Axeon Water Technologies Case Study

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EXECUTIVE SUMMARY

Our 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.

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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. 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