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All Content © Copyright 2012, Manex Consulting
Introduction to Manex
All Content © Copyright 2012, Manex Consulting 2
The Corporation for Manufacturing Excellence (Manex)
• Since 1995, Manex has provided a broad array of proven solutions and resources exclusively to manufacturers, distributors, and their supply chains, enabling them to compete on a global scale
•Manex uses a holistic and proven approach, from strategy to implementation, to impact all facets of business performance
• Services areas include Strategy, People, Process and Performance•Results: growth, profitability, and competitive advantage
•Manex is one of 60 NIST/MEP Centers throughout the US. We are here to help manufacturers, distributors, and their supply chains grow profitably
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All Content © Copyright 2012, Manex Consulting
Manex (cont’d)• Focused on results and delivering Rapid ROI to position clients for
long-term success: Typical result is 6:1 ROI
• Affiliate of the National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) program. NIST MEP frequently cited as among the country’s most effective and successful public-private partnerships
• Booz Allen Hamilton cited NIST MEP as a significant factor in mastering innovation, showing NIST MEP program plays a key role in helping midsized companies improve their innovation processes
• Value Manex provides to clients is measured by NIST to ensure we meet and exceed clients’ business objectives
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All Content © Copyright 2012, Manex Consulting 44
Our Service Offerings
>>Strategy• Corporate Strategy and Business
Planning• Market Research and Development• Mergers & Acquisition Advisory and
Integration• Product Innovation• Customer Satisfaction, Loyalty and
Retention• Turnarounds and Workouts
>>People• Six Sigma Training• Organization and Operations
Design• Knowledge Management• Access to Federal and State
Workforce Grants• Nationally Recognized Lean
Certification Program
>>Process• Lean Manufacturing• Plant Layout and Expansion• Process Optimization• Supply Chain Management• Logistics and Distribution• Inventory Optimization
>>Performance• Benchmark Assessment• Management Dashboards and
Scorecards• Key Performance Indicators (KPIs)• Quality Management Systems• Six Sigma• ISO/AS Implementation and
Certification
All Content © Copyright 2012, Manex Consulting 55
Industry Focus & Expertise
• We cover a broad range of industries• Food and beverage• Consumer packaged goods• High technology• Medical devices• Aerospace• Commercial Printing
• Our sweet spot: Companies with revenues between $10MM and $200MM
• Our diverse team brings an average of 20 years of experience to deliver depth and breadth of industry and business know-how, from strategy through implementation, including former:• General Managers• Directors of Lean• Vice President of Sales• Directors of Logistics• Plant Managers• Fortune 50 Consultants
• Biotechnology• Pharmaceuticals• Precision manufacturing• Automotive• Rubber and Rubber Recycling• Construction
All Content © Copyright 2012, Manex Consulting 66
Rapid ROI Case Study
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Before After
Total Lead TimeTotal Processing Time
21 days6 days
15 days5 days
Sales Levels $24 million $29 million
Pre-tax Earnings 2.67% 5.51%
Valuation $10.9 million $16.75 million
• Becoming Lean reduced total effort, scrap, waste, conveyance/transportation, excess motion, energy/electricity and reduced time to ship finished goods• Results included increased product sales and prices, decreased cost of
manufacturing and defect rate• Improvements increased the value of the company by $6 million
All Content © Copyright 2012, Manex Consulting 777
Success Story – Biotech CompanyBiotech Company Saves $25 Million on Expansion
Client’s Business Needs• Medical device and software biotech needed to lower its cost structure to provide more features at the same price,
thereby providing more demand for its DNA sequencing products• Company sought to reallocate production and administrative resources into R&D, which would be the key enabler to
add features and functionality without adding to the price
Our Approach• Provided full-immersion Lean Training for entire team, starting with senior management• Value stream map (detailed view of all processes) and high-impact events to reduce non-value add activities• Workplace organization (process called 5S) of all workstations and production areas, to eliminate the biggest causes
of wasted time, motion and materials
The Results• 40% increase in productivity• Reduction of required floor space (“footprint”), eliminating need for a new building/facility• 100% increase in throughput in Surface Production• Reduced cycle time by 68%• Consolidated 2 manufacturing areas into a single area in less than 1 day• Reallocated 4 key personnel from production to R&D function
• Company announced IPO issuance in 2010!
