Asset Optimization & Lean Enterprise
Telecommunications Equipment Manufacturer
Our client provides integrated end-to-end connectivity solutions for voice, data, and video and is a worldwide market leader in structured cabling systems.
Background
This Midwest manufacturer had a rich heritage going back to 1956 as a part of Western Electric and AT&T. In 1996 AT&T spun off the manufacturing portion of its business and then in rapid-fire succession, this manufacturer was sold off two additional times within a three-year period. The 2 million square foot facility was highly respected for quality products, but was also viewed as having little regard for profitability – a remnant of its deeply steeped cultural heritage.
The new owners and leadership team had a significant challenge: quickly gain more control over manufacturing costs, reduce manufacturing cycle times, and improve quality/customer service levels. More importantly, they needed to change the lumbering, bureaucratic organizational culture to one that was more nimble and more accountable at lower levels of the organization. They needed to make this 1,200-person organization viable in a more competitive business environment.
MTG was asked to perform an assessment to identify and quantify improvement opportunities, understand the cultural environment, and develop an overall implementation plan to transform the organization. The assessment identified significant opportunity for improvement and resulted in the following project objectives:
- Implement lean manufacturing tools and techniques, including:
- Flow manufacturing
- Pull material management system
- Standard work
- Work Center Management SystemSM (WCMS), which would include visual displays, daily shift start-up meetings, improvement action sheets, and fully aligned metrics
- Develop a plant layout to significantly reduce the current manufacturing footprint
- Plan and execute equipment moves without impacting customer deliveries
- Design and implement a Focus Factory-based organization structure
- Drive accountability and decision making down to the lowest employee level
- Reduce costs by more than $20 million annually
Approach
The implementation project was structured to include the following workstreams: Manufacturing, Supply Chain, Maintenance, and Enabling (initiatives rationalization, organization design, metrics).
We began by establishing a core team comprised of 12 professionals from MTG and 11 dedicated client resources. This team developed the overall implementation schedule, determined resources, and executed the plan. Each of the core team members was trained in lean manufacturing tools and techniques and MTG’s implementation methodology.
Specific implementation activities included:
- Conducting Accelerated Change Process (ACP) events within each business unit to drive rapid change and operational improvement, while training all employees in Lean manufacturing concepts
- Major changes were incorporated into SAP to handle the new requirements for Demand Planning. This reduced the cycle time from forecast to operations plan from 21 days to 6 days. These changes also reduced the frozen schedule from 60 days to 30 days.
- Consistent metrics were established for all areas across the organization
- Established a Cabinet Focus Factory:
- Sheet metal stamping and processing was consolidated and excess equipment removed and sold
- Final assembly was consolidated into six (mixed model) flow lines with feeder operations
- MRP was replaced with pull systems and kanbans
- WCMSSM was implemented in all areas
- Major system and process changes were made, from demand forecast to shipping
- Established a Cable Focus Factory (with the main goal of reducing non-base activities):
- Relocated D2000 packaging machines
- WCMSSM was implemented in all areas
- Established an Apparatus Focus Factory:
- Molding and stamping were consolidated and excess equipment removed
- Final assembly was consolidated into cells with feeder operations
- MRP was replaced with pull systems and kanbans
- WCMSSM was implemented in all areas
- Major system and process changes were made, from demand forecast to shipping
- Plant Maintenance and process changes:
- Area maintenance initiatives completed across the facility to address equipment reliability issues
- New metrics and work practices implemented
- WCMSSM was implemented in all areas
- Supply Chain process changes:
- Conducted Accelerated Change Process events with major suppliers
- Designed and initiated supplier owned and managed inventory programs
Results
Significant benefits were achieved as a result of this effort. On target with original objectives, a Focus Factory organization was implemented and overall costs were reduced by more than $25 million annually. As anticipated, floor space required was reduced to approximately 600,000 square feet.
Additional benefits included:
- On-time delivery percentage was increased from an average of 45 percent to over 80 percent
- Approximately 50 percent of the equipment in the facility was excessed and removed
- Several buildings on the campus were excessed and sold/leased
- Costs and time associated with plant rearrangement were significantly under budget and on time
- The business volume in two of the three business units increased by more than 65 percent. This increased volume is being handled by approximately half as many people.
- A streamlined senior management and support organization that was moved from a separate administrative building and re-deployed into the manufacturing operations.
During a discussion with the president of the division one and a half years after MTG’s involvement, we were told that the local organization had continued to progress the improvements initiated. Additional comments included:
- The president felt that if we had not helped them when we did, they would have lost jobs for 1,200 people, rather than being able to save 800.
- “We saw (MTG) as a box that was delivered, opened, did what we needed to, got it done, and then (we) packed it up and shipped it home.”
- “You brought (a fresh set) of eyes with a variety of problem-solving skills and various skill sets from real-life situations.”
- “The organization now owns the improvement process, and they continue to move the ball forward each and every day.”
