Valcon helps SPRING MANUFACTURER TO IDENTIFY REVENUE GROWTH OPPORTUNITIES BY RELEASING PLANT CAPACITY BUSINESS CHALLENGE A major supplier for springs (automotive/non-automotive applications) to OEMs was facing a supply-demand gap leading to: • Inability to meet forecasted demand of OEMs • Inability to meet sudden demand fluctuations • Inability to expand into new market segments such as two-wheelers • Pressures on margins due to inadequate capacity utilisation The company was contemplating investing in capacity expansion at a new location. Valcon was invited to identify opportunities to improve the capacity utilisation of the existing plant. HOW VALCON TOOK THE CLIENT FURTHER Valcon conducted a scoping study and identified the opportunities to increase the output of springs by ~24% of the current average production output from the plant. This would translate into: • Approximately 20% increase in the annual turnover assuming sufficient demand exists • Improved margins through better utilisation of assets HOW VALCON HELPED Capacity was estimated for all stages of the manufacturing cycle, by studying cycle times for operations, loading/unloading times, shift change-overs, machine speeds, etc. Figure 1: Establishing capacitiy in the first task Valcon used the throughput improvement model for discrete manufacturing to identify opportunities for capacity release. Further analysis into the bottleneck process enabled Valcon to identify the causes for capacity loss and bridge the gap between the realistic output possible and the current output. Figure 2: Bottleneck identification and utilisation. Process 6 is sub-contracted to vendor Estimated capacity v/s measured capacity v/s average production Day-wise (pcs) 46% 46% 82% 18% Measured capacity Estimated capacitiy Average production 45% 83% Process 1 Process 2 Process 3 Process 4 Process 5 Process 6 Figure 3: Throughput analysis model for discrete manufacturing Capacity balancing Planning and scheduling RM/PM availability Throughput Rejection & rework yield Manpower performance Asset utilisation Process performance Aided by tools like cause-and-effect and through process and work study, we were able to identify the root-causes that impede full utilisation of the plant resources. The four major areas of concern were: 1. High number of machine breakdowns 2. Lack of preventive maintenance culture a. Absence of criticality analysis of important equipment and root cause analysis for machine breakdowns b. PM checklists looked more like cursory exercises and were ineffective c. Breakdowns were repetitive and breakdown maintenance practice was being followed Management losses Planned downtime Set up losses Unplanned downtime/breakdowns Speed losses Rated capacity Estimated capacitiy Measured capacity Actual output d. High amount of data/information was being generated without effective use 3. Losses in set-up time of equipment were leading to capacity loss. Additionally, Valcon identified opportunities to reduce set-up time to improve utilisation of equipment 4. High day to day variance in production output The analysis of the capacities and study of the average current output highlighted the current utilisation levels and the bottleneck process. The bottleneck process was operating at 82% only, thus further impacting the output of upstream processes.
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