All Content © Copyright 2012, Manex Consulting 888
Success Story – Defense ContractorThroughput Increased by 309%
Client’s Business Needs• Fortune 100 defense contractor and aerospace company received massive Department of Defense order• Company realized that they could grow their workforce to meet capacity, or improve operations and add
only a few new employees; they preferred the latter
Our Approach• Construction of current and future state Value stream map (detailed view of all processes) of their order-
through-delivery cycle• Identification of gaps and non-value added activities (between current and future state) and implementing
lean improvements to eliminate the gap and the non-value added activities• Highly engaged training for all division staff on lean, quality systems and workplace organization
The Results• 72% reduction, on average, of actual processing and assembly time• 95% reduction in defects and rework for finished components• 77% reduction in lead time (which increased productivity and sales opportunities)• $13.4 million lower labor costs• Carryover of concepts and improvements into Design/Engineering function and Stores Depot • Ability to propose contracts on a more profitable, “fixed price contract” model
All Content © Copyright 2012, Manex Consulting 99
Success Story – Coating & Sealant Co.Holistic Approach Drives 45% Reduction in Material Costs and 24% Growth in Sales
Client’s Business Needs• The management team engaged Manex to assess the current manufacturing operations and identify
opportunities for improvement from order entry through shipping. • Quality improvements and reduction in lead time led to an immediate increase in sales and demand.• With a sharp increase in sales, company’s capabilities were stretched to meet this increasing demand.
Company was now looking for a way to concentrate on operational excellence to help grow the business and increase revenue even more.
Our Approach• Conducted a detailed assessment consisting of 12 key business metrics benchmarked against leading
companies in the coating industry.• Developed a roadmap to help prioritize activities to support and achieve their short and long term
business objectives.• Lean methodologies were used as the foundation for continuous improvement. Manex trained the
workforce in 5S and the team implemented key process improvement activities (identified by Manex) and eliminated bottlenecks throughout their operations.
The Results• 24% growth in sales (year over year) • 45% reduction in core materials costs • 11% improvement in on-time shipments• 2 day shorter lead times in remakes
All Content © Copyright 2012, Manex Consulting
Why Implement Lean?
4 key points:
•Lean is simple
•Lean is common sense
•Lean can be used in any organization and in any area of the organization
•Lean improvements will drop to the bottom line
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All Content © Copyright 2012, Manex Consulting
What is a Lean Manufacturing System?
•Systematic approach
•Eliminates waste
•Continuous improvement
•Pull of the customer
•Pursuit of perfection
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All Content © Copyright 2012, Manex Consulting
Phase 1 – Typical Current State VSM
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All Content © Copyright 2012, Manex Consulting
Phase 1 – Typical Future State VSM
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All Content © Copyright 2012, Manex Consulting
Impact / Effort Chart Prioritize Opportunities
Effort
Imp
act
12
3
4
5
6
7
8
9
1. Need Usable and Timely Metrics
2. Logistics Costs / Inaccuracy
3. Production Scheduling and Capacity
4. Warehouse Layout
5. Warehouse Processes
6. Yield Issue
7. Raw Material Availability
8. Weigh up Process
9. Product Hold for Test
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All Content © Copyright 2012, Manex Consulting
Reduce or Eliminate Non-Value Added Activities to Improve Efficiency and Sustain Growth
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Source: Manex Consulting
All Content © Copyright 2012, Manex Consulting
WASTE
Value Added vs. Non-Value Added•Value added is something the customer is willing to pay for. Value Added is anything that changes:• Form• Fit• Function
• Non-Value Added is:• Everything else
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NVA increases costsmaking us less competitive
All Content © Copyright 2012, Manex Consulting 17
Value Added vs. Non-Value Added
Examples:• Reach for the drill • Pull down wrench• Unclamp and clamp
Examples:• Drilling a hole• Installing a flange• Driving a screw
Example:• Walking to get parts• Waiting time • Part storage• Transport
All Content © Copyright 2012, Manex Consulting
Eliminating NVA (Waste) - DOWNTIME
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DEFECTS OVER PRODUCTION WAITING
TRANSPORTATION INVENTORY MOTION EMPLOYEE
NVA PROCESSING
All Content © Copyright 2012, Manex Consulting
Focus on Total Costs and Not Just Labor
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Source: Manex Consulting
All Content © Copyright 2012, Manex Consulting
Importance of good quality
TypeAt 6σ (99.73%) At 4σ (95.46%)
2020
What is Your Quality Level?
