Getting to know how Lean 4.0 could be right for you
Background: UK automotive plastic moulded component manufacturer. Implemented flow manufacturing to meet the needs of a new, web-based B2B sales policy. The commitment was to same day shipment of all orders placed before 1pm. In an environment with several thousand SKUs the US management was especially worried because this had built up significant amounts of “just-in-case” or redundant inventory.
Action: As part of a global transformation programme, all manufacturing processes were linked and synchronised in a flow, and driven to replenishment demand from finished goods inventory (FGI) Kanban and dual-card Kanban upstream through assembly, to the moulding machines. Batch quantities were reduced to calculated “days of demand” quantities that produced much faster what was needed to replenish FGI and much less of what was not needed.
Benefits: The benefits included greater Productivity, reduced waste, improved same day customer service by 63%, with total first year cash benefits of £600,000. The British MD and all his staff were delighted to be awarded a “Management Today” Factory of the Year Award.
Background: UK-Scandinavian/global pharmaceuticals manufacturer of tablets, creams, solutions syringes and other delivery instruments. The GM of the largest tablet factory in Europe at the time felt he was up against a “glass ceiling” to business improvement he could find no way through.
Action: Together, we pioneered a production transformation from push-based batch production of forecast “orders” to pull-based, demand fulfilment of individual customer orders. Discrete, mathematically sized reserves of semi-finished inventories between processes were replenished to demand by KanbanPro™ signals.
Benefits: Industry regulated batch quantities were reconciled with In-Progress and Finished inventory levels and customer demand. $1bn in cash was released from Working Capital within 12 months across multiple small to mid-size facilities. This was achieved without detriment to product availability.
Background: Finnish manufacturer of plastic moulded mobile phone components in China, high volume, limited life-cycle, high variability. The Finnish management was under pressure to deliver just-in time (JIT) to their customer but were being forced to do it from Just-in-Case inventory.
Action: Reduced batch quantities to minimum run quantities just sufficient to recover the time lost to set-ups. Machine set-up times were optimised with batch quantities and inventory in this way, whilst maximising productivity and overhead recovery so there was no need to invest in additional equipment. Deployed finite capacity planning tools to redefine the mix vs. capacity criteria of plastic moulding machines. Defined new factory layout utilising old and new machines.
Benefits: Reduced WIP by 65%, finished goods by 45%, obsolescence by 25%. This released $2.75m of cash from product sold, not at discounted rates but at full market price, which did not have to be reinvested in more inventory.
Background: AC purchased a run-down plant in central China machining and assembling drill bits and hammers for quarrying. They had to totally refurbish it while actually having to increase production.
Action: Implemented a lean, pull-based, demand driven production system, to improve productivity and reduce waste and costs.
Benefits: After plant refurbishment the factory footprint was reduced by 25%, response time to customer order was reduced from 6 weeks to 1½ weeks. Working Capital was reduced by $4m within 3 months of implementation.
Background: Saudi manufacturer of large chillers, medium and smaller HVAC units, to meet year round Middle East demand, had outgrown their current facility.
Action: Created the design/layout of a new factory in a Mixed Model flow and synchronised production of the copper and sheet metal components to seamlessly meet demand from the assembly lines.
Benefits: Order lead time was reduced by 70% and a reduction in inventory provided first year cash saving of $18m with a $2m annualised saving thereafter.
Background: German manufacturer of packaging and labels. Large annual blanket orders could be called off in irregular quantities at monthly intervals. The frustration was that batches of several months’ worth of products, made to maximise overall equipment efficiency (OEE) were frequently scrapped as a result of changes to print design often made at short notice.
Action: Established a variable finished goods inventory Kanban system and a demand driven production planning tool. This optimised OEE with lead time and inventory while reducing set-up times to compensate for smaller batches.
Benefits: Management team enabled to improve quality, productivity and made first year cash savings of €3m with annualised savings of €2m thereafter.
Background: US pharmaceutical facility in France manufacturing mostly veterinary products. Conflict with the labs releasing raw material early to production that was not needed while what was needed was being held up to gain testing performance efficiencies.
Action: Synchronised pre-production laboratory testing of raw materials with batch production through visual planning boards and a Kanban pull system.
Benefits: Reduced raw material inventory by €7m and made 95% of scheduled demand available to production within 2 days instead of 2 weeks, so order fulfilment was not constrained by laboratory resource planning.
Background: German machine-intensive and robotic assembly plant, producing hydraulic valves and motors. They were debating over a costly and time-consuming capacity upgrade.
Action: Customised planning tools that optimised overall equipment efficiency with batch size while reducing set-up times to compensate for smaller batches. Linked this to a pull system driven to customer demand.
Benefits: Increased capacity by 18%, without increasing the number of machines. Reduced inventories by €4m, improved customer service levels and reduced manufacturing lead time from 3 weeks to 3 days.
Background: Global electronics sub-contract manufacturer of surface-mount technology boards, and box build products had recently acquired a facility in the Czech Republic. Local management had been made to promise significant improvements.
Action: Designed and managed a factory transformation from ‘make-to-forecast’ to a lean, pull driven ‘make-to-order’ demand flow environment.
Benefiits: Reduced waste and rework, improved productivity and inventory management, with first year cash savings of $8m and order lead time reduced by 80% to 3 days.
Background: Manufacturer of micro electric motors and gear boxes supplying the automotive and aerospace industries in a rambling 3-storey facility high in the Swiss mountains. Product would often get “lost” before completion and had to be re-made, driving up costs, extending lead-times, and losing business.
Action: Redesigned factory layout so that all 13 product families were produced in two mixed-model flow lines on just one floor of the building instead of three.
Benefits: Reduced the production footprint by 75%. One floor was sub-let and the top floor transformed into an employee recreation area complete with palm-trees. Further, the demand driven production system met all customer on-time in-full (OTIF) requirements, inventory turns increased from less than 2 to 15, releasing £3m of inventory surplus to requirement as cash to be invested in the business.
To get to know how Lean 4.0 could be right for you