Interim Plant Manager Uses Lean Manufacturing Principles to Transform Business

The Situation

IXPA was asked to help turn around a drinkware manufacturer’s very low production volume of laser-engraved items, which was resulting in an average monthly business loss of $245,000. With a target of 500,000 units per month, the actual production of just 66,000 units per month was having a major impact on its ability to meet customer demand. The company was having to re-spray 43% of all its painted products, and had a scrap rate of 3.2%. Drying time of the paint-like product averaged 8 hours instead of the promised 2.5, while the volume of the paint-like product was 2.2 grams per unit instead of the quoted 0.6 grams.

The Solution

IXPA’s partner in the USA appointed an interim plant manager to carry out an initial assessment of the production facility, its capabilities, and the skills of its employees. A range of process improvement targets were then defined, which included:

• Reducing re-spray rates by eliminating over-spray issues
• Reducing drying time from 8 hours to 15 minutes by using a drying tunnel
• Decreasing defects by employing a filtration solution to reduce airborne contamination
• Implementing lean training for all factory processes
• Removing a pre-washer on each shift
• Eliminating mixed orders, product damage and improper handling by making improvements to order consolidation and packing processes
• Reducing defects by identifying methods to ‘mistake proof’ the final inspection process
• Improving flow and increasing velocity through the implementation of a new factory layout
• Using cross training to develop a flexible workforce

A skilled and experienced interim plant manager was sourced and appointed to apply lean manufacturing principles to support these improvements.

The Outcome

Just 6 months after implementing the improvements, the involvement of an interim plant manager meant the turnaround in volume production was so significant that the total annual production savings were $23m, with material annual cost savings of $2.59m. The company had increased capacity from 66,000 units per month to 493,714 units, reducing the cost per unit from $14.07 to $4.11. Material cost per unit had fallen from $1.63 to $0.55, and labor costs had plummeted from $8.17 per unit to $2.11. Moreover, the previous scrap rate of 3.2% had been more than halved to 1.5%.