Case Study 1: Electronics
Background
This medium sized company provides a complete printed circuit board (PCB) solution to the electronics industry. The company can manage the PCB supply chain from PCB design, quick turn prototypes to production quantities, component kitting and assembly.
Problem
The lean start initiative concentrated on the miscommunications and rework associated with the order fulfillment process with specific focus on the CAD design process.
Goal
To improve internal communication between business functions from design to subsequent downstream activities.
Results
- The company experienced a 7 % labour cost saving as a percentage of sales particular to ‘complex’ design projects.
- Improved communication flow resulted in a labour cost saving of 2.5% in assembly and design functions.
- A 38% reduction in the value of design hours not billed was achieved.
Case Study 2: Engineering
Background
This midlands based company is a specialist designer and manufacturer of wastewater treatment products.
Problem
The lean start initiative focused on reducing the ever increasing overall operating expenses of the business concentrating labour costs in the salad sector of the business.
Goal
To establish a cost of sales model covering materials and labour for the main products, to develop a P&L for the financial year. To identify improvement programs to bring company costs back into line.
Results
The key improvement measure used was operating expenses as a % of turnover. As a result of implementing agreed initiatives, operating expenses reduced to 41% of sales. The initiatives included:
- 20% reduction in overheads
- 10% reduction in material costs
- 25% increase in productivity
- 30% increase in sales
