Recent Case Studies
Flow Consulting Assessment and Intervention Case Studies
Business Issue: Affordable Raw Material Storage Needed. (November 2013)
A growing building supplies manufacturer was running out of room and wanted to convert warehouse space to make room for a new product line. The plan was to change from traditional pallet fork trucks and pallet racks to expensive Very Narrow Aisle lifts and racks at a cost of almost $500,000. This was a significant capital expenditure for a small business with annual revenues of $30 million.
Approach Used by Flow Consulting:
While compressing the warehouse footprint by going to Very Narrow Aisle warehouse concepts would have freed up the needed space for the new production equipment, it would come at a steep cost and would only buy just a couple of years of breathing room. Rather than suggesting other solutions we conducted training on inventory turns analysis, demand segmentation calculations, inventory aging analysis, and calculating appropriate statistical safety stock.
After working with key leadership to understand the inventory transactions and calculating consumption, demand standard deviation, and new order points, the business leaders realized that if they purged the dead inventory and tightened up their purchasing parameters, they could comfortably reduce their inventory by 50%, in effect doubling inventory turns. Now they wouldn’t need as much warehouse space, and so the project to move to Very Narrow Aisles was cancelled, saving precious capital that was used toward paying down debt. Cash flow also dramatically improved as they burned off their excess inventory.
Business Issue: Incoherent Finished Goods Dock Operations. (November 2013)
The same client was running out of room to stage finished customer orders. Product would move to the shipping dock and ‘park’ wherever there was room. When it came time to load the delivery trucks, it was a treasure hunt across the whole dock to find all of the customer orders. With an additional 30% growth expected, the client knew that the current mode of operation would lead to chaos.
Approach Used by Flow Consulting:
Flow Consulting worked with leadership to evaluate various alternatives to expand dock space that included a plan to add more vertical storage. A quick inventory aging review concluded that finished goods were arriving on the dock out of sequence; order produced earlier than needed were clogging the limited dock space. A purge and a change to the production scheduling routine got the dock flowing again.
The business avoided spending $100,000 capital to increase finished goods storage space, while also reducing customer order lead time by 15%.
Business Issue: Factory had more product orders than places to build them. (October 2013)
Our HIGH FLYING COMPANY LEAN JOURNEY began after our site experienced dismal performance results in Q4 2011. To paint a picture of the time, the Shreveport factory had more product orders to build than places to build them.
In earnest to process all orders for customers, the cost structure started growing exponentially. We missed delivery expectations and lost customers. At the same time, the Shreveport factory had just acquired 4Birdie with double-digit growth quarter over quarter. The factory began to experience growing chaos in order to respond to the needs of all internal and external customers. Chaos manifested in the form of escalations, a higher ratio of contingent labor, high attrition rates, unpredictable deliveries, and stressed quality levels. In order for the Shreveport site to continue to be considered a pivotal UMBRELLA COMPANY manufacturer to our customers, we needed a new approach to produce products with high quality, predictable delivery, and greater velocity at a lower cost. That is when they began to work with Flow Consulting to develop a new approach.
Approach Used by Flow Consulting:
A few courageous leaders had the vision to use Lean as the revolutionary approach. Spearheading the effort was Debra Smith, who had the role of HIGH FLYING COMPANY Engineering and Quality Director. Within her organization, Engineering Manager Sean Jones hired three experienced Black Belts from external companies as continuous improvement experts. They each came from companies that were highly respected for their accomplishments in Lean manufacturing, Six Sigma, Leadership, and Change Management. Debra collected these resources to set a course on a new grassroots journey — The HIGH FLYING COMPANY LEAN JOURNEY.
The agreed upon program approach was to work with Flow Consulting to develop a continuous improvement program with the intent of bringing together cross functional teams to:
The concept was to customize an interactive Lean Green Belt/Black Belt program that would grow a cadre of individuals that were educated in the tool sets of Lean, Six Sigma, leadership, and change management. In addition to completing the educational requirements, it was imperative that candidates practice the new skills on a tactical project that resulted in measureable results. The expectation was that as an individual progressed, they in turn would lead and influence continuous improvement with their managers, peers, internal/external customers, and daily work. The more people working with a holistic view, understanding their immediate customer/supplier relationships, removing waste, and improving quality at the source, the more the revolution would accelerate. Flow Consulting developed the Green Belt training specific to the needs for this program, and also conducted all of the training, while partnering with the three internal Black Belts to provide mentoring for the Green Belt trainees.
