3 Day Kaizen Event yields $800,000 in Savings
3-day Kaizen resulting in an $800k improvement! Problems included long setup times, late deliveries, bottlenecks, overtime, and expediting.
Objective
Lean Advisors Inc. (LEAD®) recently helped design and conduct a 3-day major Kaizen Event with one of our clients resulting in an $800,000.00 US improvement in their business!
This company was experiencing typical problems with long set-up times on their machines, late customer deliveries, bottlenecks in manufacturing, excessive overtime, and constant expediting on the shop floor.
Lean Advisors Inc. (LEAD®) worked with the client to apply a customized Kaizen process at their site over a very intensive 3 days. The focus/goal was diverse and challenging - we wanted to resolve the set-up (SMED), the Layout, the 5S, a Preventative Maintenance Schedule (PM), some Visual Controls and last but not least a simple but effective Pull system.
Preparation
Day 1
» Identified a Kaizen Event leader and selected a Kaizen Team
» Established a Team Charter
» Filled out a Target Matrix
» Trained the Team
» Documented Current Reality
» Identified the Wastes and Developed Countermeasures
Day 2 - Completed the following:
» CNC Setup times reduced from 1.5-5 hrs to ~ 45 mins.
» Machines were physically relocated into a better process Flow
» Unnecessary items were removed via 5S Red Tagging
» Tooling organized and displayed on drawers at each machine
» A 4'x8' Visual Schedule Board was installed
» Raw materials from another department put on a Pull system
» Layout markings were used for all carts, supplies, tools, aisles, machines, etc.
» A PM schedule was established and visually displayed at each machine
» Department trained on Kaizen
Results
Day 3
Necessary measures were put in place to understand the impact of the changes. Counter measures were the added along with incorporating and documenting the changes into the new Standard Procedures to ensure sustainability and the ability to communicate to the entire staff the details and new procedures. The financial results per year:
» $250,000 - Bottleneck to sales was removed
» $245,000 - Reduction in setup times on all machines
» $100,000 - Overtime in this department was eliminated (Per Year)
» $5,000 - Materials inventory was reduced
» $200,000 - Expediting was eliminated, On-time deliveries/Service improved
The Kaizen Event team, a small 8-person cross-functional group was the primary factor in achieving the results in such a short period of time. $800,000.00 in savings in just 3 days! Not bad for a less than $10,000 one time investment!