Situation
Our client was a company that is a major manufacturer of all types of Mine/Tunnel Ventilation Tubing/Ducting with customers worldwide. The company is a 100% Canadian owned and operated company with over 25 years of success serving the mining & tunneling industry.
Requirements
Schroeder & Schroeder was commissioned to determine the operations optimization potential by:
- Pinpointing opportunities for profitability improvement
- Offering an external opinion on the organization’s efficiency and agility
- Training entrepreneurs (i.e., owner and management team) on the Value Creation Index (VCI) and on the Lean process improvement concept of “value”
- Creating awareness of the importance of continuous improvement
Challenges
The three main challenges faced on this project included under costs, delivery and quality:
- Waste in different forms was contributing cost increase;
- Several inefficiencies contributed to long lead time; and
- High scrap of raw material
Actions
After analyzing the project requirements our consultants addressed the challenges presented and performed the following actions to deliver results to the client:
- Developed an Industry Profile – provided an overview of the industry, and its evolution over recent years to help identify the company’s current competitive position within the sector.
- Conducted a Business Practice Analysis – used Lean methods including Value Stream Mapping, Ishikawa and Pareto Diagrams, and 5S, to identify challenges. A key performance factor audit and waste analysis was conducted to identify opportunities for improvement. Observations were also made during facility visits and connected to Value Creation variables (sales, raw materials and labour).
- Identified Challenges and Priorities – identified key issues related to: costs, delay, and quality. Translated key issues into two fundamental priorities: essential optimization projects and custom optimization projects.
- Identified Potential Gains – conducted a sensitivity analysis to identify potential gains with, and without, growth
- Established a Comprehensive Action Plan – defined a project management approach and created multiple project plans with individual activities and duties, timelines and impacts.
Results
Through this approach, Schroeder & Schroeder developed a comprehensive operations optimization plan with multiple projects and goals for the company, including:
- Guidance for supervisors on how to empower their workforce toward operational excellence.
- Workplace organization (5S methodology) recommendations to improve daily organization.
- Performance dashboards, including select performance indicators and objectives, and the introduction of routine quality and performance meetings.
- Definition of custom optimization projects such as an inventory management system, and layout optimization, designed to improve customer satisfaction, profitability, and operational agility.
- Continuous improvement investment recommendation required in order for the organization to improve competitiveness.
- Sharing the finding on operational improvement should allow for a 10% increase in revenues using less resources (as % of revenues), which would imply potential gains of $132K approx., and a decrease in total costs from 79.1% to 77.5%
Upon conclusion of the project, all key success factors had been achieved, and the client was highly satisfied with both the project deliverables and the value added by Schroeder & Schroeder Inc.