Improving Manufacturing Knowledge Work Processes with Lean Non-technology Improvement

Case Studies Automotive & Transportation
Tier 1 Tire Manufacturing Business Process Redesign
Top 3 U.S. Global Tire Manufacturer Enterprise Operations

Case Study: Improving Manufacturing Knowledge Work Processes with Lean Non-technology Improvement

Situation:
Lean OEM Tire Manufacturing in the Automobile Industry

New, cost cutting competitors were overtaking the low-price end of the tire market. In the high end, effective marketing operations and strong brands kept these new entrants at bay. Even so, high-end customers pushed for lower pricing. Margins were so thin that a one percent cost reduction could deliver a competitive gain in market share. Corporate execs wanted to increase productivity by an aggressive 10 percent without capital investment.

Operations executives were frustrated. They maintained numerous, internal, lean consulting teams at every plant. They believed they had exhausted every opportunity to increase employee productivity on the plant floor. But they had not assessed knowledge worker productivity.

Project Sponsor:

SVP Technology, Manufacturing & Procurement

Non-technology, self-funding operational
improvement implementation:

– No new technology
– End-to-end manufacturing process
– 6-month implementation

Client Description, Project Scope, Objectives

Executives embraced lean management methods. However, they had never applied these across the enterprise to attempt end-to-end, continuous process improvement. The Lab’s non-technology improvement templates and lean methodology showed that this could be accomplished within weeks, with granular detail.

A Top 3 global tire manufacturer, the company operates plants around the world. Management launched The Lab’s implementation effort in its most efficient U.S. facility, staffed by over 1,500 employees.

Improvements were implemented throughout the plant. However, the most valuable opportunity was to standardize knowledge work operations as rigorously as the “shop floor.” Lean process improvement for production scheduling and maintenance alone made it possible to increase productivity by 10 percent.

A 5-week, Phase I analysis of plant-wide operations pinpointed hundreds of non-technology process improvement opportunities. It delivered a self-funding, guaranteed, 6-month work plan for Phase II implementation.

Project Objectives:

– Increased production
– Waste reduction
– Lean process improvement

Project Scope:

– Material handling
– Production
– Maintenance
– Scheduling

Lean Automotive Part Supplier Improvement Implementation Examples

The Lab implemented over 350 non-technology, lean process improvement opportunities. Examples:

Reduced Down Time — Equipment operators submitted thousands of inconsistently defined, root causes of down time. The Lab implemented a process of standardization: simplified menus of root causes and centrally-managed down time. Productivity metrics tracked root cause reduction efforts, achieving a 30 percent drop in two months.

Slashed Schedule Overrides — Engineers developed meticulous schedules. But plant foremen could override them, creating over 2,000 daily modifications. The Lab implemented a standardized “knowledge work factory” for scheduling. Its performance was linked to end-to-end productivity metrics for the tire plant, delivering an 8 percent capacity gain.

Improved Inventory Handling — Cost cutting compromised the plant’s “first in, first out” raw materials inventory policy. Low-wage, subcontract materials handlers piled new materials in front of old. Storage space was used inefficiently. The Lab implemented a visual lean process improvement effort—no reading required. Stock outs and spoilage were reduced by 90 percent.

Implementation Results:

  • Throughput 25%
  • Annual savings $11M
  • Non-operating time 30%
  • Material waste/recycle 20%
  • Break even point 6 mos.
  • ROI (12 month) 8x