2018Case6DesignerGroup

31 L EAN C ONSTRUCTION I RELAND A NNUAL B OOK OF C ASES 2018 Low Value FM Procurement The overall impact was a significant decrease in the average time to record an order. Over half of our FM orders were reduced from 6 minutes to 2 minutes – a time saving of 4 minutes per order. To put that saving into context, there is an average of 1,914 small orders per year. The following highlights how much time we have gained from this change: • Previous 6 Minute Process @ 1,914 orders per year = 11,484 Minutes per year, or 191.4 hours, or 4.9 weeks per annum. • New 2 Minute Process @ 1,914 orders per year = 7,656 Minutes per year, or 127.6 hours, or 3.27 weeks per annum. Figure 3. Minutes, Hours, Weeks Comparison Pre and Post Lean. In an average 39-hour working week, we have gained 1.63 weeks back from this improved process. This resulted in more time being assigned to more VA activities and increasing the overall productivity of the procurement process. Overall, the simplified process is easier to clear shorter tasks and there is a less chance of interruption. Now in our order process, single- line entries sum-up to the total which matches a certain number of lines on the supplier’s docket, for example, one- line entry sums to € 14.63 while the supplier docket has three lines totalling to € 14.63. Tangible benefits: • Current average of 7 lines per order. The average order production time is 6 minutes (measured). • New single line method takes on average 2 minutes (measured). • This is a time saving of 4 minutes per order. • Average small order count per year 1,914 taking 7,656 minutes per year = 127.6 hours = 3.27 weeks per annum. Intangible benefits: • Simplified process – it is easier to clear shorter tasks, less chance of interruption. • Deskilled works. Figure 4. Email Load Post Lean. Lean Purchasing for Reactive work Tangible benefits: • There has been a reduced e-mail count for the buyer of approximately 17% as a result of implementation. • From an accounts payable perspective, if we consider a 10- minute invoice processing time, we can estimate that 25 invoices per week by 50 weeks per working year yields 1,250 invoices that can be eradicated with this new system, which equates to 12,500 minutes or 5.2 weeks saved per annum. Intangible benefits: • Reduced e-mail count of approximately 17% as a result of implementation. • Faster collection process from an engineer’s perspective. • Trust between Designer Group and specified wholesalers can improve with monthly order. • Monthly ordering for the reactive contract allows buyer to examine prices with more scrutiny and allows Designer Group to obtain more competitive rates where available. • Time has been allocated to more significant parts of FM purchasing. LEAN INITIATIVE IMPROVEMENTS & IMPACT