CSense SME Consulting Case Study
Will Technology Solve your Problems?
Ever increasing Labour Cost
Slowly it was dawning on them that to be successful tomorrow, you need to wake up today – that too as an SME you need to wake up early.
That is a small company run by two brothers. They design, manufacture the furniture and equipment used in hospitals and laboratories. The business has never been phenomenal but it kept ‘running’. With more than a decade in the market, it takes care of itself and its owners.
They started feeling the change in market conditions – which were inflicted majorly due to cheaper imports. They were pushed to differentiate their products. They upgraded their website.and intensified their presence in the market. As a next step, they procured advanced robots for welding – to have a technological edge over the competition.
But somehow, they could not crack it. There is something happening in their business that is eluding their focus. Completing the regular orders and despatching them on-time was becoming a herculean task. The increase in demand for labours in the plant had surpassed the actual increase in sales. The labour cost was alarmingly high against the dwindling profit margins.
As the volumes increased, the need for additional space become dire and dire. Though they were in the hunt for a suitable space, they were not fully convinced with the expansion plan. Adding to their woes, their robotic welding process was struggling to make a mark.With increasing absenteeism and attrition of labours, they could not feed the robots with required economic batch sizes. Their current upstream processes were unable to produce the precisions required by the robot.
This is when we met. We wondered how things worked in the given conditions. None of their operators could track an order from its first operation to its current status. As we expected, there were problems with their supply chain as well. There were too many inventories in the shop floor – most of them were not being attended and there were an equal amount of ‘lack of materials’.
Based on our diagnosis studies, we prioritised our focus on to the shop floor. With the market conditions and existing pipeline of orders, we arrived at the sales and pricing plan for next 2 years. They agreed to ramp-up orders within next 3 to 4 months – though at that time it would be sounded as an irrational thought to increase the sales volumes.
Together we Achieved
We worked with the teams on the shop floor to unearth the maximum potential of the plant. An interesting and notable incident happened on the first week of our intervention in their shop floor. On the second day, I was waiting for the team to turn up early after lunch break. But none have come. I found them seriously discussing with the owners. They were upset with a remark made during the session.
Measuring and Marking are Waste (Muda)
Gradually, we worked on debottlenecking the processes eliminating waste. We also brought in some common sense systems to have a control on materials visually (both in process and input materials). Within 4 months, there were changes beyond their imagination. There were the least number of inventories and an ample space remained vacant. Their orders started moving smoothly.
Their output gone up by 4 times (not 4% its 400%). Their labour productivity got doubled. They needed more orders to keep the people engaged.
The Future is bright
With additional space, people and capacity in hand, they started obtaining job works as well. Their robo-welding was a hit in the market for job-works. their product quality was sharply improving with ‘no measuring and marking’. they were comfortably meeting their delivery commitments and see a fresh hope to face the challenges of future.