A Lean/Continuous Improvement (CI) culture in the mold making industry leads to the achievement of increased profit margins by means of a serious commitment to excellence in quality, customer satisfaction, increased revenues and cost reductions.
The implementation of a Lean/CI culture in the manufacturing industry of molds provides tangible results while addressing and focusing on the improvement of specific and well determined key performance indicators (KPIs) in order to enhance operational efficiency as for instance eliminating bottlenecks in a plant/office workflow so that cycle times can be reduced and provide more value to customers in a shorter period of time. A few examples of KPIs are listed below.
On-time delivery ratio: quantifies the number of order that were delivered to customer as agreed in PO.
Scrap rates: quantifies amount of WIP/finish product disposed due to non-conformance.
Labor costs/part: quantifies the total labor costs per part.
Actual costs/Estimated cost: ratio that compares the overall cost of a mold relative to the estimation used for the quotation.
Profit margin: it can be used per business units (plants) or by product type. Low profit margins are indicators that cost reductions must be addressed.
Overtime/regular hours ratio: measures the cost of overtime labor relative to regular labor.
Sales Cycle time: depending on each organization, it normally measures the time elapsed from the generation of a lead to closing a sale.
Average time to achieve goals: measures the efficiency of employees to evaluate how long it takes them to achieve specific goals.
Employee training: courses provided to employees. This KPI is meant to impact employees productivity, loyalty & satisfaction.
Employee retention rate: measures staff turnover. Poor talent retention is associated to high costs.
A manufacturer of injection blow molds based in the Greater Toronto Area was facing significant operation issues as for instance: low efficiency rates, excessive labor costs (and significant overtime labor hours) and poor compliance with timelines caused by internal delays as well as outside vendors. In order to address these problems the operations manager decided to implement a Lean Six Sigma/Continuous Improvement (CI) culture within the organization.
The company invested time in training his employees in Lean/CI principles and tools and then embarked upon the implementation of the following:
SMED (single minute exchange of die): to reduce setup times, reduce the non-value-add operations during machine setups and to reduce equipment downtimes.
5S: to improve workplace organization and reduce time while looking for tools.
Kanban: for material replenishment and WIP feeding production cells in a chronological order to comply with schedule.
Reduced transportation: relocated the mold assembly cell closer to consumables supplies so as to reduce transportation
After implementing these Lean Manufacturing/CI principles the company was able to achieve an increase of profit margin per mold in the order of 23% by means of reducing labor costs and increasing their operational efficiency. Further gains were observed with the reduction of subcontract costs and 15% average reduction in lead times.