Global heavy industry equipment manufacturer

Background:

The device manufacturer with a long tradition suffers from weak delivery reliability from suppliers and uncertainty caused by diversified demand. 

Problem:

Parts do not match on the planned start date of assembly. In addition, a large variation in assembly times disrupts the flow of the process.

Late fees for the customer, reputational damage, inefficient flow and resource utilization, large committed capital in the production space and unfinished production.

Objective:

To clarify the flow of assembly to make it predictable. This way, more accurate forecasts can be given for earlier stages of production, and production can flow better with demand-driven control (“JIT”, Just-in-time).

Implementation:

The project was implemented in several phases over approximately two years. The project included, among other things, the following components:

• Layout change for assembly

• Production 5S project

• Combining two assembly units

• Establishing a preparation cell in the warehouse

• Bringing transparency (visual control)

• Implementing daily management

Result: 

Over the course of the project, the flow of the process gradually improved significantly. Employee satisfaction turned positive about 6 months after the start of the project despite initial resistance. Daily management was perceived as meaningful, and predictability improved as a common understanding increased. 

Quality defects decreased significantly, delivery reliability rose to the target level, production floor space was freed up, and WIP (work in progress) decreased. Thanks to changes in the layout and process of assembly, the lead time of assembly and its variation decreased significantly. The estimated total benefit annually is around 2 million euros.