Exceeding the Customers Expectations - Case Study
The aim of any profit making manufacturing organisation is to ensure any project is completed within a set budget, and to ensure the customer is satisfied with their performance; in regards to both the timely delivery and quality of the supplied product.
Unfortunately, with any organization it is often easy to become engrossed in the daily operations of achieving a project goal, thus complacency appears, route causes are not ascertained and any solutions agreed by key stakeholders and decision-makers are rarely implemented, or in worse cases not even identified as a need for the business.
The following case study identifies how Succinct Solutions was able to work alongside their key personnel within a manufacturing organization, greatly improving a project which was destined for inevitable failure. Through the utilisation of a proven toolset, based around the theory of constraints and lean principles, Succinct Solutions revitalized their manufacturing process and increased the business output.
The Problem
The customer delivery rate for the product concerned was contracted at a minimum of 15 units per month over a five year period. At the time of instigating this project, the business had never achieved above 10 units per month.
The current manufacturing process was labour-based, had high level of inventory, frequent material shortages, and no Work Flow methodologies had been adopted at that time.
The aim given to Succinct Solutions was to:
a) Improve throughput to meet the 15 units per month customer requirement
b) Upon improving the throughput, demonstrate how the bottom line savings would be made within the project
c) Improve the cycle time of the process to further reduce costs
d) Present a road map demonstrating how to maximise the most out of the working area, irrespective of current company limitations
e) Implement a method for ensuring any improvements were maintained indefinitely
The Solution
The project was split into four key stages - the first stage was to determine the goals of the improvement activity and to understand the production process. During this stage data was gathered using predetermined Key Performance Indicators (KPI’s) to identify where the biggest problems were occurring and to gain understanding as to the potential of the manufacturing process. Assessments were made from the results of these KPI’s with regards to the performance of speed, quality and cost so the underlying problems could be highlighted.
The second stage was to hold a weeklong kaizen event involving all key personnel; to enable the route causes of problems to be identified. This progressed with the use of Value Stream Mapping (VSM) tools, used to identify where wasteful activities could be removed. From the VSM a single piece flow line was developed along with supporting kanban systems for all required sub components. This removed delays from material shortages and was able to stabilise the manufacturing process, ensuring a consistent flow of product was achievable. Further analysis was conducted to assess and improve the one piece flow line.
The third stage of the project was to generate a plan for further improving the process; it was possible to demonstrate how, with additional investment (or minor policy changes) the throughput could be exceeded to such an extent that the constraining factor, for the manufacture of the product, would be outside of the assembly line itself and into one of the supporting functions of the business. This gave the company a long-term target to contemplate and strive towards if deemed worthwhile.
The forth and final stage of the project was to implement sufficient cultural changes and management processes, ensuring the improvements made were sustained indefinitely. To accomplish this, a self-directed work team was instigated within the manufacturing floor, to ensure full ownership of operations within that area was held by those performing the activities. This cultural change involved the members of the area owning and maintaining the KPI’s already determined, and understanding how they are directly linked to the company’s bottom-line performance. Members now had full ownership of problems encountered, and input into their solutions.
Bottom Line Results
At the end of the project all of the targets set for Succinct Solutions were fulfilled, and in some cases greatly exceeded. As a result of the improvements made it was forecast that the project would be completed nearly one year sooner than originally anticipated. This was achieved predominantly by increasing the throughput from the original 10 units per month to 16 units per month, exceeding the customers 15 units per month expectations. It was also highlighted that with minor policy changes this could be increased to 20 units per month, doubling the original output and maximising current production levels, without major investment.
In addition the cycle-time to manufacture one unit reduced by 9% from 43.1 hrs to 39.5 hrs. Furthermore, a 6% reduction in Work in Progress (WIP) of the deliverable product was also achieved through the implementation of the single piece flow line, and over 20% reduction in WIP of piece parts was achieved through the implementation of the kanban system.
In total a bottom line saving of £660,000 was predicted for the project as a direct result of the improvements made. A further cash flow saving of £60,000 per month was also achieved due to reduced inventory and increased deliveries.
