The Vice President of a struggling aerospace parts supplier who knew our expertise called CREAN one day and asked, could you help me out. “I need to improve our operational performance and I wonder if you can just take a look around and see if you can find some low hanging fruit. We seem to be working harder and producing less and people are getting burned out on so much overtime.” We, of course said, sure thing, we love to help.
Six weeks later, after assessing the operation and then implementing CREAN Smart Factory Methods, their production rate had more than doubled. Their production rate increased by 47% from the prior 9 months and 152% from the prior two months. The amazing part though was that this increased output came at the same time that we dropped overtime from 100% of the production team doing 20 hours/week of OT to only 5% of the team, representing nearly $500k of annual savings. Factory capacity was increased by 73% and order to delivery cycle times were cut in half. This cycle times savings meant they could deliver faster than any competitor. With lots of new free capacity available to fill, a delivery time faster than any competitors, and a cost structure that was the best in the industry, our client’s customer engineered products business was set to soar. Pro forma monthly profits increased by a factor or 6 and profit margins jumped from under 8% to nearly 30% in just 6 months.
“CREAN’s improvements eliminated 81% of overtime… and added 74% to capacity. …They are not talkers, they are doers. They deployed a simple and unique solution for managing jobs on the floor that made the production floor almost self-managing.”
We do develop customized solutions using proven methods and technology. But the key is we do it quickly, so that our clients see immediate improvements and get immediate financial gains. In this case, the overtime reduction both gave the work force a break, but also paid for all our implementations and fees in just a few months and that wasn’t the profit enhancer.
The immediate profit gains from producing twice as much at significantly lower labor costs, resulted in a 250% ROI in their investment in CREAN. Some say we should raise our prices, but our view is it is your business, we are just here to help find a little low hanging fruit.
CREAN. Complexity Simplified™