Introduction manex 2012

All Content © Copyright 2012, Manex Consulting

Introduction to Manex

All Content © Copyright 2012, Manex Consulting 2

The Corporation for Manufacturing Excellence (Manex)

• Since 1995, Manex has provided a broad array of proven solutions and resources exclusively to manufacturers, distributors, and their supply chains, enabling them to compete on a global scale

•Manex uses a holistic and proven approach, from strategy to implementation, to impact all facets of business performance

• Services areas include Strategy, People, Process and Performance•Results: growth, profitability, and competitive advantage

•Manex is one of 60 NIST/MEP Centers throughout the US. We are here to help manufacturers, distributors, and their supply chains grow profitably

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Manex (cont’d)• Focused on results and delivering Rapid ROI to position clients for

long-term success: Typical result is 6:1 ROI

• Affiliate of the National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) program. NIST MEP frequently cited as among the country’s most effective and successful public-private partnerships

• Booz Allen Hamilton cited NIST MEP as a significant factor in mastering innovation, showing NIST MEP program plays a key role in helping midsized companies improve their innovation processes

• Value Manex provides to clients is measured by NIST to ensure we meet and exceed clients’ business objectives

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Our Service Offerings

>>Strategy• Corporate Strategy and Business

Planning• Market Research and Development• Mergers & Acquisition Advisory and

Integration• Product Innovation• Customer Satisfaction, Loyalty and

Retention• Turnarounds and Workouts

>>People• Six Sigma Training• Organization and Operations

Design• Knowledge Management• Access to Federal and State

Workforce Grants• Nationally Recognized Lean

Certification Program

>>Process• Lean Manufacturing• Plant Layout and Expansion• Process Optimization• Supply Chain Management• Logistics and Distribution• Inventory Optimization

>>Performance• Benchmark Assessment• Management Dashboards and

Scorecards• Key Performance Indicators (KPIs)• Quality Management Systems• Six Sigma• ISO/AS Implementation and

Certification


Industry Focus & Expertise

• We cover a broad range of industries• Food and beverage• Consumer packaged goods• High technology• Medical devices• Aerospace• Commercial Printing

• Our sweet spot: Companies with revenues between $10MM and $200MM

• Our diverse team brings an average of 20 years of experience to deliver depth and breadth of industry and business know-how, from strategy through implementation, including former:• General Managers• Directors of Lean• Vice President of Sales• Directors of Logistics• Plant Managers• Fortune 50 Consultants

• Biotechnology• Pharmaceuticals• Precision manufacturing• Automotive• Rubber and Rubber Recycling• Construction


Rapid ROI Case Study

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Before After

Total Lead TimeTotal Processing Time

21 days6 days

15 days5 days

Sales Levels $24 million $29 million

Pre-tax Earnings 2.67% 5.51%

Valuation $10.9 million $16.75 million

• Becoming Lean reduced total effort, scrap, waste, conveyance/transportation, excess motion, energy/electricity and reduced time to ship finished goods• Results included increased product sales and prices, decreased cost of

manufacturing and defect rate• Improvements increased the value of the company by $6 million


Success Story – Biotech CompanyBiotech Company Saves $25 Million on Expansion

Client’s Business Needs• Medical device and software biotech needed to lower its cost structure to provide more features at the same price,

thereby providing more demand for its DNA sequencing products• Company sought to reallocate production and administrative resources into R&D, which would be the key enabler to

add features and functionality without adding to the price

Our Approach• Provided full-immersion Lean Training for entire team, starting with senior management• Value stream map (detailed view of all processes) and high-impact events to reduce non-value add activities• Workplace organization (process called 5S) of all workstations and production areas, to eliminate the biggest causes

of wasted time, motion and materials

The Results• 40% increase in productivity• Reduction of required floor space (“footprint”), eliminating need for a new building/facility• 100% increase in throughput in Surface Production• Reduced cycle time by 68%• Consolidated 2 manufacturing areas into a single area in less than 1 day• Reallocated 4 key personnel from production to R&D function

• Company announced IPO issuance in 2010!


