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ELECTRONICS INDUSTRY:
Manufacturing Performance
Facilities Consolidation |
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Client: |
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A
division of a Fortune 100 company with considerable military contracts.
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Problem: |
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Competitive
pressures were forcing the company to reduce costs and significantly
improve cycle times. Products using similar parts, processes, skills,
and equipment were being manufactured at six different sites but were
not benefiting from economies of scale, new manufacturing methodologies
or organizational concepts. Also, best practices from one site were
not always shared with other sites. |
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Approach: |
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The plan was to consolidate operations into two regional electronic
centers (RECs). The RECs determined which components / parts would
be produced, which would be outsourced, and which site would produce
them, using which best practice(s). The equipment was inventoried,
evaluated and distributed. New layouts, material flows and inventory
levels were established. New business systems were developed. An organizational
concept using empowered employees in self-directed work teams and
a flattened management structure was installed. Newly-hired employees
were screened and tested for their ability to adapt to the new environment.
Everyone was trained in the new concepts. |
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Results: |
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Average costs
were reduced approx. 30%, cycle times cut in half, inventories reduced,
and quality significantly improved. Teams of workers met daily to
manage workflow and make assignments. Flexible equipment designs and
utility installations provided opportunities to reorganize work centers
for optimum workflow on a daily basis. Manufacturing floor space was
reduced by more than 50% and most leased space at the six facilities
was eliminated. Morale was higher even though hourly rates were lower.
Point-of-use-storage of certain parts was employed, and information
systems tracked each part / component and the associated costs. |
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