When the economy plummeted in 2001, it gave Nordson Corp. the opportunity to turn its supply chain into a lean, mean manufacturing machine. The 50-year-old producer of precision dispensing equipment implemented lean manufacturing principles, knowing that customer demand establishes a manufacturing need, which, in turn, establishes a need for a specific amount of supplies.
"You wonder why people don’t go lean from the first day," says John Dillon, Nordson’s director of supply chain management. "It’s all completely logical."
By implementing these principles during a downturn in the manufacturing industry, Nordson leaders hoped to take advantage of efficiency gains to improve productivity and gain market share when the economy improved.
"We now are changing not only our manufacturing processes but the way we do everything — product development, internal administrative processes, IT … Lean is a journey, not a destination," Dillon says.
The company made several changes. Among them:
* The company established a Supply Chain Central Extranet five years ago, and in 2000, implemented SAP to get a more accurate polling of its business on a minute-by-minute basis.
* Material resource planning (MRP) schedules are run twice a day, and requirements are posted online.
* Bar-coding incoming receipts eliminates manual data entry, cuts down on potential errors and saves time waiting for incoming stock.
* With Nordson’s Purchase Order Acknowledgement program, suppliers electronically accept orders, and Nordson knows the order is complete and arriving on time.
* Suppliers are evaluated on quality of product, on-time delivery and lead time. Nordson posts the scores anonymously online so suppliers can improve their process or the top suppliers can try to increase their own business by seeing where other suppliers are lacking.
* The Nordson system notifies suppliers when inventory drops to a specified level, and inventory is shipped and received within seven days.
The lean processes have been so effective that Nordson plans on implementing similar ones in its European facilities.
"(These automated processes have) allowed us to have more confidence in our ability to go lean because we know our suppliers understand what our requirements are because we’ve posted it out there for them to see," Dillon says. HOW TO REACH: Nordson Corp., (440) 892-1580 or www.nordson.com
