The Dock to Stock (DTS) receiving method provides benefits to complex discrete manufacturers because it means streamlining receiving by delivering materials directly to the point of use. Rather than the traditional receiving inspection, the process is streamlined so that materials get to where they need to go faster.
How Does Dock to Stock work?
Typically, goods or parts given a DTS status are those that have been proven to be compliant with a company’s established quality standards. For example, a medical device manufacturer might know that certain parts are compliant with 21 CFR Part 820.80 procedure guidelines. To reduce the number of inventory moves and cost, a common practice is to perform a receiving inspection for a minimum number of deliveries or over a particular time period. After the product has been shown complaint over this testing, the item or part number is given DTS status. Subsequently, compliance is verified only on an “as-needed” basis. If a product is found to be non-compliant, it can automatically be placed on a contingency list until validation is proven again and it is returned to DTS status.
Benefits of DTS
The DTS process has been widely used for decades, and continues to be popular for the core benefits it provides:
- Eliminates duplicate work. Because Dock to Stock programs are based on long-term contracts, set-up occurs once at the beginning of the program, instead of incrementally every time parts are re-ordered to replenish. Buyer and supplier information are set in the system at the time of program launch.
- Improves quality and productivity. With DTS, the burden of quality is shifted to the supplier, who must meet quality standards to achieve and maintain DTS status. Further, DTS enables better production planning, since it is set up to deliver product to manufacture or stock on a regularly prescribed basis.
- Drives down inventory costs. By ensuring product is delivered when needed for production, DTS eliminates the need to stock extra inventory. This saves time and money through reduction of necessary warehousing space and lower labor costs, since fewer personnel are needed to manage and handle inventory.
How Defense Contractor Northrop Grumman Uses DTS
A case study published on Best Manufacturing Practices details how defense contractor Northrop Grumman employed DTS to its advantage:
“Previously, all material at Northrop Grumman Defensive Systems Division (DSD) was 100 percent inspected. This approach required significant investment in inspection equipment and labor. Dock to stock was integrated with the company’s Supplier Rating System, providing prioritization of receiving inspection workload, barcoded labels, and standard quality requirements on-line to Receiving Inspection.
Overhead was reduced dramatically by eliminating the inspection of suppliers/part numbers that have excellent historical performance. Cycle time for inspections was reduced to approximately one hour per lot by focusing on attributes that have been historically problematic or are program critical. Since implementing the DTS program, the company has increased its acceptance rate of material by 99 percent, decreased inspection personnel by 80 percent, and reduced material backlog by 98 percent.”