Jorgensen Success Story
Jorgensen Forge manufacturers forgings from material grades, including low-alloy steels, ph stainless, titanium alloys, aluminum alloys, and nickel-base alloys. The company was established in 1940 and today employs 110 people at a 22-acre facility in Tukwila, WA with 350,000 square feet of manufacturing space. Since its founding, Jorgensen has expanded capabilities through the addition of advanced equipment, state-of-the-art technologies, and a talented team of experts.
Jorgensen Forge was one of six companies chosen to participate in the Defense Manufacturing Pilot, a program designed to help small to medium-sized defense manufacturers survive defense cuts and a shifting global manufacturing environment. Impact Washington partnered with the Washington State Department of Commerce, the Washington Military Alliance, and the Puget Sound Regional Council to test whether a Next Generation Lean program could boost production, reduce costs, and unlock capacity defense manufacturers.
Through the CoreValue assessment, Impact Washington revealed a value gap of about 36% above Jorgensen’s existing valuation and assigned a CoreValue rating of 63. This is a relatively healthy rating, but signals room for improvement in the company’s strategic position.
Impact Washington’s objective was to reduce the lead time for releasing orders to the shop after receipt of new customer orders (referred to as PO to SO or POSO). The project was undertaken according to the NextGen Lean process. Through the process of value stream mapping, we created a current-state map of the customer-order-to-shop-order release system and developed tagging data sheets to follow orders as they moved through the CO to SO activities. We then trained the JFC team to use the data collection (tagging) instruments.
We worked with the company executives to identify the process to address during this project. Because the order receipt can be a bottleneck, delaying the dispatch of new orders to the shop, reducing customer order to shop order lead time was selected as the “product” on which to focus this NextGen Lean project.
- Developed a current state map of the CO to SO process.
- Designed a collection of order tagging instruments, one for each of the areas involved in the CO to SO process (i.e., Inside Sales, Planning, Production Control, Metallurgy and Contract Review) and trained the staff to use the tagging sheets as they started and completed operations related to their areas of responsibility.
- Data was collected for approximately two months (low volume of orders).
- MPX models were developed based upon the current state map we developed and rough estimates for the times required for each process step that we modeled.
- We conducted a day-long workshop with the complete team to develop a future state map for the CO to SO process. The objective was to use the MPX models to investigate the potential lead time reductions that could be achieved if the future state was implemented. The result of the future state map workshop was a realization that the current state map that had been developed was not totally correct and complete. Much of the workshop was spent identifying those missing/incorrect process elements and creating a list of Future State Action Items.
- We met with the team several times over the next few weeks to refine the future state map and evaluate the applicability of the MPX models to the project. The complexity of the MPX models required a significant amount of time to maintain in alignment with the future state map as we refined it, and the data which had been collected gave us little faith in our ability to convince the team that the modeling results were accurate. We didn’t attempt to use the models with the JFC team.
- Several of the future state action items were completed during the last month of the project. A work progress board was developed and posted in the CO to SO work area, an area also frequently visited by other members of the production and engineering staff. The objective of the board was to make visible to everyone the status of every open order. The Board would be the focal point for a daily stand-up meeting to review orders and for the appropriate staff (e.g., planning, sales) to update the order as it moves through their department. The board has been developed and posted in the area described, but using it as a focal point for daily review is to begin January 18, 2016.
- Another action item from the workshop was the launch of a meeting to review all aspects of new orders within two days of their receipt. Again, the objective was to improve communication/information sharing about the order as quickly as possible and as completely as practical (given that all parties had no more than two days to prepare). A comprehensive meeting process document was developed to assure that all pertinent questions were addressed and those departments needing to provide or obtain information about the new order attended and/or were notified of results (e.g., cancel, delay, order material). This meeting and document has been in use since mid-November.
- An audit of all customer orders that we were tracking with the tagging instrument was undertaken because so little data was available for evaluation at the detailed level we had begun our investigation (per the suggested NextGen Lean process). Many of the order numbers we were tracking were first identified at some stage beyond the initial Inside Sales CO receipt starting point (e.g., they first were captured on the tagging sheet at Planning), so we couldn’t use them, even though they may have been released as a SO. With the audit we were able to “go back” and determine when all of the orders we were tracking had been received by Sales. This provided a much better picture of improvements in the CO to SO process.
The below chart shows the average number of days between receipt of a new customer order and the release of its shop order. The table on the right shows the number of new orders (CO) received during each month that were subsequently converted into shop orders (SO). Read more about the success of the Defense Manufacturing Pilot Program.