01926 633333Improving Efficiency and Reducing Costs
The Problem
The business sought external support to work with the site team and global Continuous Improvement (CI) team to review a spectrum of activities at their plant in Germany. We were tasked with identifying opportunities to improve operational efficiency and reducing costs including planning sequencing and closing the gap to site budgeted productivity levels.
The improvements looked to target an overall 20% reduction in the cost of the product.
The Solution
The combined team worked together over a short 1-week period at the plant to analyse process data and costs, capture working practices and operational performance and understand:
- Planning
- Scheduling
- Warehousing
- Distribution practices
From this, we were able to create a detailed value stream map and make the following recommendations key to improving efficiency and reducing operational costs:
- Review global inventories and warehouse space utilisation
- Look to determine the optimum WIP and finished goods stock
- Review planning rules – batch sizes and changeovers to meet global requirements
- Material flow – raw, cooling pellets, loading ramps, and offsite storage – sustainable standardised ways of working
- Double handling of bags and stillages – minimise
- Line 3 process is 26% more costly than Lines 1 & 2 – review capacity in Lines 1 & 2.
- Right First Time/Yield loss – reduce 5% reworked from deburr process and 4% wet scrap
- Indirect costs unusually high – review and reshape the team.
- Manual baling process – 67% Muda – Potential saving 30-50% – 100 – 200k Euro
- Reduce warehousing to meet current requirements and reduce costs
The Benefits
Within just one month of our initial support, the following efficiency improvements and costs reductions were reported:
- % loss at the Deburr rework process reduced from 5% to 3% by reducing drum speed (less dust created) and eliminating ‘lost’ material – savings circa 130k Euro/year
- Warehousing Cost – exiting the contract saving 150k Euro/year
- Manufacturing Costs – temporarily decommissioning Line 3 (based on current sales volumes and capacity available on other lines) saving the additional 26% manufacturing cost associated with this process line