Combine Four Locations Into One
35+ percent reduction in direct labor costs.
Case Studies
Business Issue
A global supplier of industrial vehicles and portable electric power units recognized the need to combine four manufacturing locations — all operating well below capacity — into one manufacturing location in order to maximize their return on capital and minimize production impact caused by large demand fluctuations within each location. Total revenue being generated by all three locations was slightly above $200 million.
Approach Used
A team of Flow Consulting consultants worked with the client to:
Develop a vision of what the new combined site would be based on maximizing flow and implementing flexible lean manufacturing concepts.
Sell the implementation plan to the Board of Directors.
Perform a detailed analysis of all product lines to determine optimum operating– and floor–space loading. Created a “dynamic loading” analysis to allow us to model changes to the site as the volumes change every year.
Develop the overall project plan (1800-step Gantt chart in Microsoft Project) and train a project team in the tools to ensure a successful move.
Run a series of three day kaizen sessions linked to key project milestones, utilizing cross functional teams of hourly personnel, engineers, purchasing agents, and supervisors to lay out the new production areas with lean manufacturing frameworks.
Project-manage every step of the Gantt chart with real–time reactions and corrections as needed.
Provide quarterly updates to the firm’s board of directors.
Results
Each product line that moved experienced:
A 35+ percent reduction in direct labor costs.
A 50+ percent reduction in cycle time.
A 65 percent reduction in required floor space.
All four businesses are now operating as one entity at one location with shared resources and movement of hourly personnel as needed to support business fluctuations. The business has achieved more than $10 million reduction in fixed costs and sold the two closed locations for $5 million.