Manufacturing Agility: Synchronizing Flexible Cells for Specialized Products

Industrial Products Manufacturer/Distributor $80mm Sales Revenue

To assess the current situation, and determine how the factory can reduce throughput time and costs, Rockford Consulting Group was asked to perform an analysis of operations and make recommendations for improvement. The objectives of this assignment were to:

• Review manufacturing operations in detail to gain an understanding of products and processes
• Identify opportunities to decrease throughput time, increase productivity, reduce lead times and reduce manufacturing costs
• Develop recommendations on an improved means of manufacturing, and
• Estimate the effort and the benefits and determine how to proceed

Our review of the facility revealed a plant configuration consisting of flow lines and equipment organization by process: presses, brakes, shears, paint lines, assembly, etc. We observed that a large part of the floor space was occupied by inventory.  Of total available plant space, 36% was used for storing inventory. We discovered that the  plant was scheduled by work orders that “pushed” products through.  Work orders were used in conjunction with a “Hot List” to identify priorities.  The resultant effect was that batches of product moved through the plant in groups occupying large spaces in staging areas, rather than producing to pure demand. A process strategy of batching parts as they move across the shop floor created stage points and excessive work-in-process inventory.  It also added to the excessive throughput time in the plant. We concluded the following:

• The current plant configuration was not conducive to short throughput time
• Set-up times were long and contributed to excessive throughput time
• Multiple stage points contributed to excessive throughput time
• Utilization of 600-Ton and 100-Ton presses was excessively low
• Plant efficiency was low due to non-value tasks being performed by operators
• The plant was measured in monthly dollars generated resulting in product produced for monthly revenue, whether or not there was legitimate demand for it.
• Batch processing contributed to long throughput time
• Manufacturing changeover times could be reduced to 4-10 minutes
• Manufacturing throughput time could be compressed to 1-2 days for standards and 3-4 days for special products
• Manufacturing capacity was available to double the throughput volume
• Velocity in the supply chain network could be increased by reducing throughput time to 24-48 hours for standards, 48-72 hours for specials

Based on the information gathered during the course of the assignment, observations on the shop floor, analysis of the current situation, and our findings, we recommended the following:

• Reconfigure the plant to using flexible cells
• Adopt a process strategy of Delayed Differentiation/Synchronous Manufacturing to reduce lead times
• Develop sequencers to interface between batch/flexible operations
• Develop Synchroflex dispatch sheets for flexible cells
• Schedule operations on a daily basis
• Size/Purchase wheeled carts to serve as flexible Kan-bans
• Develop Supplier Delivery On Location arrangements with steel suppliers
• Outsource shear operations with pre-cut sheets
• Produce pre-cut blanks for sequencer storage in blank sub-cells
• Reengineer set-ups in detail to reduce changeover times as close to 4 minutes as economically feasible
• Develop/purchase tooling required for quick changeover
• Develop new performance metrics for the facility based on throughput time, delivery performance, actual-to-posted lead times, inventory turns, quality, etc.

The results of the review provided the following benefits:

• One-time reduction of work-in-process inventory of 53%
• 86% increase in work-in-process inventory turns
• Estimated annual savings of $1.0 million in manufacturing cost, and inventory carrying cost
• 4 month payback period for the investment
• Manufacturing throughput time reduction of 93%

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