Baseline: Production lines at 60% efficiency; On-time delivery at 73% and months of extra inventory to absorb inefficiencies.
Improvements: Production lines efficiency increase to 98%. On-time delivery to customers at 99%. No more than one day of inventory.
Corporate HQ from a manufacturing company that supplies car components to big car manufacturers prioritized to incorporate Lean Manufacturing across their sites worldwide. We supported the site in Mexico to implement Lean Manufacturing concepts into production lines.
We analyzed their processes using value stream mapping, operator balance charts and material flow. We incorporated a Plan for Every Part (PFEP) for the parts and final inventory, and we designed tugger routes to efficiently deliver the parts on time to the production lines and to the car manufacturers. We incorporated pull systems that triggered when a change of model needed to be built and when material needed to be replenished.
In less than 9 months, we revamped the production lines and increased efficiency from 60% to 98%. On-time delivery to customers increased to 99%. Inventory buffer was reduced to a day of inventory, instead of months. The Mexico plant was recognized for the Shingo Silver Medallion, and this became a benchmark to the rest of the plants worldwide.
Baseline: Gross margin declining from 22.5% to 16% over an 18-month period.
Improvements: Product gross margins increased from 16% to 25%.
This fortune 500 company was experiencing gross profit declines for one of their key products sold globally, these declines went from 22.5% to 16% over a period of 18 months.
We used the Lean and Six Sigma frameworks to analyze manufacturing process data, process workflow and production costs. After implementation, the product margins increased from 16% to 25%.
