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Operating Cost Reduction and Facility Design

 

PROBLEM:  

A forging, finishing and assembly operation of a Fortune 100 company occupied 210,000 sq. ft. of antiquated production space spread across 26 buildings.  Twelve distinct product families and more than 3,600 products were manufactured in the facility.  High building maintenance and material handling costs significantly impacted the plant’s profitability.  Although management had implemented a successful quality system and numerous manufacturing cells, continued improvement was deemed unlikely until fundamental problems associated with the facility were addressed.

APPROACH:

A project team consisting of company and CMS people developed a comprehensive plan for defining and evaluating various layout options.  The team’s initial work involved establishing an accurate database defining the current layout and equipment.  To this, they added associated utility requirements and forecast production volumes by product family for the next five years.  Algorithms were written to accurately quantify total material handling costs.  Layout alternatives were generated and evaluated using computerized industrial engineering techniques.  This approach enabled the team to make data-based decisions throughout the project.  A recommended layout was developed, preliminary construction costs determined and cost/benefit analyses completed.  Finally, a move logistics plan was defined to support implementation of the changes while minimizing disruption to production operations and customer service.

RESULTS:

Accommodating a number of operating and process constraints, the team recommended a strategy which utilized 70% of the current facility.  Eliminating buildings in the poorest condition resulted in a one-time maintenance savings of $450,000 and subsequently more than $150,000 per year.  Streamlined process/material flows reduced material handling costs by $150,000 per year, increased inventory turns by 30%, and reduced overall plant size by 16,000 sq. ft.  The new facility also supports significant growth in production volumes.  

Process Improvements and Facility Design

What We Do

Process Improvement

Quality

Organizational Management

Systems Implementation

Industrial Engineering

Training Within Industry

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Vice President

120 Assembly Drive, PO Box 339 ~ Mendon, New York 14506-0339 phone: 585-624-7660 ~ fax: 585-624-7668