Increasing production capacity to capture growth opportunities in new markets

Background

A manufacturer of heavy-duty vehicles was in urgent need to increase their production capacity as they experienced a significant increase in demand from new markets. They needed an estimated capacity increase of 40% within a 12-month period for their main product to fully capture the growth opportunities in new markets.

Approach

In order to accommodate the increase in capacity, a programme was put together across two factories and all their departments with laser cutting, flame cutting, bending, welding, machining, painting, assembly, testing and finishing. 

Implement conducted the initial analysis of the production system and was the main driver and support for the organisation all the way to the final implementation of the suggested initiatives.

The project contained the following key elements and solutions:

• Operational analysis: Implement initiated the project by conducting a detailed operational analysis and diagnostic of the manufacturing system and processes to identify the key challenges and potentials for improvement.
  
• Process management: Following the initial analysis results, we supported the implementation of several process optimisation initiatives, new ways of working in the factories and more rigid performance management. The improvements included redesigned production processes for better efficiency, installation of new equipment for automation and optimised machine setups (OEE).
  
• Optimised flow: Early in the process, we changed central planning principles to support the changes in production through smaller lot sizes and a standard sequencing of weekly orders. Later, after productivity had been raised upstream, the assembly was changed to takt-based assembly, together with additional improvements in the physical product flow through the factories.
  
• Lean manufacturing – bottleneck transformation: The operational analysis identified the factory’s paint shop as one of the key challenges to increasing the overall capacity. To increase the bottleneck capacity, we helped carry out a complete transformation of the paint process with the employees using an entirely different concept, which allowed for a productivity increase of 76% on the paint system.
  
• Implementation of additional assembly capacity: The project also included supporting the design and implementation of additional assembly lines across the two factories. We helped establish equal standards and capabilities across factories to ensure a balanced production with one standard. Lastly, we helped set up new transport routes and material replenishment cycles to improve factory flexibility and communication.

Impact

As a result of the project, the manufacturer achieved tangible improvements to the capacity through both the productivity and efficiency of the factories.

The improvements included:

• 40% capacity increase in line with targets.
• 76% productivity increase on the main bottleneck
• 50% productivity increase on selected key work centres
• Component production increased by 40%, while factory lead time on main components was reduced by 25%

In addition, the project provided the organisation and plant managers with a better understanding of performance and planning. The initiatives created ownership and motivation on the shop floor as the manufacturer now actively involved factory employees in improvement projects. As a result, the project also played an important role in defining the future production strategy towards the goal of increasing capacity even further.