The company was building Sanding Machines and had 2 factories. In one factory the final assembly and most of the precision machining parts were produced.
In the second factory mainly sheet metal work and welding of machine components including the machine frame, housing, electrical cabinets, doors and exhaust.
Both factories worked in batches (lots) and the usual lot size was between 10 and 20. The company did manufacture 4 different machine types and for each type 3 different versions.
Based on changes in the market demand not all machine types were requested in the lot sizes and components which were not used were stored until a customer order was placed.
The lead time for a lot was in average about 6 weeks for the components. This influenced the utilization of the machines and here especially the bending machines which were the bottle neck. That the bottle neck was in most cases the 2nd or 3rd process step other processes were continuously waiting for needed components.
PROJECT PLANNING and EXECUTION
By analyzing the process flow and process times it was decided to recalculate the minimum stock level of all components in relation to customer orders.
As a result the lot sizes for major parts were in reduced in steps, reducing the lot size each time by 50%.
Lead time and WIP reduction
ERP, Value Stream Mapping, Communication
Lead time reduction by 90% (from 6 weeks to 3 days)