Success Story – Defense ContractorThroughput Increased by 309%

Client’s Business Needs• Fortune 100 defense contractor and aerospace company received massive Department of Defense order• Company realized that they could grow their workforce to meet capacity, or improve operations and add

only a few new employees; they preferred the latter

Our Approach• Construction of current and future state Value stream map (detailed view of all processes) of their order-

through-delivery cycle• Identification of gaps and non-value added activities (between current and future state) and implementing

lean improvements to eliminate the gap and the non-value added activities• Highly engaged training for all division staff on lean, quality systems and workplace organization

The Results• 72% reduction, on average, of actual processing and assembly time• 95% reduction in defects and rework for finished components• 77% reduction in lead time (which increased productivity and sales opportunities)• $13.4 million lower labor costs• Carryover of concepts and improvements into Design/Engineering function and Stores Depot • Ability to propose contracts on a more profitable, “fixed price contract” model


Success Story – Coating & Sealant Co.Holistic Approach Drives 45% Reduction in Material Costs and 24% Growth in Sales

Client’s Business Needs• The management team engaged Manex to assess the current manufacturing operations and identify

opportunities for improvement from order entry through shipping. • Quality improvements and reduction in lead time led to an immediate increase in sales and demand.• With a sharp increase in sales, company’s capabilities were stretched to meet this increasing demand.

Company was now looking for a way to concentrate on operational excellence to help grow the business and increase revenue even more.

Our Approach• Conducted a detailed assessment consisting of 12 key business metrics benchmarked against leading

companies in the coating industry.• Developed a roadmap to help prioritize activities to support and achieve their short and long term

business objectives.• Lean methodologies were used as the foundation for continuous improvement. Manex trained the

workforce in 5S and the team implemented key process improvement activities (identified by Manex) and eliminated bottlenecks throughout their operations.

The Results• 24% growth in sales (year over year) • 45% reduction in core materials costs • 11% improvement in on-time shipments• 2 day shorter lead times in remakes


Why Implement Lean?

4 key points:

•Lean is simple

•Lean is common sense

•Lean can be used in any organization and in any area of the organization

•Lean improvements will drop to the bottom line

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What is a Lean Manufacturing System?

•Systematic approach

•Eliminates waste

•Continuous improvement

•Pull of the customer

•Pursuit of perfection

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Phase 1 – Typical Current State VSM

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Phase 1 – Typical Future State VSM

13


Impact / Effort Chart Prioritize Opportunities

Effort

Imp

act

12

3

4

5

6

7

8

9

1. Need Usable and Timely Metrics

2. Logistics Costs / Inaccuracy

3. Production Scheduling and Capacity

4. Warehouse Layout

5. Warehouse Processes

6. Yield Issue

7. Raw Material Availability

8. Weigh up Process

9. Product Hold for Test

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Reduce or Eliminate Non-Value Added Activities to Improve Efficiency and Sustain Growth

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Source: Manex Consulting


WASTE

Value Added vs. Non-Value Added•Value added is something the customer is willing to pay for. Value Added is anything that changes:• Form• Fit• Function

• Non-Value Added is:• Everything else

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NVA increases costsmaking us less competitive


Value Added vs. Non-Value Added

Examples:• Reach for the drill • Pull down wrench• Unclamp and clamp

Examples:• Drilling a hole• Installing a flange• Driving a screw

Example:• Walking to get parts• Waiting time • Part storage• Transport


Eliminating NVA (Waste) - DOWNTIME

18

DEFECTS OVER PRODUCTION WAITING

TRANSPORTATION INVENTORY MOTION EMPLOYEE

NVA PROCESSING


Focus on Total Costs and Not Just Labor

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Source: Manex Consulting


Importance of good quality

TypeAt 6σ (99.73%) At 4σ (95.46%)

2020

What is Your Quality Level?

Postal delivery in US

Surgical operations in US

Flight landings in US

Drug prescriptions in US

7 lost mails per hour 20,000 lost mails per hour

1.7 incorrect surgical operations per week

5,000 incorrect surgical operations per week

One short or long landing at major airports each year

Two short or long landings at most major airports daily

68 incorrect drug prescriptions each year

200,000 incorrect drug prescriptions each year


A Great Layout Reduces Costs

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• An effective layout reduces your costs, improves your quality and keeps your team working on what they do best, build and assemble wall curtains.

• Real life Ex: Aerospace client. Total Travel Distance for all components including Sub Assembly, Final Assembly in a 5000 sq/ft facility. Each assembly is $1.5MM!

• 122,610 inches• 10,217.5 feet• 1.9 miles for each major assembly


Typical Spaghetti Diagram of work flow for one part

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BSSE

3ph, 208V, 20A20 sq. ft.

11

Quad

14 sq. ft.

belt oven and small oven

114 sq. ft.

