Lead time and cost reduction


Operational excellence

Challenge

We were contacted by a Swedish manufacturing company, a leading player on the European market for construction components, that have had issues in getting the most out of their production. Their initial list of problems included unreasonably high costs for both overhead and manufacturing while having both unreliable delivery lead times and low service of stocked items.

 

Solution

To get to grips with the comprehensive challenge that was facing our client we launched a multi-pronged attack on the inefficiencies in their manufacturing process. The main points of our turn-around strategy are listed below.

  • Differentiated supply policy; complexity and volume
  • Forecast process as drumstick for the capacity planning
  • Central validation of the forecast
  • TAKT flow assembly with a product oriented workshop, used for the most complex variants
  • Product families were grouped into four different TAKT flows

Impact

After implementing our redesign the client managed to achieve increased efficiencies within several domains, most notably working capital, cost reduction and process stabilisation. A selection of the results that we enabled are listed below

  • An annual saving of 30 MSEK
  • A stable lead time of 2 weeks, instead of 2 – 15 weeks
  • Reduced inventory levels in the sales organisation