Lean Case Study in Automotive OEM-Tier 1

Improving Product Efficiency 91% in 20 Weeks!

Project Title: Improving the plant layout to minimize unnecessary material conveyance, reduce Muda, Mura, Muri and increase the productivity in the Chain Tensioner Assembly Line.

Problem Statement: Current machines, their layout in two sheds and process sequences require frequent movement of operators and components between the sheds resulting in Muda, Mura, Muri and, ultimately, reduced productivity and more rework.

Synopsis: The weekly demand for chain tensioner assembly is 350 units. The machines are located in both sheds, which are 100 meters apart, have few common machines and one specialized machine to do the final finishing operations. The organization was producing only 240 units per week against line’s rated capacity of 370 units/week. Additionally, the rework was very high at 14% against company’s target of 5%. The organization’s management decided to study the problem and suggest/ implement methods to improve the productivity.

Metrics Used: Improving the plant layout to minimize unnecessary material conveyance, reduce Muda, Mura, Muri and increase the productivity in the Chain Tensioner Assembly Line.

Lean Principles Used: 5S, visual controls, Poka-Yokes, standardized work methods, spaghetti diagrams, Withdrawal Kanban’s.

Project Title: We developed the following 3 basic forms for creating standardized work:

  1. Process Capacity Sheet – to calculate capacity of each machine in both sheds and arrive at the optimum combination of machines to be kept in a single shed
  2. Standardized Work Combination Table – showing combination of manual work time, walk time, and machine processing time for each production operator and arrive at the exact number of operators required after layout changes to produce the weekly demand.
  3. Standardized Work Chart – showing operator movement and material location in relation to the machine and overall Process layout.
  4. We thoroughly studied the existing 1S and 2S and modified it according the revised layout. We then further developed Work Standards Sheet and Job Instructions Sheet.

We developed current and future Spaghetti Diagrams to trace movement of components, men and information. We assessed the effectiveness of existing 5S system, re-planned the zones and sub zones after lay out changes, audited the current Standard Work Methods and revised them thoroughly after lay out changes. We evaluated current machine downtime cause wise and developed improved maintenance practices to reduce it, for example, cleaning-3S. We developed a Kaizen Template to capture before and after status, developed a Gantt chart to follow up the weekly progress in relation to the plan, and assisted the team to develop Six Poka–Yokes to reduce reworks/defects which were not present earlier.

We provided up front training to all members on 5S implementation with emphasis on its contribution towards improvement of productivity, quality, delivery, cost reduction and improved safety. We also guided and assisted them in all aspects of the improvement activity and ensured continuous improvement in the organization by involving leadership in the process.

We modified the layout by relocating some machines from one shed to another, and changing the process route of the material from going between two sheds to being restricted to within a single shed and not requiring additional transport. This step reduced the cycle time significantly and productivity improved from 65% to 75%. Additionally, we were able to reduce WIP by nearly 50 components/day due to the improved continuous flow of operations and this saved the company nearly USD $1500/month. Rework was reduced from 9% to 14%. The new modified layout with more effective 3rd S reduced machine downtime to 500 minutes/week from 700 minutes/week.

Two weeks after layout changes and machinery relocation, we visited the shed in all three shifts and observed continuous flow with no unnecessary transporting material. Uniformly, all shift operators expressed their satisfaction and comfort in the new layout and informed us that they have less physical strain now and hence could concentrate on productivity, quality and reducing rejects. However, the efficiency levels of all operators have not reached a uniform level even after 4 weeks and operators needed additional training to improve their efficiency in the new layout and process sequence, which we initiated immediately. We made a point to visit the shed every two days and helped the team to improve further.

Results Achieved: After the initial layout changes, we reached 75% against our target of 85% in the first phase of four weeks and reached 85% by end of seven weeks. This gap in efficiency is mainly due to lack of skill training to operators in the new layout and process sequence mentioned above. However, we were able to reduce inventory, reduce cycle time and machine downtime by 200 minutes/week, and improve 5S Score of zones.

We mentored this assignment continuously by regular visits, and interacting with everyone. We prepared the final layout of all machines, facilities, marked gangways for material movement, and developed a visual factory. Next, instead of manual recording of machine utilization, process output, waste etc. as is done currently, we linked the machines to a centralized computer and installed production analysis software to display hourly performance through smart screens in the work place. This action avoided human error completely, motivated everyone and introduced incentives for higher achievers. We developed a revised 5S manual, fifteen SOPs, re-trained all operators on revised SOPs and ensured improvement would be sustained.

By end of 12th week, the production efficiency improved to 87% and by end of 20th week efficiency reached 91% with rework reduced to only 7%.

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