Thermotron

SCREENS

23 sq. ft.VISD

VMULT

VBIM“Depot 5”

VP

EM

VB

IM“D

epo

t 3”

VWPF“Depot 8”

VM

UL

T T

ES

T“D

epo

t 1

0”

VIFD2 Test“Depot 12”

VIF

D2

Tes

t“D

epo

t 1

1”

VMULT TEST“Depot 9”

Binford3ph, 208V, 20A

20 sq. ft.

Cabinet

6 sq. ft.

3ph, 400Hz, 120V, 20A outlet

3ph,60Hz 208V, 30Aoutlet




Assy workbench 25

Test workbench 30

Inspection Station 4

At all work benches: 1 ethernet drop 1 120 circuit

Julie

Pat

OVEN

Stamping / Part Marking4 desks

3 racks1 cart

3 Workstations to accommodate Humi touch up

Min. Req.: ethernet drop, standard 120

power, compressed air, and one needs a hood connectionWIP

182 sq. ft.

Vapor Degreaser 230 V 3KW

Vapor Bath Tank115 V 1.5KW

2 Workstations to accommodate

WIP Need ethernet drop and each bench needs

power

Office

10 sq. ft.

Phase 2 expansion

Occupancy – 6 max, 2 typical.

10 foot ceiling

Cable work Cell

Spray cool assembly7' between rows

CCA MODULE TEST7 ‘ between stations

Cabinet

9 sq. ft.

1 square = 2.5' in 33% view

12

9

VS

DL

2

75

8

16

173

13

1514

1011

13VMPE

MRB

9


Eye wash

EMIL

DANEL

JIM

JAD

OPEN OPEN

DON

Open

OPEN OPEN

SuperCart

CART

CA

RT

CARTCART

CA

RT

CA

RT

CART

CA

RT

Cabinet

Card Mechanical Assembly

OPEN

MICHAEL

ANNE

OPEN

OPEN

ERIC

SIMON

ROMEO

11

ROBERT

RUTH TAM

OPEN

12

TO SHIPPING

Ca

binets

Ca

binets

Dry Erase Board

SuperCart

4

Tools

Wire Rack

CART

Cabinet

9 sq. ft.

Cabinet

9 sq. ft.

Cabinet

9 sq. ft.

Cabinet

9 sq. ft.

Dry Erase

Board

Rack

Rack

Rack

Rack

Rack

Rack

Rack

Rack

Rack

18

SANG

RIC

K

FRED

OP

EN

BO

BB

I

RICK


17 sq. ft.

RA

MIL

Rack

OPEN OPEN OPEN

OPENOPEN

OPENPat Warren

VSYNTH“Depot 4”

VSDL

6"

Fridge

Hot Air Reflow Machine

“Depot 1”

VMULT“Depot

6”

Dry Erase Board

FreqAATS Testing

Cabinet Recycle &Shred BinCabinet

SCC Bench

SCC Bench

QA Out

QA In

CARTCARTCART

CART CART CART CART CART CART

CART CART

QAHold

ShredBin

CA

RT

Cabinet

4'-4 3/16"

CabinetCabinet

10MHz

Wire Rack

Wire RackCabinet

1'-4

"

Rack CART CART

CART CART

CART

CART

CART


17 sq. ft.

Cabinet

CA

RT

CARTFlammabl

e CA

RT

Ste

p

Lad

der

8'-0

"

10'-1

0 5/

8"

HAI - Current State Layout

Travel Distance:9,684 inches807 feet.15 miles

Why a goodlayout is important


Improved flow reduces waste and costs!

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BSSE

3ph, 208V, 20A20 sq. ft.

Thermotron

VM

ULT

VBIM“Depot 5”

VP

EM

VB

IM“D

epot 3”

VWPF“Depot 8”

VMULT TEST“Depot 10”

VIFD2 Test“Depot 12”

VIF

D2

Tes

t“D

epot

11”

VM

ULT

TE

ST

“Dep

ot 9

”

Cabinet

6 sq. ft.






Assy workbench 25

Test workbench 30

Inspection Station 4

At all work benches: 1 ethernet drop 1 120 circuit

OVEN

3 Workstations to

accommodate

Humi touch up

Min. Req.:

ethernet drop,

standard 120

power,

compressed air,

and one needs a

hood connection

Vapor Degreaser 230 V 3KW

Vapor Bath Tank115 V 1.5KW

Office

10 sq. ft.

