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Propelling operational excellence and turnaround at a distressed company (CS277)


This story is for CEOs who:

  1. Want to turn around a company before it fails
  2. Have run out of options for increasing throughput and quality
  3. Want to create an environment conducive to operational excellence (OPEX)

The Challenge

Disorder reigned at a high-pressure die casting and machining company, impacting material flow, productivity, and quality. Customers were so annoyed at the number of rejects they received that they insisted on a third-party inspection; 12% of “finished”parts failed that inspection. Investors were anxious to recoup their investment, but the distressed company was close to shutting down.

Accelerating material flow, reducing costs, and reallocating resources to achieve OPEX

SGS Maine Pointe:

  • Ensured efficient and seamless production with higher throughput using the principals of 5S (sort, set in order, shine/sweep, standardize, and sustain) and multi-shift coverage
  • Analyzed process cycle times and work in progress (WIP) to reduce inventory and the cost of finished goods while meeting customer requirements
  • Bolstered productivity in a tight labor market to reduce manpower requirements
  • Cross-trained and reassigned workers where they were needed most
  • Created a process map for material flow and scheduling to identified 80% of the bottleneck issues
  • Improved communications and coordination between functions

Lessons learned for other executives

  • Long hours can derail productivity for both workforce and assets
  • Finding opportunities for improvement requires analyzing capability, capacity, and asset utilization
  • Operational excellence can turn around even a company in deep distress

The Results

  • $3M ROI

  • $1.7M annualized savings

  • 65% reduction in dimensional scrap

  • 50%-120% upswing in productivity

  • Identified 37 opportunities for improvement in throughput, quality, and efficiency

  • Eliminated the need for third-party inspections

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