Problem statement
The Irish-based automotive manufacturing organisation, a subsidiary of a multinational, had downsized considerably following market challenges and migration of product lines to eastern Europe. The challenge facing the managing director and management team was to ensure plant survival in a highly competitive low-margin business.
Objective
To enable the plant to survive & thrive following a significant downturn in product demand. To return to profitability. To use the Lean approach to market/customer analysis, growing customer service and satisfaction, and streamlining plant operations.
Lean Ireland consulting/training work
The Lean Ireland consultant spent a number of days on-site each month over 18 months, working with the management team, operators, engineers and quality personnel. The lean programme was derived through several discussions and mutual agreement, involved
- Defining lean thinking and outlining its principal methodologies;
- Selecting key performance metrics and documenting performance levels for those metrics through the lean journey, with particular emphasis on supply chain metrics;
- Training staff in elementary lean approaches, such as product flow, quick changeover and waste elimination in all facets of planning and product manufacture, and
- A complete clear out of redundant equipment and lines, and rearrangement of remaining active product lines.
This was an intensive fight for survival by the management team, and the onsite staff carried out most of the transformation work. The Lean Ireland consultant was onsite advising and providing guidance on 3 to 5 days per month over an 18 month period.
Detailed results of the client work
Early measurable results from implementation of lean principles, with the promise of more to come, were a key confidence booster that assisted management in taking bold leaps in the marketplace. The lean groundwork enabled the company to take over a competitor’s business. Manufacturing volumes increased by 73%, manufacturing lead time fell from 13.5 days to 5.9 days, and plant inventory turns increased from 8 to 13 annually. In year 3, the company traded at a profit margin in the high teens, relative to their previous low single digit margin in year 1.
- Enabled the company to take over a competitor’s business;
- Manufacturing volumes increased by 73%;
- Manufacturing lead time fell from 13.5 days to 5.9 days;
- Plant inventory turns increased from 8 to 13 annually.
In year 3, the company traded at a profit margin in the high teens, relative to their previous low single digit margin in year 1.