Context

A rapidly growing metalworking company works as a subcontractor for major construction businesses and manufactures products under its own brand.

The raw materials consist of sheets of various types of steel, accessories, and components of various kinds used in the products that are made.

The sheets are cut, bent, welded, painted, assembled, and packaged for shipment to the construction sites, where the customer’s staff will handle installation.

Challenge

The acquisition of a new, major client and the organization’s steady growth made management aware of structural gaps in the work methods used (amateurish and varied), particularly for developing complex projects such as industrializing a completely new product within the existing flow.

The main doubt was whether the plant could cope with the current demand combined with the new volumes. In addition, the budget had already included the insertion of new machinery and bright prospects to enter new business, which would further saturate the company’s capacity, with a potential risk of delays and an increase in non-quality costs.

Improvement actions

With an improvement outlook in the short-to-medium term, the following improvement activities were carried out:

  • Project Management - the staff involved was trained and supported in implementing the Critical Chain and Buffer Management methodology, through the planning of the scheduled activities and resources for the industrialization and series production of the new product, supported by management tools, periodic progress meetings, and staff accountability in carrying out assigned phases, as well as in resolving critical issues that emerged during the project;
  • Operational flows - by using the VSM methodology and requirements planning, the flows of operations and internal logistics were defined, along with work cycles;
  • Equipment - in order to manage the materials and intermediate stocks of incoming new products and by-products, pallet holders were installed, cutting workbenches equipped with suitable tools were set up, workbenches for assembly were created from scratch, processes were standardized, and work procedures were defined to ensure quality and production lead times;
  • Re-layout - the plant re-layout moved on two distinct fronts: the total optimization of the company’s internal transportation and re-layouts for the installation of the new machinery. During the execution of the new layout for installing the new machinery, future developments for potential new products to be manufactured and the strengthening of the assembly department—long under heavy pressure due to delivery delays—were also taken into consideration;
  • Management control - in order to establish a governance system for profitability and determine the actual costs of the new product, management control was implemented on the new flow and a standard methodology was structured to be used throughout the entire organization;
  • Automation - once the industrialization of the new product was completed, the improvement activities focused on standardizing the processes to minimize all non-value-added activities required with the arrival of series orders.

Result

Despite the complexity of integrating the new product into an existing product catalog, made up of a high mix of components, the diversity of supply (subcontracting, production, handling only, storage, different counterparts, etc.) and the new processing steps (including some classified as special), the company managed to deliver the first orders within the timeframes set by the contract without any day of delay.

The re-layout also made it possible to reduce internal transportation by 19% and, by standardizing the constraint (initially assembly), synchronized with painting, it allowed to increase the capacity by 29%, thus maintaining the previous production balance of the plant.