Background

The client is a designer, manufacturer, and integrator a very high-technology military product. The company lacked the capacity to meet its customers’ demands, resulting in extreme customer dissatisfaction that had progressed to threats of drastic measures. Because of contractual penalties, the company stood to lose money and orders if it could not meet promised delivery dates.

Business challenge

The challenge was to assess the capabilities of the client’s distributed manufacturing environment and design and implement a lean production system to double production capacity in a relatively short time period.

Solution

• CBS thoroughly studied the client’s production facilities and capabilities and recommended the most appropriate production system based of the volume and variation of the products.
• The consultants determined the theoretical lead time of each product line and used that to establish strategic objectives for each area.
• Process improvement personnel in each area of the client company were engaged fully to ensure that changes to the production system would be sustainable.
• A team of CBS consultants and the client company’s assembly personnel:
  • Developed capacity tools for critical product lines and incorporated these tools into sales and operations processes.
  • Identified and eliminated non-value-added activities.
  • Implemented a takt-based production system in a low-volume, high-mix environment that divided tasks into day buckets.
  • Trained operators and leadership in the new system.

Results

• Doubled shop capacity in four months.
• Reduced product lead time to 13 days from 50.
• Increased productivity by 40%, resulting in a return of approximately $10 million over a two-year period.
• The production line has sustained these improvements with little outside intervention.