Axeon Water Technologies Case StudyView the presentation on YouTube at:EXECUTIVE SUMMARYOur team conducted an operation analysis of AXEON Water Technologies based in Temecula, California. The company, founded as R.O. UltraTec in 1989, started production with residential membranes. It later expanded its product line to include commercial water filtration components and systems. The company also expanded overseas by opening a distribution center in the United Kingdom. Building all of the components and systems in house, providing exceptional customer service, and technological support has allowed AXEON to become very successful
We visited the Temecula, California manufacturing plant and warehouse. Our visit consisted of a tour and interview with Trish Caudillo, the Procurement and Materials Supervisor (who also happens to be one of our team members). The visit focused on the organization’s operations, our analysis of the existing inefficiencies, and our recommendations for improvement.
We identified four problems that we felt had a major impact on the flow of operations, and provided recommendations for mitigating or resolving the production problems.
1. Excessive Delay in Order Confirmation; Once a customer places and order AXEON attempts to confirm product shipping dates to the customer within 24 hours; however, it currently takes AXEON between one and five days to communicate this information to customers due to part shortages and supplier restocking confirmation delays. We recommend that AXEON reduce wait times by working with suppliers to find a reasonable solution for both parties.
2. Delay in Identifying Part Shortages; Because parts are picked prior to the work order being released to the production floor, there should not be any shortages once the part cart leaves the warehouse, however, AXEON repeatedly experiences part shortages after work orders have been issued to the production floor causing production and shipping delays. We recommend a Poka-Yoke approach to prevent the variance in part consumption. Standardizing system building, tools available to each operator, and supplying an assembly instruction sheet would ensure standardization of each system. Additionally, changes to the BOM should only be made by the production supervisor after an operator consensus is reached
3. Building Rules and Policies; A BOM is not required to change the design process, code, or specifications of the systems at all unless the modification to a system is required to conform to a specific plan. As mentioned above, we may require the BOM to review the design process as a matter of urgency or on the basis of an ongoing contract with the vendor. Furthermore, any revisions to existing laws, code, or specifications may be subject to review and changes to BOM regulations may be in the hands of the vendor. To the extent that new laws are introduced for a system that conflicts with a BOM, we may have to change the system. A complete BOM program for a system which does in fact break or cannot meet its requirements will be maintained as an online system under the BOM’s BOM Policy in the final version of the system by the operator. To the extent that those changes have not caused a major problem to a BOM to be closed and/or terminated at the end of each one-year-period, the operator has the option to reopen or to terminate the control plan in effect during that period or to have the system continue operation and continue to meet the control plan of the vendor as a whole. If you intend to work in the production sector before you start working on the system, we recommend you make sure that there is a safe and satisfactory system running. If you wish to work with existing BOM operators you must contact one of them, especially as we continue to make efforts to improve our operational training program. If you want to learn more about designing BOM systems using an approved BOM operator in the context of BOM changes, see the BOM Management Guide to BOM Management (pdf), or contact an operator in your local field.
4. Design Requirements—BOMs are designed to meet minimum requirements for a BOM and maintain it successfully, so that the design can be completed in about 60 to 70 days. We expect that after we have completed the minimum design requirements (or the design has previously been completed), we will provide a service plan that can assist you in the design process after a set number of weeks. This plan can be completed electronically at the time your BOMs are available.
There are many different reasons given for making a BOM. As some operators may be more interested in developing service plans for their systems than others, we recommend that you use the services provided by the operator rather than the service plan. Service planners are responsible for establishing the operational requirements of each BOM, and they may also make changes to the implementation of the BOM. If you intend to build a system, it should be designed with a BOM in mind, as detailed information below shall be provided in more detail on the BOM management plan website.
3. Building Rules and Policies; A BOM is not required to change the design process, code, or specifications of the systems at all unless the modification to a system is required to conform to a specific plan. As mentioned above, we may require the BOM to review the design process as a matter of urgency or on the basis of an ongoing contract with the vendor. Furthermore, any revisions to existing laws, code, or specifications may be subject to review and changes to BOM regulations may be in the hands of the vendor. To the extent that new laws are introduced for a system that conflicts with a BOM, we may have to change the system. A complete BOM program for a system which does in fact break or cannot meet its requirements will be maintained as an online system under the BOM’s BOM Policy in the final version of the system by the operator. To the extent that those changes have not caused a major problem to a BOM to be closed and/or terminated at the end of each one-year-period, the operator has the option to reopen or to terminate the control plan in effect during that period or to have the system continue operation and continue to meet the control plan of the vendor as a whole. If you intend to work in the production sector before you start working on the system, we recommend you make sure that there is a safe and satisfactory system running. If you wish to work with existing BOM operators you must contact one of them, especially as we continue to make efforts to improve our operational training program. If you want to learn more about designing BOM systems using an approved BOM operator in the context of BOM changes, see the BOM Management Guide to BOM Management (pdf), or contact an operator in your local field.4. Design Requirements—BOMs are designed to meet minimum requirements for a BOM and maintain it successfully, so that the design can be completed in about 60 to 70 days. We expect that after we have completed the minimum design requirements (or the design has previously been completed), we will provide a service plan that can assist you in the design process after a set number of weeks. This plan can be completed electronically at the time your BOMs are available.
There are many different reasons given for making a BOM. As some operators may be more interested in developing service plans for their systems than others, we recommend that you use the services provided by the operator rather than the service plan. Service planners are responsible for establishing the operational requirements of each BOM, and they may also make changes to the implementation of the BOM. If you intend to build a system, it should be designed with a BOM in mind, as detailed information below shall be provided in more detail on the BOM management plan website.
3. Inventory Accuracy; The primary inventory accuracy problem is part shortages (dependent demand). We identified a variety of factors contributed to these part shortages: 1. Receiving transaction entry errors (entering incorrect quantities in the inventory material records) 2. Physical (cycle count) Inventory transaction errors (adjusting inventory records erroneously) 3. Parts were not in the correct stock location (may still be in packaging or receiving) 4. Parts needed for system assembly