A very Lean global automotive Original Equipment Manufacturer had to very quickly increase production volumes because increased demand had created a backlog

Context

This case study is about a mission Marris Consulting did in 2011 in Mexico for a large automotive equipment manufacturer, which was reputed to be among the 30 best practices in terms of Lean Manufacturing in the world. The factory was about 1,000 people broken up into 20 autonomous production units.

Our client’s need

Our client asked us to help them in one of their factories in Mexico. Their problem was that they were not managing to produce enough. There was a reasonably low demand for their products in previous years and suddenly, the demand rose. They started having trouble delivering their clients on time and honoring their orders. They asked Marris Consulting to try and help them by injecting Theory of Constraints into their system to see if we could produce more in that way.

Objectives

The goals were:

• To increase the production volumes very significantly to meet a significant increase in demand

• To eliminate the client delivery backlog

• To put an end to colossal Premium Freight expenses (airplane deliveries)

• To restore the client confidence of its clients, especially its biggest customer, one of the world's largest car manufacturers.

Approach used / Process

First, we went to the factory and quickly identified which part of the 20 production units was bottlenecked. We identified two and a half of them as being bottlenecks.

To build the product, a dozen of operations is needed. The bottleneck was one of these operations, in a production unit of about 10 people and producing about 6,000 units a day on a 24-hour basis.

They had already formally identified their bottleneck correctly with a sign next to it saying, "this is the bottleneck."

So we implemented one of the Theory of Constraints rules about 1 or 2% of the whole principles of the Theory of Constraints, which improved the throughput of the unit's performance by over 15% in 15 minutes.

How did we do that? What rule did we use?

We just added a buffer here in front of the bottleneck.

And in 15 minutes, what we did would change the rules. We said there should always be at least four parts, that is to say, four times 15 seconds, about a minute's worth of work. And that was enough to absorb all the micro stoppages on this unit. That ended up being a 17% increase within they are on a stable basis simply because they were getting lots of jams from this resource which was a non-bottleneck but not that reliable, and therefore we were losing quite a lot of time there.

The approach in the video: How to increase productivity by 15% in 15 minutes?