Postal delivery in US
Surgical operations in US
Flight landings in US
Drug prescriptions in US
7 lost mails per hour 20,000 lost mails per hour
1.7 incorrect surgical operations per week
5,000 incorrect surgical operations per week
One short or long landing at major airports each year
Two short or long landings at most major airports daily
68 incorrect drug prescriptions each year
200,000 incorrect drug prescriptions each year
All Content © Copyright 2012, Manex Consulting
A Great Layout Reduces Costs
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• An effective layout reduces your costs, improves your quality and keeps your team working on what they do best, build and assemble wall curtains.
• Real life Ex: Aerospace client. Total Travel Distance for all components including Sub Assembly, Final Assembly in a 5000 sq/ft facility. Each assembly is $1.5MM!
• 122,610 inches• 10,217.5 feet• 1.9 miles for each major assembly
All Content © Copyright 2012, Manex Consulting
Typical Spaghetti Diagram of work flow for one part
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BSSE
3ph, 208V, 20A20 sq. ft.
11
Quad
14 sq. ft.
belt oven and small oven
114 sq. ft.
Thermotron
SCREENS
23 sq. ft.VISD
VMULT
VBIM“Depot 5”
VP
EM
VB
IM“D
epo
t 3”
VWPF“Depot 8”
VM
UL
T T
ES
T“D
epo
t 1
0”
VIFD2 Test“Depot 12”
VIF
D2
Tes
t“D
epo
t 1
1”
VMULT TEST“Depot 9”
Binford3ph, 208V, 20A
20 sq. ft.
Cabinet
6 sq. ft.
3ph, 400Hz, 120V, 20A outlet
3ph,60Hz 208V, 30Aoutlet
3ph, 400Hz, 120V, 20A outlet
3ph,60Hz 208V, 30Aoutlet
3ph, 400Hz, 120V, 20A outlet
Assy workbench 25
Test workbench 30
Inspection Station 4
At all work benches: 1 ethernet drop 1 120 circuit
Julie
Pat
OVEN
Stamping / Part Marking4 desks
3 racks1 cart
3 Workstations to accommodate Humi touch up
Min. Req.: ethernet drop, standard 120
power, compressed air, and one needs a hood connectionWIP
182 sq. ft.
Vapor Degreaser 230 V 3KW
Vapor Bath Tank115 V 1.5KW
2 Workstations to accommodate
WIP Need ethernet drop and each bench needs
power
Office
10 sq. ft.
Phase 2 expansion
Occupancy – 6 max, 2 typical.
10 foot ceiling
Cable work Cell
Spray cool assembly7' between rows
CCA MODULE TEST7 ‘ between stations
Cabinet
9 sq. ft.
