Case Problem 16.2 (LO 16.1) Where's My Cart? The Senior Seminar at Eastern University requires students to complete a process-improvement project with local industry. Huju Fang and Leanna Hearn have been assigned to Wiley Construction. Here is their report.

Company History Founded in 1975, Wiley Construction was one of the first designers and builders of wooden roof trusses. Over the past 40 years, Wiley has prospered, and it now has office and manufacturing space of approximately 12,280 square metres and additional lumber storage facilities of about 2070 square metres, on a 60-hectare site near the Bay of Fundy in Truro, NS. Use of this space has never been difficult, and in the fall of 2000, Wiley proudly opened a new 550-square-metre showroom, which serves as an educational building centre and showcase for many of the products it builds and/or sells. In addition to its core roof truss business, Wiley now has over 200 employees designing and building floor truss systems and preconstructed interior and exterior wall systems.

Joseph Wiley, the founder and chairman of Wiley Construction, not only wanted to build superior roofing systems, he also envisioned the idea of pre-packaging an entire house. The package of materials, from foundation blocks to roofing shingles, would be available through one source. This idea soon led to a custom-designed line of homes called Wiley Homes. The key selling point to these "pre-packaged" homes, besides convenience and accuracy, was that, while the interior layout was universally applicable, the exterior of the home was designed with a very local flavour.

The exemplary reputation of the Wiley Home program, as well as attention to customer service, prompt delivery times, and accurate product specifications, allowed Wiley to become an international supplier of quality building products. Their products have been shipped to dozens of countries, including Russia, Germany, Spain, Japan, Korea, China, Greece, Turkey, Mexico, and Chile.

Gary Cox replaced Joe Wiley as president of Wiley Construction in January 2011. Executive Vice President Ciro Alvarez is one of the many highly skilled and motivated Wiley professional management employees. To accomplish its diverse objectives, the company has assembled a team of employees with degrees in architecture, building construction, civil engineering, math, forestry, wood science, accounting, business, international relations, computer science, architectural technology, and biological systems engineering.

Technology From the days of hand drafting and manually designed framing layouts, Wiley now uses highly-automated methods of production, as well as completely computerized design programs. These technologies have resulted in annual sales approaching $25 million. The most automated piece of equipment at their Truro facility is a Uni-saw, a highly sophisticated machine capable of simultaneously making the necessary angle adjustments on four circular saw blades. One of Wiley's newest endeavours is the construction of prefabricated wall panels, for which it now has a new wall panel machine to more efficiently construct a higher quality wall panel. The new partially computer-controlled machine was designed especially for Wiley and is one of the best in the industry. To maximize the utility of their automated capabilities, Wiley employs nearly 50 computer operators and programmers experienced in engineering, design, export, sales, and accounting software systems. Central to the operation is the highly specialized wooden-truss design program used by the engineering staff. To ensure that all of this technology results in the highest quality products, the Wiley production facility is one of a very small percentage of facilities that opens their doors to the rigid quality-control specifications of the pre-fab construction industry.

Current Production Process Wiley Housing Systems, Inc., is a batch production company that specializes in make-to-order timber housing systems. The manufacturing facility is over 9290 square metres in size (see the accompanying figure) and is sectioned off into different areas such as wall, floor, and roof truss assembly, raw material cutting, and metal storage. Each of the assembly lines is fed by a common 2415 square metre on-site supply point. The only required materials are common-sized lumber (i.e., 24,26, etc.), aluminum connecting plates, and nails. However, each of the processes is tailored to meet customer demands and specifications.

All of Wiley's products are constructed of standard dimensional lumber that arrives via truck or train and is stockpiled in its lumber yard. Typically, Wiley has enough lumber on site for two weeks of continuous operation without replenishment. All other inventory, work-in-process, and common materials are stored inside the production facility. Once an order is received, the staff engineers design the truss system and electronically cue the order for manufacture. The production foreman then assigns the order to a cutting team. This team consists of two employeesthe sawer and the tailor. The sawer is responsible for saw setup, as well as lumber retrieval and optimization, while the tailor stacks and labels the cut lumber for assembly. Mr. Alvarez explained that his major concern was the amount of setup time required by the cutting teams. He said that up to 45% of production time was spent adjusting the saws for each job, a very typical problem in batch production. This is where Wiley's problem and our challenge begins.

Process Improvement After our initial plant tour, where we noted the large amount of work-in-process inventory waiting in carts between the saws and the assembly stations, we spent a day interviewing workers on the assembly teams. It was brought to our attention that at certain points during the day, the backup of WIP carts was in fact problematic, from the standpoint of worker safety and from the ability to locate the required cart quickly and easily. There are approximately 80 to 90 carts in use at any given time, which are loaded with raw materials on a per-job basis and are tagged with a work order. After the carts are loaded and tagged, they are placed in front of the assembly workstations. Copies of the work orders are taken to the plant control office. The plant supervisor then assigns the jobs to assembly stations by placing the work order copy in assigned bins located on the plant control office wall. The assembly employees go to their assigned bin, pick their next job ticket, and then locate the corresponding cart for that job. Mr. Alvarez mentioned that locating the cart required for the next job could take anywhere from 1 to 10 minutes, depending on the assembly backup (number of full carts used that day) and the location of the cart within the facility. The manufacturing employees are tracked on a 100th of the hour time basis for work, which means that there should, in theory, be very little unproductive time during the day, with the exception of break periods. This also reduces socializing among employees.

We decided to narrow our analysis to the immediate problem of locating the correct cart. After brainstorming possible solutions, we concluded that Wiley should use an electronic paging system similar to what restaurants use to notify customers that their table is ready. We recommend that the carts be outfitted with long-life, durable, and replaceable lithium battery-powered strobe lights that are activated by a keypad located on the plant control office wall beside the pending job order bins. Each light would have a unique three-digit number assigned to it. These numbers would be handwritten on the work order, by the individual who loads the cart, before it is given to the plant supervisor to be assigned. There is a chance of multiple carts being needed for the same job, but each cart has its own individual work order and therefore would have its own three-digit identification number and light. This is no deviation from the current process. The assembly workers would walk to the plant control office, retrieve their next job from the bin, type the three-digit code into the keypad, and then find the cart that has the strobe light turned on. This process would eliminate all of the guessing currently required to locate the cart with the raw materials and should reduce the overall average time needed to locate a cart. This would also allow for remote storage of the carts, rather than stacking as many as 30 carts at the top of the assembly line, a hindrance to traffic flow and safety.

Identify waste in the current production process. How does the pager suggestion eliminate waste? Have the students and Mr. Alvarez found the root cause of the cart problem? Why or why not? How would you apply the principles of lean production to improve Wiley's situation?