Colored Folders

One of my clients is a job order manufacturer for the auto industry. A few months ago they were having difficulty meeting delivery deadlines. As they tried to meet deadlines quality began to slip, more deadlines missed… You know how it goes. They needed a way to fix the shop scheduling problem, to meet ever tighter deadlines, while holding to their quality standards. Or the customers were leaving.

I was asked about computer software to help fix the problem. I balked. I told my client that if you cannot figure out what is causing the problem and solve that, then if you automate it, you will just get the same problems, only faster.

Years ago when I was CFO of a health insurance company, we targeted to pay 90% of the claims in 5 days, 98% in ten. We were failing. We had grown too fast and could not keep up. Our solution: colored folders. Every day of the week was a color. From my memory: red for Monday, yellow for Tuesday, blue for Wednesday and so forth. You get the idea. Every claim received was put in the appropriate color of the day. So on Friday, every claim file in a yellow folder was on day 4 and needed to be done by Monday. End of day Friday, anything still in a yellow folder was transferred to a black folder and they got priority. It took some time, but daily monitoring of the colored folders by the adjusters and their supervisors caught us up. In a few months we met our time service standard. Note this was 25+ years ago and predated most automated computer systems. It was a manual solution.

So we tried something similar at my client. We have about 200 jobs in shop at any point in time. Each job will have an engineering/machining spec drawing on it. The deadlines are generally five days for each job. We assigned every week of the month (not day, but week) a color. So, the machine operators know by color in the folder (we used different color sticky notes, and wrote the exact due date on the sticky note and stuck it in the job folder) which jobs to work on first. And, since many of the jobs can be handled by different machine operators, they know by color which operators they can help complete the jobs. The machinists and supervisors solved the slipped deadlines themselves, just by focusing on the colors. We went from almost 50 out of 200 late deliveries to only 2 within 2 months. All we did was use colored folders. Months after implementation, we are still current, still using colored folders and have not yet automated it.

As the engineers at our customers are noting our timeliness and much improved quality, they are sending more work our way. We will eventually have to automate the “colored folder” process as our volumes grow, but the idea will be the same. Highlight the deadlines and let the supervisors and work force solve the problem.