Manufacturing cost improvement is a real opportunity for UK business

The need to improve manufacturing performance and cost of production has never been greater with pressure from shareholders, customers and competitors constantly providing an incentive to achieve World Class levels of performance. This is despite at least two decades of a whole manner of improvement initiatives such as Lean, Six Sigma, Business Process Re-engineering and a host technology led activities. However the sad truth still remains that most organisations still have massive opportunities to improve the performance and ultimately the cost performance of the business.

A Structured Programme – Proven Results!

Businesses are constantly being squeezed to reduced selling price or improve delivery times as customers become more and more demanding. Often though this increased pressure manifests itself not in improved performance but perversely enters a downward performance spiral as the increased pressure forces short cuts and mistakes under pressure.

MCP has been involved with delivering a fast track Manufacturing Cost Improvement programme across industries as diverse as Food, Pharmaceuticals, Furniture and Chemical.

This programme is targeted at manufacturing/site directors and managers who need a rapid increased and sustainable increase in their plants performance. A typical intervention will last 10-12 weeks and be delivered in 3 phases through a combination of the MCP team who provide coaching, training and guidance working alongside the company’s staff to identify and make changes in working practices with a focus on cost reduction in terms of:

  • Labour costs
  • Material costs
  • Administration costs
  • Downtime costs

However not all of the benefits that accrue through this programme are of a financial nature, benefits will also accrue in quality and compliance, delivery performance and in plant capacity.

The stages of the programme are:

  • Week 1-Diagnostic and measurement of the size of opportunity
  • Week 2-develop and agree implementation plan
  • Week 3-10 Support implementation and provide coaching and training
  • Week 10-12 deliver sustainable benefits

Pharmaceutical Case Study

The process is best described using a case study. ‘Y’ is a pharmaceutical manufacturing plant, part of a world leading corporation and MCP was commissioned to carry out a 10 week manufacturing cost reduction programme on two pilot lines. The basis of the programme was to successfully implement a number of relevant tools and techniques onto the lines whilst moving to a team based structure with a dedicated team leader responsible for driving production.

The MCP team work closely with a team from the plant, which included supervisors, operators and craftsmen to both train the team in the use of the tools and techniques and then to help them implement the tools successfully on the plant. The management team supported the programme heavily and all levels from supervisor to the regional operations director were involved in awareness and training sessions!

By the end of the 10 weeks the original targeted benefits had been easily surpassed with savings of  £300,000 achieved and further savings of around £1 million available when the programme is rolled out to the other areas of the facility. Whilst these were the tangible financial benefits of the program there were many other changes to the way the two lines operated these included:

  • Team leader role developed and implemented on two pilot lines
  • 5S process implemented and now being audited daily by team leaders
  • KPI’s and daily monitoring in place in both pilot areas
  • Plan-Do-Check-Act cycle being used to drive improvements
  • Operator asset care tasks being carried out by operators on a daily basis on both pilot lines
  • Training in Operational excellence, 5S, Single-Minute-Exchange-of Die, team leader role and Continuous Improvement tools
  • Coaching/training of team leaders and manufacturing excellence champion
  • Development of a changeover improvement process
  • Review of manning levels across the plant
  • Standard operating procedures for changeovers developed
  • Trouble shooting guides developed for key areas
  • Implementation of Kanbans for raw material supply
  • Staff trained in use of risk based maintenance programme process
  • Revised Preventative Maintenance  tasks developed with frequency and skills

Realising Real Benefits

  • Reduction in manning of 22 people
  • Changeover time on Line 1 reduced to 50 minutes from 4 hours
  • Improved time to change parts on line 1 from 8.75 hours to 5 hours
  • Increase in Overall Equipment Effectiveness (OEE) performance on Line 1 to 58% from its initial level of 48%
  • OEE on Line 2 to 65% from its initial 53%

The business continued to implement these activities following the pilot programme and has recently completed rolling out the programme to all the manufacturing areas within the business.

This is a programme that has had significant success in reducing manufacturing costs and providing a sustainable basis for future improvement. However, it is simply not just about applying some improvement tools and techniques.  It is also about changing the behaviours of the people within the organisation at all levels. This means that the site management team have to take on responsibility and ownership for sustaining the improvements once the initial 10 week programme is finished. The impact on day to day life can be large with staff having more time to carry out activities efficiently and correctly first time and this brings a cash benefit to the business!

To find out how to reduce your manufacturing costs, contact