1 square = 2.5' in 33% view
12
9
VS
DL
2
75
8
16
173
13
1514
1011
13VMPE
MRB
9
CCA MODULE TEST8 ‘ between stations
Eye wash
EMIL
DANEL
JIM
JAD
OPEN OPEN
DON
Open
OPEN OPEN
SuperCart
CART
CA
RT
CARTCART
CA
RT
CA
RT
CART
CA
RT
Cabinet
Card Mechanical Assembly
OPEN
MICHAEL
ANNE
OPEN
OPEN
ERIC
SIMON
ROMEO
11
ROBERT
RUTH TAM
OPEN
12
TO SHIPPING
Ca
binets
Ca
binets
Dry Erase Board
SuperCart
4
Tools
Wire Rack
CART
Cabinet
9 sq. ft.
Cabinet
9 sq. ft.
Cabinet
9 sq. ft.
Cabinet
9 sq. ft.
Dry Erase
Board
Rack
Rack
Rack
Rack
Rack
Rack
Rack
Rack
Rack
18
SANG
RIC
K
FRED
OP
EN
BO
BB
I
RICK
Binford3ph, 208V, 20A
17 sq. ft.
RA
MIL
Rack
OPEN OPEN OPEN
OPENOPEN
OPENPat Warren
VSYNTH“Depot 4”
VSDL
6"
Fridge
Hot Air Reflow Machine
“Depot 1”
VMULT“Depot
6”
Dry Erase Board
FreqAATS Testing
Cabinet Recycle &Shred BinCabinet
SCC Bench
SCC Bench
QA Out
QA In
CARTCARTCART
CART CART CART CART CART CART
CART CART
QAHold
ShredBin
CA
RT
Cabinet
4'-4 3/16"
CabinetCabinet
10MHz
Wire Rack
Wire RackCabinet
1'-4
"
Rack CART CART
CART CART
CART
CART
CART
Binford3ph, 208V, 20A
17 sq. ft.
Cabinet
CA
RT
CARTFlammabl
e CA
RT
Ste
p
Lad
der
8'-0
"
10'-1
0 5/
8"
HAI - Current State Layout
Travel Distance:9,684 inches807 feet.15 miles
Why a goodlayout is important
All Content © Copyright 2012, Manex Consulting
Improved flow reduces waste and costs!
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BSSE
3ph, 208V, 20A20 sq. ft.
Thermotron
VM
ULT
VBIM“Depot 5”
VP
EM
VB
IM“D
epot 3”
VWPF“Depot 8”
VMULT TEST“Depot 10”
VIFD2 Test“Depot 12”
VIF
D2
Tes
t“D
epot
11”
VM
ULT
TE
ST
“Dep
ot 9
”
Cabinet
6 sq. ft.
3ph, 400Hz, 120V, 20A outlet
3ph,60Hz 208V, 30Aoutlet
3ph, 400Hz, 120V, 20A outlet
3ph,60Hz 208V, 30Aoutlet
3ph, 400Hz, 120V, 20A outlet
Assy workbench 25
Test workbench 30
Inspection Station 4
At all work benches: 1 ethernet drop 1 120 circuit
OVEN
3 Workstations to
accommodate
Humi touch up
Min. Req.:
ethernet drop,
standard 120
power,
compressed air,
and one needs a
hood connection
Vapor Degreaser 230 V 3KW
Vapor Bath Tank115 V 1.5KW
Office
10 sq. ft.
Phase 2 expansion
Occupancy – 6 max, 2 typical.
10 foot ceiling
SCC BENCH
SCC BENCH
1 square = 2.5' in 33% view
VSDL
MRBSuperCart
CA
RT
CART
CA
RT
CART
CART
CART
CA
RT
CA
RT
Cabinet
Card Mechanical Assembly
PC
C
abin
ets
PC
C
abin
ets
Dry Erase Board
SuperCart
Wire Rack
CART
Cabinet
9 sq. ft.
Cabinet
9 sq. ft.
Dry Erase Board
Rack
Rack
Rack
Rack
Rack
Rack
Rack
Rack
VS
YN
TH
“Dep
ot 4
”
“Depot 1”
VMULT“Depot
6”
Dry Erase Board
FreqAATS Testing
Cabinet
Recycle &Shred BinCabinet
QA Out
QA In
CARTCART CART
CARTCARTCART CARTCARTCART
CARTCART
QAHold
ShredBin
CART
CabinetCabinetCabinet
Wire Rack
Wire RackCabinet
CART
CART
CART
CART
CART
CART
CART
Cab
inet
CART
CART
Flammabl
e
Ste
p La
dder
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
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Rack
Binford3ph, 208V, 20A
17 sq. ft.
