The client was experiencing difficulties in meeting orders and labour was in short supply locally. In addition, there were frequent stock-outs and excessive amounts of overtime were being worked. Weekend working was also the norm, leading to adverse cost variances. We were asked to recommend a way forwards.
Having examined the method of production, our solution was based upon:
Revising the factory layout to ensure that production flowed smoothly
Reorganising the raw materials stores allowing stocks to be reduced and parts located
Devising a system of "kitting-up" so that each job could be prepared in advance and processed accurately
Producing a series of key performance indicators and reports to monitor and control labour productivity
The project was quoted on a fixed-fee basis and was completed on time. As a result, factory efficiency improved from 52 to around 85 performance. An increase of 60%. Within three weeks, the backlog of orders was eliminated and stock-outs became a thing of the past. We also saved the company £14k per annum on their energy bill.
Lean manufacturing
The client had grown rapidly from a cottage industry to a multi-million pound business in a highly competitive market. Although the manufacturing function was coping with current requirements, demand for the products was escalating and management wished to improve productivity within a Lean Manufacturing framework. Initial diagnostic studies revealed that there was significant scope for improvement:
The flow of work was irregular. It was also restricted by bottlenecks and excessive WIP
Use of floor space was particularly poor
Housekeeping and standards of safety had been neglected
Individual working methods were falling short of industry best practice
After mapping the processes we devised an improved factory layout encompassing a Pull system of production that moved towards Single Piece Flow.
Raw materials were fed by Kanbans and stocks controlled by Visual Management where possible. A 5S approach to housekeeping was instigated to ensure that the improvements would be sustained. The entire process was controlled and monitored using a series of simple KPI's that also enabled basic product costings to be derived for the first time at the company.
As a result of the Lean Manufacturing project, labour productivity was increased by 12% and use of floor space was improved by around 60%, in addition to a number of other less tangible benefits. The consultancy fees wererecouped within 6 weeks.
Manufacturing operations
The client is a long-established manufacturer from a traditional UK industry. During the past few years sales turnover had been static and profits declining, mainly due to an influx of cheaper products from the Far East. Although several new machines had been installed, the operations and processes from within the remainder of the production facility had not been examined for many years.
Our brief, therefore, was to review all aspects of manufacturing and to recommend how the client could raise productivity, leading to a more competitive position in the market. Recommendations included:
Changing shift patterns
Re-deploying surplus manpower
Improvements in working methods
Devising a series of KPI's
The report was delivered on schedule and within budget. Implementation occurred over a period of several months, without any IR difficulties. The client is now operating at the same level of output, but with fewer staff and less overtime and shift premiums. Resultant savings were around £250k per annum.
Factory layout
This company was only formed during the mid-1980's and had rapidly grown from humble beginnings to a multi-million pound operation. The production facility, which comprised of two units totalling 60,000 square feet, was now wholly inadequate and was impacting upon the overall efficiency of the business:
Materials, WIP and finished goods were scattered everywhere
There was no clear flow of work
Further expansion was virtually impossible
The company had recently acquired a new 100,000 square foot facility and aimed to consolidate operations onto this site. Our brief was to provide a factory layout that solved the previous problems and catered for Single Piece Flow, from the raw material stores fully through to the finished goods warehouse. This meant that products that were planned for production at the start of the day could be despatched the same day.
In this instance, the factory layout was introduced to the client, accepted and simply handed-down to supervisory staff for implementation. The transition went smoothly and we were not asked to change any single aspect of the layout. Other than the obvious benefits of providing the client with a layout for the new factory, productivity was improved by around 4%, meaning that the consultancy fees were recouped within 4 weeks.
Cost savings evaluation
This client had a dilemma - a supplier that claimed to be able to provide cheaper and better raw material had approached them. The budget was c£1.0m per annum and the potential saving around 20%. On the face of it, the decision looked obvious. However, there was a snag - the client had to take large amounts of material that was of a variable quality. Some was better than the specification - but some was also worse.
Our brief was to compare the two suppliers and to recommend the best option. This entailed evaluating the raw material in terms of the main issues, including:
% of good vs. reject
Supplier delivery and reliability
Material yield through the machining processes
Extra labour required to cope with the re-work
Initially, deliveries were analysed in terms of useable material. The good quality material was then tracked through each part of the machining process to determine scrap and wastage levels. Having compared the two suppliers both statistically and logically, the conclusion was reached that the original supplier was the best. Although substantial savings could be made at the purchasing stage, costs escalated throughout the process and these savings were subsequently negated. The project was concluded successfully, on budget and within the agreed time scale.
