Business Issue
Our client’s very low production volume failed to meet the needs of its customers to provide laser engraving on a variety of drink ware products. Production volume was running at 66,000 units per month against a target of 500,000 units per month. Other key metrics included the following:
- Drying time of the paint-like product exceeded the 2.5 hours promised but instead averaged 8 hours
- Quoted volume of the paint-like product was 0.6 grams per unit but instead was 2.2 grams per unit
- 43% re-spraying of all painted products
- 3.2% scrap
- $245,000 average monthly business loss
Approach Taken
Lean Techniques
Flow Consulting did an initial assessment of the facility, production capabilities and employee skills. Flow Consulting then provided a full-time consultant that applied Lean Manufacturing principles to support the following process improvements:
- Eliminated over-spray issues (re-spray reduction)
- Drying time reduced from 8 hours to 15 minutes using a drying tunnel
- Reduced airborne contamination to decrease defects using a filtration solution
- Implemented lean training for all factory processes
- Eliminated a pre-washer on each shift
- Improved order consolidation and packing processes to eliminate mixed orders, product damage and improper handling
- Defects reduced by identifying methods to “mistake proof” the final inspection process
- Implemented new factory layout to improve flow and increase velocity
- Developed a flexible workforce through cross training
Results
After 6 Months
- Cost per unit reduced from $14.07 to $4.11
- Increased capacity from 66,000 units per month to 493,714 units per month
- Reduced material cost per unit from $1.63 to $0.55 per unit
- Reduced labor costs from $8.17 per unit to $2.11 per unit
- Reduced scrap rate from 3.2% to 1.5%
- $2,592,000 material annual cost savings
- $23,000,000 total annual production savings
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