20% direct labor reduction for processing facility

Client Overview

The client was a processing facility in a heavily regulated industry. The facility included several independent processing areas, none of which were loaded to full capacity. The result was poor operating margins.

In addition, the client was in the midst of implementing a heavily modified, high-end MRP package to satisfy industry specific regulatory requirements. The implementation was several years behind schedule and millions of dollars over budget. The new MRP package was required to accommodate new manufacturing process that the old MRP package could not handle. The client had determined that the new MRP was corrupting data that had to be tracked to conform to their site operating license.

Our Involvement

We were brought in to improve profitability; however it soon became clear that the most pressing issue was resolving the data corruption concern. The software development team was swamped with support requests and with meeting development milestones to which they had previously committed. We held an all hands meeting in which we resolved that data integrity was the highest order of priority. We isolated the development team and short interval managed them through a data integrity validation. We determined the root cause of the data corruption, developed a program to repair the corrupted data and piloted the repair program on a test database. We shut down operations and ran the retrofit program, a 72 hour processing task.

To improve profitability we developed a block-scheduling program. We cross trained their operators and began running different processing areas sequentially rather than concurrently. Additionally we restructured the client’s organization to improve information flow and reduce process decision backlog.

The Result

In addition to bringing the MRP implementation back on track, we provided the client with a different approach to running their business. This, coupled with the improved information flow and organizational restructuring, allowed a 20% reduction in labor (direct, indirect and overhead).

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