Manufacturing Case Study

Jun 21st, 2015
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University of San Diego
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In 2009, Unison Industries, a worldwide provider of electrical and mechanical aviation components and systems, had a problem common to many manufacturers: an excess amount of inventory. Contributor Melissa Connolly describes how Six Sigma helped to get the excess inventory under control.

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Manufacturing Case Study: Using Six Sigma to Reduce Excess InventoryIn 2009, Unison Industries, a worldwide provider of electrical and mechanical aviation components and systems, had a problem common to many manufacturers: an excess amount of inventory. Contributor Melissa Connolly describeshow Six Sigma helpedto get the excess inventory under control.Many manufacturing businesses utilize Enterprise Requirement Planning (ERP) systems to manage supply and demand management of raw materials, work in progress (WIP), and finished goods. Unison Industries (UI), a worldwide provider of electrical and mechanical aviation components and systems (their products can be found in trainer planes, jumbo jets, and even spacecraft) was no exception to this.Early in 2007, UI transitioned to a new ERP system called ORACLE. Shortly following the transition to ORACLE, the company found that it had amassed a significant amount of excess inventory.In January of 2009, a vast quantity of UI inventory was pegged to excess, constraining working capital, resources, and capacity. Excess inventory per category was 20% production (which supports products already in production) and 65% engineering (which supports the development of new products). The 65% of excess engineering inventory had a dollar value that equated to approximately 20% of the companys 2009 engineering budget.Because of the seriousness of excess inventory, the companys executive team took immediate action.

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