Summary
This client had experienced strong growth over the past twelve months, but was unable to meet demand, resulting in poor delivery performance.  Poor delivery combined with strong price pressures forced the manufacturer to begin a transformation to lean manufacturing.  The goals of this project were to drastically reduce manufacturing leadtime and backlog for the Collars product family.

Company Background
The client is a manufacturer of specialty fasteners for the aerospace industry.  The company has grown significantly over the past five years through acquisition and has four manufacturing facilities in Europe and three in the United States.

Project Overview
As an integral part of an overall transformation strategy to lean manufacturing, the management team identified the Collars product line as the Model Line. The Collars product family generates ~ $30M in sales per year and employs 120 associates.

The model line team was chartered to:

• Reduce leadtime by 55%
• Address not only the production issues, but also the systemic problems
• Stress the production system to identify weaknesses
• Develop and implement a new system - acting as a learning laboratory
• Capture lessons learned to prepare for replication across all product lines.
• Implement as many lean principles as possible.

Project Team(s):
Two teams were established to implement this project:
 

Steering Team Chief Operations Officer VP Business Development Site General Manager Site Quality Manager Site Engineering Manager

Project Team Product (Collars) Manager Manufacturing Engineer Quality Engineer Production Planner/Buyer (2) Inspector Production Associates (5) Supervisors (2)

Steering Team Roles Establish objectives and boundaries Provide resources  Provide guidance and support Remove barriers

Project Team Roles Design and implement changes Stress the system, be aggressive Operate the system in the new environment

The Methodology

To begin the project, a four-day management training session was conducted.  This training was designed to give all the site managers a basic understanding of the lean principles and the potential impact to the model line.  Following the training session was a visioning exercise to define the current state and desired “end state” of the model line.  From this gap analysis, a methodology was used to identify the constraints and therefore the breakthrough objectives for reaching the end state. The project team then developed a detailed project plan to achieve the breakthrough objectives.  Once the project plan was reviewed and “chartered” by the steering committee, a formal communication plan was rolled out across the entire site.  Rapid Improvement Workshops were used as a methodology to implement changes.

Key elements of the project plan were:
 

• Roll out plan to entire organization • Co-locate team members • Align organizational structure • Develop Project management system • Design compensation system • Align performance reviews with new behavior  • Employee integration system • Implement standard work

• Autonomous maintenance • Design and create cells • Implement Pull • Cross training • IT system changes • Deploy quality tools • Machine capability studies/DOE's • Link supplier with Kanban

Implementation

The Collars product line consisted of four smaller product lines, differentiated by material type.  The overall approach was to convert one material type at a time, thus reducing the risk and increasing the speed of change.  Lessons learned from one material type were incorporated into the other lines.  The processes that were shared with other parts of the facility (heat treat, cad plate, anodize) were the most difficult to address.   These areas needed to work with two systems concurrently, the new lean system and the old traditional system.  Given this difficulty, these areas were integrated at the end of the project.

Results
 

Measure

1 yr. Improvement (%)

Quality

51

Shipments ($/wk)

82

Productivity ($/day/person)

69

On-Time Delivery

123

Lead-Time

65

Inventory Turns

33

Gross Margin

116

The (1-yr) return on investment was 1256% with a 29-day payback period.

Lessons Learned

Site management leadership is critical.  There is enormous resistance to the new system and a tendency to “go back”.  The supporting systems (maintenance, purchasing, tooling, etc.) will be stressed during the transformation.  There is a real need for quick response in these systems in order to implement changes quickly.  These should be addressed at the planning stage.  Use of the workshops is an effective method to implement change.  There are significant changes to the organizational roles and responsibilities and these also need to be addressed during the planning stage.  The steering committee needs to be very effective at leading change, constantly setting the example of the new behavior.

Client Coments

• "they provided knowledge in a non-text book fashion that was easy to understand and implement".... Vice President - New Business Development
• "they showed us how good it could be".... COO US operations
• "they consultant was very informative, motivational and was the best I've witnessed here...the team performed extraordinarily because of this atmosphere...many people are excited for change!"....workshop participant

Rowney Consulting 10910 S. Bremer Road Canby, OR 97013-6705 Phone: 503-266-5492 Fax: 503-266-3610 Cell: 503-989-1897 Email: mike@rowneyconsulting.com