Binford3ph, 208V, 20A
20 sq. ft.
Rack
11
18
Binford3ph, 208V, 20A
17 sq. ft.
Rack
11
CCA MODULE TEST11 ‘ between stations
Cabinet
9 sq. ft.
12
9
2
75
8
16
1
3
1514
1011
13VMPE
9
CCA MODULE TEST10 ‘ between stations
4
Tools
Cabinet
9 sq. ft.
Cabinet
9 sq. ft.
10MHz
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
11
'-3 1
/4"
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
1'-0
"
DONOT
BLOCK
ASSYSTAGING
WIP
72 sq. ft.
New Assembly Bench
New QA/QC Bench
ST
AM
P /
PA
RT
MA
RK
New Test Bench
New Rack
CA
RTSTAMP /
PART MARK
CA
RT
KIT
CA
RT
KIT
CART KIT
CART KIT
CART KIT
CA
RT
KIT
CA
RT
KIT
Cable work Cell or Mechanical Assy
Cable work Cell or Mechanical Assy
NE
W
Rack
Rack
Rack Rack Rack
NEW
DONOT
BLOCK
14'-1 1/2"
6'-2
3/1
6"FLOOR STOCK
WIP
Test Rework
Tes
t R
ewor
k
12
NEW
DESK DESK
DE
SK
DE
SK
OVERFLOWSTAGING
&CART
KITTINGWIP
GOWNINGAREA
TEST STAGINGWIP
NE
W
FLOOR STOCKWIP
DONOT
BLOCK
DONOT
BLOCK
DONOT
BLOCK
ELECTRICALAREA
LOCKERS
LOC
KE
RS
SOILEDBIN
CABINETCABINETHANGERS
HA
NG
ER
S
BENCH
HAI – “CCAT” Layout
Travel Distance:5,414 inches451 feet.09 miles
All Content © Copyright 2012, Manex Consulting
Real Life Cost Reductions
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Original Jan 2010 Jan 2011
Touch Time (VA)
4221 hrs 2448 hrs 1737 hrs
Burden Rate $67 $67 $67
Cost / Chassis
$282,807 $164,016 $116,379
Savings / Chassis
- $118,791 $166,428
Savings / Year(50 chassis)
- $5,939,550 $8,321,400
All Content © Copyright 2012, Manex Consulting
Sample Project Results: Annual savings from plant consolidations for a real Manex Client
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.
….and a further $3,390,000 is the next five years!
All Content © Copyright 2012, Manex Consulting
Proof That “Lean Systems” Work
It does not matter what business you are in, going Lean will drive up the bottom line
1.Medical device manufacturer is growing sales 80% over 2008
2.Accessories manufacturer increased net income more than 20%
3.Contract manufacturer doubled their market share and increased prices by 8%
4.Food company achieves over $400k in sales per employee, best in class
5.Division of aerospace company increased sales by 700% over past 24 months
6.Automotive supplier achieves 38% EBITDA
7.OEM supplier awarded a $7MM contract due to Lean implementation
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All Content © Copyright 2012, Manex Consulting
Typical Operations Accomplishments
• Improved utilization of personnel by 20%• Improved machine utilization by 40%•Reduced Non Value added operations by 40%•Provided the training for an informed and empowered work force for Continuous Improvement Programs•Typical ROIs on Kaizen events and training is 6:1•“Train the Trainer” format utilized for optimal knowledge transfer
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All Content © Copyright 2012, Manex Consulting
Contact Information
Bill Browne
Director of Client Services
925.807.5103
925.997.0004
Greg Cho
Senior Consultant
415-601-8225
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