Cornerstone Consulting Blog

Plastics Manufacturer Cuts Costs and Boosts Profits with CCO

Jun 18, 2019 7:43:00 AM / by George McAfee

plasticsChallenged with extreme quality and delivery issues, a plastics manufacturer retained Cornerstone to lead an aggressive operational recovery effort.

 

Background

With antiquated equipment, staffing issues, and increasing demand, our client’s on-time delivery performance was suffering. Changeover times were increasing; unplanned maintenance was crippling overall equipment effectiveness (OEE); and material conversion rates had become highly inefficient. Entropy had consumed the operation. The result was suspended or significantly disrupted vehicle assembly, excessive premium freight charges, high employee turnover (especially in key positions), and a loss of customer confidence.

 

Methods Appliedoperational excellence

The Cornerstone team arrived on September 10, 2018 and immediately deployed our fundamental crisis management elements of the Cornerstone Way.

  • The CCO team joined the local “fire fight” to ensure customer supply and stabilize customer-facing metrics.
  • CCO staffed and sought to optimize warehouse and dock operations.
  • Senior operational leaders were assigned and initiated a TPM blitz to restore operational capability of critical presses.
  • OEE was analyzed at localized cell level, and fixture maintenance was prioritized accordingly.
  • Process technicians were trained in advanced trouble-shooting methods to accelerate corrective actions on IM/BM molding presses.
  • A critical review of historical downtime, efficiency, and scrap data was conducted and corrective action initiated. Throughput velocity had to improve in order to optimize performance in quality and output.

To attack the elevated changeover time, dedicated resources were assigned as teams for staging, setup, and material changes, and some innovative visual management was applied at point use. Air and water lines were uniquely color coded, and quick connects were installed to eliminate the possibility of wrong connections. Standard work was developed and associates properly trained. Change times immediately reduced.

Quality auditors were trained, mentored, and dedicated to zones to limit escape rates and lower the intensity of the customer-led production readiness reviews (PRR).

 

Results

Cornerstone’s aggressive operational leadership resulted in an almost immediate impact on supply issues and a more than 90% reduction in expedite frequency and costs (see performance chart below).

expedites to customer

Additionally, CCO’s improved leadership, targeted mold process optimization, and selective major maintenance activities improved the aggregate OEE measure by over 17% (see OEE trends below).


OEE by month

Cornerstone’s implementation of a fast-response process, upgrades to GP12 methods, technical problem solving, and upgrades to the talent quality in the organization reduced problem reports from customers by more than 60%.

Profitability improved by $1.4 million per month, consisting of a $600,000 direct labor absorption, reduction of 40 indirect employees, and lower expedited freight (see labor absorption trend below).

 direct labor under absorption by month

Through rapid deployment of the Cornerstone Way, with signs of recovery in less than 30 days, CCO was able to transform the manufacturer’s organizational fatigue into operational FITness, and the war against entropy and external Murphy was being won.

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Topics: Manufacturing

Written by George McAfee