review weekly or monthly activity reports by cost center and account code to measure progress toward goals.

Finally, use positive reinforcement toward employee compliance, as part of a plan to raise awareness about the consumable spend issue. It is a well proven fact that positive recognition tends to produce repeatable behaviors. Also, tie consumable spend reduction targets to your overall Lean recognition program. Over consumption of consumables is not something that anyone should believe is an automatic unwelcome consequence of Point of Use Solutions in Lean initiatives.
The iPower Distribution Group of New England is a leader in VMI programs. iPower delivers the widest breadth and deepest supply of Tier 1 commodities in the Northeast. Our supply chain provides $800m annually of industrial components, supplies, and packaging materials. To learn more visit us at