An automotive & industrial components manufacturer experienced deteriorating performance and increased costs. During a 2-week assessment, Carpedia helped identify themes that were contributing factors.
The following opportunities were identified:
- A lack of a consistent decision-making process to determine make-to-stock and make-to-order SKU designations for the automotive and industrial markets
- The manufacturing operation did not use strategic batch size configurations to cover the cost of production
- No minimum order requirements existed to support the economics of manufacturing, nor did they exist to help employees effectively manage customers
- Raw material purchasing strategy that did not align with the financial objectives of the business
- Little capability for variance identification / continuous improvement
- A complacent culture
Carpedia engaged with the organization for 6 months to assist with developing a run strategy complete with policies, guidelines, and targets.
The run strategy’s impact decreased the number of setups, created economic run & order quantities, and provided visibility into ideal inventory levels.
Improvements were also made to drive proactive supervisor behavior by decreasing response time to identified variances using schedule controls and visual tools. A time-bound schedule freeze process was implemented to improve schedule attainment while simultaneously supporting on-time performance. This drove throughput improvements, increases in productivity, reduction in downtime, and increased asset utilization.
The process also supported the purchasing team through establishing rule-based decision-making and measured performance that was connected to the company’s financial goals. These rules created ownership to their actions while reinforcing the impacts of their individual purchasing decisions.
The Results
Upgrades to the management systems, leadership behaviors, and overall processes led to an organization that was more equipped to deal with variances as they presented themselves. The leaders became a more effective and operationally functioning team, which created an environment of predictable performance and continuous measurable improvement.
Results included:
- 2.2:1 ROI
- 92% increase in schedule attainment
- 32% decrease in the number of setups
- 22% decrease in raw material inventory dollars
- 17% increase in productivity
