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CASE STUDY - JOB SHOP MANUFACTURER

SYNOPSIS

COMPANY Manufacturer of Aircraft Seats and Interiors
Sales $48 Million
SITUATION

Sales had increased by 33% while profits dropped to below break even. The plant manager wanted to correct his inventory problem-one turn per year-while increasing profits.

   Pre-Project  Post-Project
 Employees  1,400 | 60hrs Weekly  700 | 45hrs Weekly
 Inventories  $34.5 Million  $14.0 Million
 On-Time Delivery  9.0%  94.0%
 Quality Cost  $2.0 Million Per Year  $60,000 Per Year
 Profit & Loss  $2.5 Million Loss  $12 Million Profit
 Production Units  1,400 Per Month  1,400 Per Month

RESULT
  • Reduction of Inventories by $23.5 million
  • 1000% Improvement in On-Time Delivery
  • $14.5 Million Profit Increase
  • $1.94 Million Reduction in Quality Costs
  • 700 Less FTE's Working No Overtime
PROGRAM  
ASSESSMENT

2-week review of operations showed lack of communication at all levels. Coordination of production, marketing and materials management was difficult, with deliveries and quality declines resulting.

PLANNIING

Plant manager, materials manager and consultant decided to re-engineer the delivery system in the plant. Work teams, inventory contril imporovements, quality focus and shop floor control were the likely areas of change. The computer system was not being used as intended; thus, training and programming changes were included in the project. 

EXECUTION

Senior supervisors and managers were included in the design effort of all system changes through planning meetings and work team involvement. Goals were set, objectives and milestones were determined. Teams were set in all areas to improve communication and execution of tasks.

Although the organization was flattened and some jobs were eliminated, wherever possible displaced employeees were offered positions withing other parts of the company. Shop floor control and data integrity was emphasized along with operating procedures designed to maximize the current computer system.

Production control was reshaped to focus on planning rather than reacting to problems. Expefiters were eliminated and the system was utilized for all transactions concerning shop floor control and material issues. Cost control;s were implemented through the use of budgets and cost reports on all jobs. 

 

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