Lead time and cost reduction

Challenge

A leading Swedish manufacturing company on the European market for construction components 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

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

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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

Impact

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

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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