What does a Lean transformation look like?
Note: No team members were terminated as a result of the improvements below. They were freed up to work in other areas or new departments and were available short term to accelerate the Lean initiative.
Mack Story achieved amazing results while leading a 3 year Lean transformation from traditional batch & queue to Lean single piece flow in a manufacturing/assembly plant with 200+ employees.
ACTUAL RESULTS
- Gross Profit Margin (BEFORE) -3% (AFTER) +35%
- >50 kaizen events conducted
- Before: all 150,000 ft2was utilized
- After: >70,000 ft2was freed up for growth
- ~30% of employees were freed up to fill new jobs
- 4 new departments were added ~50 new jobs
- Over 10,000 ft2was still available for future growth
- Eliminated the need for a 30,000 ft2off-site FG warehouse
- 85% reduction in employee turnover
- >90% reduction in WIP within production lines
- 40% increase in sales: $55 million in 2005 to $77 million planned in 2009
- 200% increase in annual cost reductions: from $1 million to $3 million
QCO/SMED in Textile Plant
Before
- 108 minute changeover/setup time
- 3,331’ operator travel
- 181 changeovers/wk @ 108 min= 325.8 hrs/wk or 16,290 hrs/yr
- Annual labor cost @ $120/hr for 4 EE= $1,954,800
After
- 20.73 minute changeover/setup time (81% reduction)
- 1,324’ operator travel (60% reduction)
- 181 changeovers/wk @ 20.73 min= 62.5 hrs/wk or 3,126.78 hrs/yr
- Annual labor cost = $375,213 (81%) reduction
Results
- Reduced 3,440 miles of internal operator travel annually
- $1,579,587 annualized labor savings across 181 changeovers/setups
- 553 days additional capacity or the equivalent of 2.2 machines @ $1.5 million each = $3.31 million in savings because new machines were being purchased to support demand
- Total cost reduction = $4.9 million
5-day Standard Work kaizen event-fabrication/assembly department
- 40% reduction in labor- 15 operators to 9
- 43% reduction in floor space- 3,862 ft2to 2,188 ft2
- 81% reduction in total operator travel- 502′ to 96′
- 99% reduction in WIP- 948 pcs to 6 pcs
- $342,000 annualized cost reduction
5-day Standard Work kaizen event-fabrication/assembly department
- 14% reduction in labor- 14 operators to 12
- 17% reduction in floor space- 5,902 ft2to 4,908 ft2
- 28% reduction in total operator travel- 586′ to 423′
- 6% reduction in part travel- 271′ to 256′
- 79% reduction in WIP- 76 pcs to 16 pcs
- $$annualized cost reduction TBD
2-day 3P (Production Preparation Process) kaizen event for a proposed new model- fabrication/assembly plant
- 27% reduction capital expense- $858,817 to $623,830
- 83% reduction in labor- 12 operators to 2
- 75% reduction in floor space- 3,600 ft2 to 900 ft2
- 46% reduction in standard cost per unit- $113 to $52
3-day Quick Changeover event- tube bending machine
- 66% reduction in changeover time- 109 min. to 37 min.
- 20% reduction in floor space- 971 ft2to 778 ft2
- 86% reduction in operator travel- 3,396′ to 472′
- $4,300 annualized cost reduction
3-day Quick Changeover event- automatic shear
- 56% reduction in changeover time- 48 min. to 21 min.
- 10% increase in productivity
- 100% increase in capacity- BEFORE: 1 operator per shift on 3 shifts (full capacity); AFTER: 2 operators per shift to share setup which allowed two working together to produce 10% more than 2 working separately (resulted in 1 1/2 shifts of new capacity if potentially working 3 shifts with 2 operators per shift)
- $64,000 annualized cost reduction
5-day Standard Work kaizen event- fabrication/assembly department
- 30% reduction in labor- 30 operators to 21
- 52% reduction in floor space- 4,834 ft2to 2,300 ft2
- 42% increase in total operator travel- 130′ to 184′ (prior to event no work was shared… 1 person per machine)
- 14% increase in productivity per person per hour
- 75% reduction in WIP- 161 pcs to 40 pcs
- 52% lead-time reduction -30 min to 14 min
- $51,000 annual scrap reduction
- $750,000 annualized cost reduction
5-day Standard Work kaizen event- fabrication/assembly department
- 20% reduction in labor- 5 operators to 4
- 73% reduction in total operator travel- 385′ to 104′
- 56% reduction in part travel- 180′ to 80
- 73% reduction in WIP- 26 pcs to 7 pcs
- 85% reduction in lead-time- 79 min. to 12 min.
- $$annualized cost reduction TBD
5-day Standard Work kaizen event- paint department
- 38% reduction in labor- 6.5 operators to 4
- 49% reduction in floor space- 9,982 ft2to 5,088 ft2
- 80% reduction in total operator travel- 243′ to 48′
- 175% increase in output- 400 pcs to 1,100 pcs per shift
- $207,000 annualized cost reduction
5-day Standard Work kaizen event- fabrication department
- 27% reduction in labor- 11 operators to 8
- 54% reduction in floor space- 5,237 ft2to 2,409 ft2
- 91% reduction total operator travel- 837′ to 75′
- 99% reduction in WIP- 2,710 pcs to 10 pcs
- 72% reduction in overtime
- $366,000 annualized cost reduction