Phase 2 expansion

Occupancy – 6 max, 2 typical.

10 foot ceiling

SCC BENCH

SCC BENCH

1 square = 2.5' in 33% view

VSDL

MRBSuperCart

CA

RT

CART

CA

RT

CART

CART

CART

CA

RT

CA

RT

Cabinet

Card Mechanical Assembly

PC

C

abin

ets

PC

C

abin

ets

Dry Erase Board

SuperCart

Wire Rack

CART

Cabinet

9 sq. ft.

Cabinet

9 sq. ft.

Dry Erase Board

Rack

Rack

Rack

Rack

Rack

Rack

Rack

Rack

VS

YN

TH

“Dep

ot 4

”

“Depot 1”

VMULT“Depot

6”

Dry Erase Board

FreqAATS Testing

Cabinet

Recycle &Shred BinCabinet

QA Out

QA In

CARTCART CART

CARTCARTCART CARTCARTCART

CARTCART

QAHold

ShredBin

CART

CabinetCabinetCabinet

Wire Rack

Wire RackCabinet

CART

CART

CART

CART

CART

CART

CART

Cab

inet

CART

CART

Flammabl

e

Ste

p La

dder

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

17

Rack


17 sq. ft.


20 sq. ft.

Rack

11

18


17 sq. ft.

Rack

11


Cabinet

9 sq. ft.

12

9

2

75

8

16

1

3

1514

1011

13VMPE

9


4

Tools

Cabinet

9 sq. ft.

Cabinet

9 sq. ft.

10MHz

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

11

'-3 1

/4"

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

1'-0

"

DONOT

BLOCK

ASSYSTAGING

WIP

72 sq. ft.

New Assembly Bench

New QA/QC Bench

ST

AM

P /

PA

RT

MA

RK

New Test Bench

New Rack

CA

RTSTAMP /

PART MARK

CA

RT

KIT

CA

RT

KIT

CART KIT

CART KIT

CART KIT

CA

RT

KIT

CA

RT

KIT

Cable work Cell or Mechanical Assy

Cable work Cell or Mechanical Assy

NE

W

Rack

Rack

Rack Rack Rack

NEW

DONOT

BLOCK

14'-1 1/2"

6'-2

3/1

6"FLOOR STOCK

WIP

Test Rework

Tes

t R

ewor

k

12

NEW

DESK DESK

DE

SK

DE

SK

OVERFLOWSTAGING

&CART

KITTINGWIP

GOWNINGAREA

TEST STAGINGWIP

NE

W

FLOOR STOCKWIP

DONOT

BLOCK

DONOT

BLOCK

DONOT

BLOCK

ELECTRICALAREA

LOCKERS

LOC

KE

RS

SOILEDBIN

CABINETCABINETHANGERS

HA

NG

ER

S

BENCH

HAI – “CCAT” Layout

Travel Distance:5,414 inches451 feet.09 miles


Real Life Cost Reductions

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Original Jan 2010 Jan 2011

Touch Time (VA)

4221 hrs 2448 hrs 1737 hrs

Burden Rate $67 $67 $67

Cost / Chassis

$282,807 $164,016 $116,379

Savings / Chassis

- $118,791 $166,428

Savings / Year(50 chassis)

- $5,939,550 $8,321,400


Sample Project Results: Annual savings from plant consolidations for a real Manex Client

25

.

….and a further $3,390,000 is the next five years!


Proof That “Lean Systems” Work

It does not matter what business you are in, going Lean will drive up the bottom line

1.Medical device manufacturer is growing sales 80% over 2008

2.Accessories manufacturer increased net income more than 20%

3.Contract manufacturer doubled their market share and increased prices by 8%

4.Food company achieves over $400k in sales per employee, best in class

5.Division of aerospace company increased sales by 700% over past 24 months

6.Automotive supplier achieves 38% EBITDA

7.OEM supplier awarded a $7MM contract due to Lean implementation

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Typical Operations Accomplishments

• Improved utilization of personnel by 20%• Improved machine utilization by 40%•Reduced Non Value added operations by 40%•Provided the training for an informed and empowered work force for Continuous Improvement Programs•Typical ROIs on Kaizen events and training is 6:1•“Train the Trainer” format utilized for optimal knowledge transfer

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Contact Information

Bill Browne

Director of Client Services

925.807.5103

925.997.0004

[email protected]

Greg Cho

Senior Consultant

415-601-8225

[email protected]

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