Client: A Major Consumer Goods Manufacturer, USA
The Summary
A successful and profitable major consumer goods manufacturer began to experience production declines in the wake of a major acquisition. HMC was selected to help them improve their manufacturing performance and to sustain the improvements. Through coaching and the use of HMC's Holistic Manufacturing™ approach, HMC was able to identify and implement various human systems changes that would both increase productivity and significantly reduce waste. As a result, output of the plant was increased by 15% and waste was reduced by almost 40%. As a direct outcome of these results, HMC received approval to pursue a more intensive effort in a small number of critical manufacturing lines. Improvements in these critical lines generated an increase in performance of 25-40% in just 3-4 months!
The Challenge
A major US consumer goods manufacturing company had experienced good results in their production process through the early 1990's. However, in the mid-90's they acquired another company and began to experience declining performance. This was due primarily to the absorption of additional products, additional staff, new technologies, and a myriad of new processes which added complexity to their manufacturing environment. Shortly after the market was severely impacted and they lost market share. They needed help to get back on track. After recognizing their need for improvement, they selected HMC to help them make sustainable manufacturing performance improvements.The Approach
When there is a merger or acquisition, manufacturers often experience difficulty in maintaining production efficiency. Many times the decision to acquire another business is for sales and marketing purposes, and the company assumes that the manufacturing processes are similar enough to not pose any serious problems in integration. However, the integration of two distinct manufacturing processes poses many difficulties, and it takes a great deal of effort and time to bring them together effectively.After reviewing the situation, HMC consultants knew immediately that they would need to build ownership in a new, integrated process in the production line. The first step was to study the manufacturing process as it existed by putting an initial "Line Under a Microscope" to analyze and track machine and operator performance. This incorporated the tracking of all downtime, operator interventions, maintenance, output, and waste for a test line for several weeks. The development of this kind of detailed information is essential in determining the specific causes of poor performance and inefficiency.
From this analysis we learned that most of the lost productivity came from human systems, and not technological ones. In other words, it was the lack of organizational structure, training, efficient scheduling, changeovers and adherence to documented procedures (or in some cases lack of documented procedures) that were at the heart of their problem. For example, we discovered that there was too much operator rotation, poor prioritization and a focus on too many things. This had the result of reducing their expertise and skill levels at operating the various machines. HMC also recognized the need for a more disciplined approach, with improved maintenance scheduling, regular cleaning, more training, and written procedures. We also encouraged the development of better communication through the implementation of communication boards, logbooks and control checks. Finally, we recommended strategies to build more effective teams for problem solving and communication.
HMC uses an Holistic Manufacturing™ approach in solving problems for its clients, which incorporates both the technological and human systems elements of the manufacturing process. In this particular case, it was the human systems that needed improvement since the client had good equipment, technologies and processes in place to produce their product effectively. But because of their acquisition of another company, their human systems had broken down and needed repair. Our approach ensures our clients that appropriate solutions will be developed that not only solve their production problems, but also that the improvements we help them make can be sustained.
The Results
Our Holistic Manufacturing™ approach and recommendations enabled this client to acquire the necessary expertise to operate the equipment efficiently and effectively. It also helped them to develop a team approach and build ownership in the manufacturing process. After training and coaching, the average line output increased about 15% over the course of a year. Waste was reduced almost 40%, representing a substantial savings. More intensive efforts on a small number of critical lines yielded further improvements of 25-40%!
Average Module Output
Waste Reduction
And while output was increased and waste was reduced, there were many other less tangible benefits that the client experienced. Some of the additional results are listed below:
Reduced performance variability within and between shifts (from 37% to 21% COV)
Through HMC's Holistic Manufacturing™ approach, this major consumer goods manufacturer not only achieved the results they desired, but they also received improvements in their manufacturing processes and human systems that will guarantee sustainability. As a result of this project, further work will be done in other Divisions and in other plants that will extend these results throughout the organization, making the client more competitive and profitable.
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