With each major deployment, the projects grew larger in scope and produced better results. Green Belt Wave 1 tackled the end–to–end improvement of the newly acquired 4Birdie value stream. Green Belt Wave 2 pursued the redesign of the integrated MIDDLEX product. Black Belt Wave 1 introduced demand segmentation to transform the entire electronic devices factory. Each wave was responsible for improving Quality, Stability, Velocity, and Cost to ensure we were meeting the needs of the customer, stakeholders, and our UMBRELLA COMPANY business.
Each team started the project with bold targets of making the value stream move twice as fast, with twice the quality, at half the cost and in a third less space in order to push past the current state paradigms. This challenge proved to be the proper fuel for revolutionary thinking.
The results listed below are the percent change improvements demonstrated in each project:
Green Belt Wave 1: 4Birdie Assembly Results demonstrated in this project included 38% decrease in median factory order cycle time, 10% increase in on time delivery, 146% increase in test first pass yield, 90% increase in labor productivity, and 26% improvement in space utilization.
Green Belt Wave 2: Integrated MIDDLEX Assembly Results demonstrated in this project included 41% decrease in median factory order cycle time, 49% decrease in F95 factory order cycle time, 42% improvement in space utilization, 15% improvement in test first pass yield over traditional lines, 129% increase in labor productivity, and 50% decrease in capital expense.
Black Belt Wave 1: Assembly Metamorphosis Results demonstrated in this project included 60% decrease in median factory order cycle time, 77% decrease in P95 factory order cycle time, 33% improvement in space utilization, 10% improvement in test first pass yield over traditional lines, 53% increase in labor productivity, and 66% decrease in capital expense.
Since late 2011, when the High Flying Company began the program development and execution of the first three successful projects that started our Lean journey, the effort has led to the development of 3 Lean Master Black Belts and 40 Lean Green Belts, while engaging over 500 cross-functional kaizen participants. By the end of Q1 2014, another 20 Green Belts and 7 Black Belts will graduate. In a span of 18 months, nearly 75% of the Shreveport electronic devices business and 50% of the stacked product business has been transformed through organic growth of Lean project leaders.
Business Issue: Long Lead-times for Make-to-Stock/Make-to-Order Products (August 2013)
A Flow Consulting client was experiencing long lead-times for both 'make-to-stock' and 'make-to-order' products that exceeded their competitors' lead-time performance. These issues negatively affected sales performance and growth.
Approach Used by Flow Consulting:
Matt Stevens, a Flow Consulting Partner, led the client in forming a cross-functional team that included sales, production, customer service, and planning. The team kicked off a kaizen cycle, preparing with four weeks of exhaustive data collection and analysis. The Vice Presidents of both Sales and Operations provided hands-on sponsorship, providing the team with goals aimed at meeting or exceeding customer expectations and out-performing key competitors.
The cross-functional kaizen team executed a four-day kaizen event and a follow-up day of project planning. The team focused on three specific areas — Order entry / confirmation, Inventory strategy based on demand segmentation, and stream-lined order fulfillment.
The team put in place projects that will result in a reduction of cycle time from current levels ranging from 8 to 19 days today, to just three days in the future on 'make-to-stock' products that constitutes 70% of company volume. All of the solutions are set to be put in place within 60 days. Cycle times for 'make-to-order' products will be reduced from a range of 15 to 30 days today to no more than 14 days in the future.
Business Issue (Behavioral Lean Safety): Maintain a sustainable competitive advantage by creating an industry-leading behavior-based safety (BBS) program.
|Cycle Time (median)||6.1 Days||3.6 Days||41% Decrease>|
|Cycle Time (P95)||14.2 Days||7.2 Days||49% Decrease|
|Wait Time Median||36 Hours||24 Hours||32% Decrease|
|Wait Time P95||170 Hours||109 Hours||38% Decrease|
|Space Utilization||5100 Sq. Ft.||3450 Sq. Ft.||32% Decrease|
|Fixed Cost||~$1.2M||$600K||50% Decrease|
NOTE: In short, the product line is moving twice as fast, in a third less space, at half the cost.
