LeanSigma Operations

Reducing the cycle time from customer order
to delivery while dramatically improving quality.

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Business Issue: Combine Four Locations Into One

A global supplier of industrial vehicles and portable electric power units recognized the need to combine four manufacturing locations, all operating well below capacity, into one manufacturing location in order to maximize their return on capital and minimize production impact caused by large demand fluctuations within each location. Total revenue being generated by all three locations was slightly above $200 million.

Approach Used by Flow Consulting:

A team of Flow Consulting consultants worked with the client to:

1. Develop a vision of what the new combined site would be based on maximizing flow and implementing flexible lean manufacturing concepts.
2. Sell the implementation plan to the Board of Directors.
3. Perform a detailed analysis of all product lines to determine optimum operating– and floor–space loading. Created a "dynamic loading" analysis to allow us to model changes to the site as the volumes change every year.
4. Develop the overall project plan (1800-step Gantt chart in Microsoft Project) and train a project team in the tools to ensure a successful move.
5. Run a series of three day "Accelerated Problem Solving" sessions linked to key project milestones, utilizing cross functional teams of hourly personnel, engineers, purchasing agents, and supervisors to lay out the new production areas with lean manufacturing frameworks.
6. Project manage every step of the Gantt chart with real–time reactions and corrections as needed.
7. Provide quarterly updates to the board of directors of the firm.

Results:

All four businesses are now operating as one entity at one location with shared resources and movement of hourly personnel as needed to support business fluctuations. The business has achieved more than $10 million reduction in fixed costs and sold the two closed locations for $5 million. Each product line that moved experienced more than a 35 percent reduction in direct labor costs, more than a 50 percent reduction in cycle time, and up to a 65 percent reduction in required floor space.

Business Issue: Slow Manufacturing Cycle and High Product Costs

Microchip test equipment manufacturer believes that its manufacturing cycles are too slow and its product costs are too high.

Approach Used by Flow Consulting:

Flow consultants implemented comprehensive leadership driven "Lean Enterprise" principles and a series of "Accelerated Problem Solving" sessions with both exempt and hourly personnel.

Results:

Flow Consulting achieved a 27 percent reduction in direct labor, a 53 percent reduction in cycle time, a 59 percent reduction in required floor space, and a 38 percent reduction in defects found at test.

Business Issue: Lengthy Cycle Times and Excessive Inventory

Automotive original equipment manufacturer believes that its brake-puller cycle times are far too long and that its inventories are excessive.

Approach Used by Flow Consulting:

Flow consultants used "Lean" principles and an "Accelerated Problem Solving" session, to move from a process–centered product flow, to a product–focused cell.

Results:

Flow Consulting reduced production costs on a $47 unit by $6.17. They also reduced the in–process and raw–stock inventory from more than $600,000 to $19,000. Flow consultants also reduced customer response time by three weeks — from 30 days to three days.

Business Issue: Lengthy Machine Downtime

Die casting supplier in automotive original equipment had unnecessary machine downtime caused by product scheduling and setups.

Approach Used by Flow Consulting:

Flow consultants performed a series of "Accelerated Problem Solving" sessions focused on uptime, productivity and setup reduction.

Results:

The uptime team uncovered an extra 22 hours of production per week netting more than $1 million in additional product per year. The productivity team reduced prep staff from 18 to 12. The setup reduction team reduced the die changeover time from an average of 33 hours to an average of 8.2 hours — with very little investment — resulting in an additional 500 hours of additional production time of production per month.

Business Issue: Production Costs Erode Margins

A global manufacturer of pharmaceutical products was experiencing frequent packaging–line stoppages of a common over-the-counter cough syrup. Production costs had risen to erode margins on this product.

Approach Used by Flow Consulting:

Flow consultants collected data in which line stoppages were recorded for cause, location and duration. A kaizen team was assembled whose goal was to increase overall line–throughput from 23,000 bottles per shift to 35,000 bottles per shift. The kaizen team performed a combination of root–cause analysis, SMED, and Standardized Work Techniques to improve line performance.

Results:

During the three–day kaizen, several changes to the line equipment were implemented to overcome the root causes of several key problems. Line output increased to approximately 30,000 bottles per shift immediately. After two months of operation and incorporation of remaining changes proposed by the kaizen team, line output has risen to a stable output of 51,000 bottles per shift. The cost of implemented changes was less than $5,000.

Business Issue: Product Specs/Customer Timing for Technology Start Up

A technology start–up division of a major U.S. manufacturer needed clear definition of product specifications to meet customer needs and to better understand the timing of customer requirements.

Approach Used by Flow Consulting:

Flow consultants collected extensive customer information through face-to-face and telephone interviews and electronic and web-based surveys. This database of information was used to guide a workshop of company executives and engineers through a thorough "Quality Function Deployment" analysis to develop a detailed product specification and marketing/product release strategy.

Results:

The Flow Consulting Team successfully developed and launched two new products in less than 12 months with positive customer acceptance — instead of the single product planned for an 18 month delivery. The analysis also uncovered a potentially fatal flaw in the company’s product-release strategy that would have brought the wrong product to market too late for a key "benchmark" product–comparison–contract by its number one customer. The analysis also defined two customer groups with significantly different product requirements and price points. The customer interviews also determined that an extremely negative perception existed of companies using the original product and marketing strategies.

Business Issue: Slow Sales Growth/Lengthy Product Development

An extremely successful producer of kitchen gadgets and household tools is experiencing lengthening product–development cycle times and slowing rate-of-sales growth.

Approach Used by Flow Consulting:

Flow consultants performed a "Business Baseline" to analyze key contributors to the problem, and redesigned the organization structure into product–development teams, facilitated streamlining of new product development process, coached on teamwork, scheduling, and communication skills and tools.

Results:

Early indications reveal that cycle times are shortened by 25 percent, with a significant reduction in errors and rework, plus a 20 percent increase in capacity for new products (expected to increase rate–of–sales growth by 25 percent).

Business Issue: Must Cut Manufacturing Costs

Pharmaceutical company facing significant challenges to cut its manufacturing costs.

Approach Used by Flow Consulting:

Flow consultants performed an "Accelerated Problem Solving" workshop to analyze processes and quickly find and deliver opportunities for yield–improvements in mixing and packaging processes.

Results:

Within two weeks the Flow workshop delivered $75,000 in annualized savings and designed relatively simple and inexpensive equipment and procedural improvements that would deliver an additional $500,000 in annualized savings within one month.