The client faced challenges such as extended lead times, heightened complexity, and excess inventory due to market changes. Our intervention not only delivered measurable financial and operational improvements but also helped change the mindset of people on the shop floor.
Story
The client makes a wide range of customized low & medium voltage cables. Market changes and extreme volatility in metal prices led to increased competition and customer demands, new requirements for increased customization, leading to longer lead times, increased complexity and excess inventory.
The 6-week Phase 1 analysis used VSM and data analysis to model new flows and scenarios using pull techniques, kanban and supermarket systems. Training and shop floor assessments were used to identify quick wins on the shop floor and get buy-in from the workforce. Five workstreams were successfully implemented: 1. Quick wins; 2. lean practices; 3. pull-based supply chain; 4. customer service optimization; 5. quick changeovers.
Lead times were reduced by >47% in 6 months using pull techniques which had a significant impact on inventory, volumes and customer satisfaction
Conclusion
The following results were achieved:
- Reduced lead times > 60% in nine months (>47% six months)
- Increased OTIF (OTD) from < 80% to > 90%
- Reduced changeover times by 40%
- Reduced WIP inventory by over 40%
- Increased EBIT by $2.8M more than doubling profit.
Lead-time reduction had a significant impact on inventory, including obsolete stock, volumes and customer satisfaction.