This Green Belt effort was the second 'wave' to attack significant opportunities at the company. The first wave approached a slightly smaller Value Stream, with equivalent results. In 2013, the company has asked Flow to deliver the 3rd wave of GB trainees, and to develop 5 Black Belts.
A Fortune 50 manufacturer of high-end electronic storage solutions was assimilating a recent acquisition, and had transferred the product into their existing production footprint. The product line had first time yields of less than 20%, long lead times, poor delivery performance, and high labor costs. This is a strategic, growing product line for the company. As a result of the poor performance, the Business Product Team was considering moving the assembly area out of the current manufacturing location. In parallel, the company was considering different approaches to incorporate Lean Manufacturing. Some personnel had received on-line training, but the skills did not translate to the needed improvement on the product line.
The 20 Green Belt candidates were divided into coordinated sub-projects, focused on the product line; quality, takt time/flow, and material preparation/delivery. The course was taught in four three-day sessions across four months. In addition to the training, Flow Consulting provided extensive on-site mentoring between the training sessions, to ensure success and knowledge transfer.
The teams progressed through the DMAIC phases of our customized LeanSigma methodology. Over five months, entirely new physical and business processes were developed and put in place, from Order Drop to Shipping. Trials were conducted, cultural and leadership issues were addressed, and staffing and support levels were modified to match the product Value Stream. The product line was fully implemented, stabilized and measured.
the Impressive Results:
NOTE: As a direct result of Flow’s collaboration and unique approach, the product line is significantly better, faster, cheaper and more predictable. The company has asked Flow to repeat the process on a more complex, higher mix product line. Green Belt Wave 2, again with 3 project teams, is currently underway.
A mid-sized home-delivery provider of specialty consumer goods had acquired several businesses in adjacent markets resulting in multiple operations with degrees of overlap. The parent desired to have all its operations integrated and excess assets and personnel rationalized. The mandate was to complete analysis and planning within four weeks, begin implementation immediately after, and to take immediate action where indicated.
Matt Stevens worked with the CEO, CFO, and COO to identify all areas of spending, operational overlaps, and outside forces that affect location decisions. He led the data gathering, organization and analysis, and designed a full-day rationalization planning meeting. Facilitating the leaders and other key players from finance, marketing, and operations. Matt helped the group to isolate all potential savings from rationalizing redundant locations and activities. Following the structure and leadership provided by Flow Consulting, the team worked through the support requirements and determined what additional analysis was needed for further savings.
One of the leading providers of fireplace hearths and woodstoves in America and Canada was experiencing significant issues with labor efficiencies, cycle time, inventory, and customer deliveries to promise.
Flow Consulting's Robert LaVigne (with deep expertise as lean operating executive) was retained as the senior interim operating executive. He performed a
rapid assessment to determine the key causes for the issues most affecting customers and profitability. He worked with his peers and the CEO to develop a
strategic plan to implement a Sales and Operations Planning process, and moved offshore production back to the U.S. to fill internal capacity.
In addition, Robert led exhaustive time studies of each product line and implemented one-piece flow in every assembly line. He then introduced Key Performance Indicators (KPIs) to the shop floor and worked with the shop to monitor and respond to issues based on the KPIs.
Major improvements within 8 months:
A medium-sized international consumer products company had outgrown its homegrown Supply Chain Management system and was experiencing severe supply and inventory issues.
Flow Consulting performed a comprehensive baseline analysis to develop an improvement strategy. Flow consultant Jeff Brown gathered an international team to analyze the current situation and to develop a future state plan to fully use the capability of an installed, but unused ERP system.
The immediate impact improved the inventory accuracy from low 80 percent to more than 98 percent allowing more efficient production planning and raw material ordering. Over a three month period, the sales orders, inventory levels, and production plan were tied together allowing a shift to Make-To-Order operation for all main products. Inventory levels were reduced by 31 percent based on actual sales with an end goal of 40 percent. Lead times were improved by 25 percent. Model changeover obsolescence was reduced by more than 70 percent. As importantly, the cooperation of all parties in the supply chain improved remarkably as a single, visible and properly coordinated plan competently directed the operations.