Client saved $800,000 in 3 Days

Lean Advisors recently helped design and conduct a 3-day major Kaizen Event with one of our clients resulting in an $800,000.00 US improvement in their business!

This company was experiencing typical problems with long set-up times on their machines, late customer deliveries, bottlenecks in manufacturing, excessive overtime, and constant expediting on the shop floor.

Lean Advisors worked with the client to apply a customized Kaizen process at their site over a very intensive 3 days. The focus/goal was diverse and challenging – we wanted to resolve the set-up (SMED), the Layout, the 5S, a Preventative Maintenance Schedule (PM), some Visual Controls and last but not least a simple but effective Pull system.

Day 1

On the first day, we worked with management and the team to prepare the site and the participants for the transformation.

Finalized critical items

• Identified a Kaizen Event leader
• Selected a Kaizen Team
• Established a Team Charter
• Filled out a Target Matrix
• Trained the Team
• Documented Current Reality
• Identified the Wastes
• Developed Countermeasures

Day 2

• Setup times on 8 CNC machines were reduced from a range of 1.5 – 5.0 hours to a sustained average of 45 minutes. 50 to 80% improvement!
• Machines were physically relocated into a better process Flow
• Unnecessary items were removed via 5S Red Tagging
• Tooling was organized and displayed on foam cutout drawers at each machine
• A 4’ X 8’ Visual Schedule Board was designed, built, and installed
• Raw materials coming from another department were put on a Pull system
• Layout markings were put in as standard locations for all carts, supplies, tools, aisles, machines, etc…
• A PM schedule was established and visually displayed at each machine
• The department was trained on Kaizen, and on the changes being made

Day 3
Necessary measures were put in place to understand exactly the impact of the changes and what was achieved. We then added counter measures along with incorporating and documenting the changes into the new Standard Procedures to ensure sustainability and the ability to communicate to the entire staff the details and new procedures.

And last but not least, we celebrated the Accomplishments!

The financial results per year:

• $250,000    The bottleneck to sales was removed, realizing an increase of in annual profits.
• $245,000     Reduction in setup times reduced wasted time and added a much needed capacity.
• $100,000     Overtime in this department was eliminated.
• $5,000         Materials inventory was reduced.
• $200,000    Expediting was eliminated.

The Kaizen Event team….a small 8-person cross-functional group…performed to perfection!  They were the primary factor in achieving these results in such a short period of time.  “Couldn’t have done it without them” as they say.

So there you have it…..the $800,000.00 in just 3 days! Not bad for a less than $10,000 one time investment!