Meeting Increased Customer Demands

The Challenge of Meeting Increased Customer Demands

Situation:

With a goal of reducing year over year cost margins by 10%, Company A, was struggling to meet their customer’s increasing demand for products without applying additional resources on the manufacturing line.  While the customer was receiving their needs on schedule, Company A was experiencing an increase in all operating costs for this particular product line.  With the economy continuing to struggle, there was increased pressure from the organizations management team to deliver products at a reduced cost.

Strategy:

Our successful Think5TM model was utilized to assess all manufacturing operations required to build a unit and determine the operational Takt time to meet the customer’s needs.  Once determined, the operations to build a product were structured so that only the necessary amount of resources for the line were used to meet the customer’s demand.  Time studies were then utilized to determine the appropriate function(s) for all personnel on the manufacturing team. A Line of Balance technique was employed to measure the effectiveness of manufacturing line.

Outcome:

By utilizing the Think5TM model, the demand of the customer was able to be met by applying the right amount of qualified resources to perform each operation.  A line that previously required 10 manufacturing operators to meet the customer’s demand was able to be reduced to 8.  With the average labor burden cost per production hour being, x, the reduction of two assemblers from the manufacturing line resulted in over $100K of savings per year.

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