Supply Chain Reset
After an MRP implementation, our client found themselves in a dire situation of rapidly deteriorating service due to unavailable components. A quick diagnostic revealed that the system configuration was not meeting the needs of the buyers and therefore was not effectively being used.
Over the span of the next two weeks, we worked closely with the buyers and IT department to identify, test, and update parameters in the system to match their business conditions. We reset the entire supply chain, reconfiguring MRP parameters and processes to optimal levels and adjusting purchase orders and production orders to match. We conducted daily training sessions and one-on-one support for the new configuration, ensuring that they buyers not only knew what the system was doing, but also why it was doing it. Periodic monitoring over the next several months enabled us to confirm the changes were having the desired effect during both peak and off-peak seasons.
Service level quickly rebounded from 55% back to pre-MRP levels over 98%. Inventory briefly peaked as new components were brought in, then gradually declined as excess components were consumed. After six months, inventory was 25% below pre-MRP levels, achieving the original goal of the MRP implementation.
Planning for Productivity
After issues at a competitor opened up new business opportunities, our client found themselves unable to capture available customers due to limited capacity.
We quickly identified the key drivers limiting productivity, and implemented optimal production sequencing, resulting in the identification of the true bottleneck operation. We then reconfigured planning logic and processes to optimize the bottleneck and improve overall throughput and efficiency. We then built feedback mechanisms into the system, providing planners and schedulers the ability to immediately incorporate improved productivity into the facility's operating plans.
In three months, the teams improved productivity by over 20% and cut waste by 50%.
After a period of rapid growth, our client found itself reaching the limits of their current production capabilities. With strong growth still projected for the future and a long lead time required for expanding capital investments, we looked internally for ways to unlock productivity from their existing network.
With multiple facilities of varying ages, capabilities, and efficiencies, we rebalanced their network of plants to ensure the highest efficiency plants were running with the least downtime and focused their lower volume and lower efficiency facility on the more problematic C-SKUs that were constraining productivity. The high volume plants dramatically increased their productivity, and the low-volume plants were able to maintain previous levels of productivity by focusing efforts on quick changeovers and flexible production. In addition, we identified and captured an additional $1M in annual savings in the facilities' packaging operations.
In six months, the teams improved productivity by 20%, driving $3.5M in annual savings and delaying the need for a $70M capital investment by 4* years.
* Due to changes in demand over the subsequent 2 years, the capital was eventually able to be delayed 7 years.
Our client was in need of cost reductions to maintain competitiveness in a declining, capital intensive industry. After a short diagnostic, we identified waste reduction opportunities in both materials and labor. Taken independently, each of these opportunities were relatively small, but their cascading effects through the multiple stages of production totaled a significant loss in both material utilization and productivity loss.
We launched teams focused on three critical areas. First, at the planning stage, jobs were planned with too much buffer, resulting in significant amounts of waste by the end of production. By improving both the precision and accuracy of processes losses, planning was able to avoid generating a large amount of waste with no appreciable increase in shortage risk. Next, the setup process at several key stages was redesigned, capturing both waste reduction and productivity improvement. Finally, small changes were made to match the product design to the existing equipment's capabilities, resulting in less waste generation and no changes to the finished product.
Through better material utilization, improved planning logic, and reduced downtime, the plant reported a 20% reduction in material waste and a 10% improvement in productivity.