The Challenge
Our client has been providing superior geotextiles and geosynthetic solutions to engineering problems encountered in road construction, waste containment and erosion control for over 30 years. Determined to maintain the highest quality standards, the transfer of core product manufacturing off shore has been resisted.
By remaining Australia’s geosynthetic specialist with local production capabilities, reducing margins due to global price sensitivities became an increasing risk.
Challenges facing the business included:
- Aggressive pricing strategies across the market due to off shore manufacturing strategies;
- Increased customer expectation of shorter lead times due to local production; and
- Excessive volume production resulting in growing levels of finished goods negatively effecting cash flow.
Our Solution
Our first step was to conduct our LEAN Leadership Workshop and Waste Audit of the business to create an accurate assessment across the underlying issues throughout the business.
Issues identified included:
- Excessive production lead times and delays of approximately 73 days;
- The existing culture of volume production resulting in growing levels of finished goods – also accounted for over 63% of total lead time delays; and
- Long production set up practises ranging between 60–90mins was creating excessive idle time.
The results of the process mapping and interviews with key staff were used to develop a customised LEAN Program and implementation plan.
Recommendations included:
- Implementation of a Pull System utilising maximum and minimum levels for selected high volume products;
- Implementation of Single Minute Exchange of Die (SMED) to reduce set up times;
- Conduct Kaizen workshop with supervisors;
- A 5S Housekeeping improvement program to be activated throughout the business; and
- Conduct team workshops to train and implement thenew processes involving all relevant staff to establish culture of ‘Continuous Improvement’ to assist business take control of its operations.
REsults Delivered
After working closely with supervisors and production managers changes were systematically implemented resulting in significant reductions in waste. Production
changeover was immediately reduced following the Kaizen workshop conducted with supervisors.
Results delivered include:
- Finished goods inventory reduced by 52% to 21.7 days;
- Production change over time reduced by 50% to 30 - 40mins equating to savings of $280K p.a; and
- Full implementation of Pull System is forecast to save over $1million inventory.