The Challenge:
One of the leading industrial supply companies in North America acquired several steel fabrication production facilities that enable them to provide comprehensive support to their customers. To improve Cost-To-Serve of one of the portfolio companies for the current operating year, rapid improvement was required at the flagship steel production facility to improve profitability and production capacity.
The Goal:
Reduce cost per ton between 20-30% within 90 – 120 days and within the budget.
Results:
Following a network value stream analysis our team lead a 2 day design session with the executives and managers involved in steel production. We defined the production goals and reverse engineered the target cost per ton of each of the contributing variables. Upon completing engineered time studies and measurements of the equipment and facility our team developed several design alternatives for layouts of the factory that would optimize throughput and reduce non-value added time and inventory.
Highlights this client achieved include:
- New simplified work cell concept capable of 50% increase in process capability – ability to meet peak demand spikes.
- Completed the design, engineering and construction of the new layout to transformation the facility in under 90 days.
- Managed the Request for Proposal (RFP) process with the mechanical and structural engineering firms and was able to drive down the cost of quoted construction by 50% through close coordination with client and innovating layout changes around the constraints then negotiating cost out with vendors.
- Reduced the footprint of the production area by 40% enabling the ability to “Mothball” unused area of the building.
- 40% increase in productivity (manhours per ton)
- 20-25% reduction in cost-per-ton.
- Created a “Pull system” for inventory management from vendors vs “Push” approach used previously to turn inventory faster and use less space.
- Through the process identified and addressed more than a dozen safety hazards.
- Cleaned and scrubbed the factory floor improving moral and customer tour readiness.
