Time to take a break from discussions about tariffs. It is a topic that comes up every day now matter what so it good take some time away. I will certainly write about tariffs again and discuss strategies to mitigate their impact. Instead of that topic, I would like to share a success made by our team in China.
Work in Harbin, China
Dan Creinin shared results MTG have achieved for a client in China back in January. While we have achieved great results for our clients in China, this situation was unique as this was a fully Chinese endeavor. MTG, through its sister company China Manufacturing Consultants (CMC), runs almost all its Chinese projects through its Chinese staff, typically our clients are North American and European that need help with their suppliers or Chinese manufacturing facilities. Rare is it for a Chinese company selling to the Chinese market to engage our services.
The reason is simple: most Chinese owners think they can make the improvements themselves so do not want to engage our services. However, the results here show the advantages of direct factory floor level transformation.
Our post-project analysis is complete so we can provide more detailed information on what was achieved in cooperation with our client.
The Results
|
Initiatives |
Targets |
Start |
End |
|
Scrap rate for Die-casting |
Improved by 30% |
15.40% |
10.90% |
|
FPY |
Improved from 84% to 95% (improved by 13%) |
53.70% |
96.20% |
|
Final inspection pass rate |
From 95% to 98% |
90.70% |
99.10% |
|
Scrap rate for Aviation line |
Improved by 60% (from 5% to 2%) |
4.30% |
0.90% |
|
Production Efficiency improvement for Aviation line |
The changeover rate improved by 50% |
7.05h |
3.5h |
|
Efficiency improved by 20% (Units Per Person Hour) |
154 RMB |
238 RMB |
|
|
Consumption of consumables (cutting tools) |
Reduced by 40% |
19.20% |
6.40% |
|
Production Efficiency improvement for Die-casting |
improved by 20% |
2,782 |
2,198 |
The results here were achieved over a 6-month period and paid for themselves within two months of implementation. The transformation was achieved without the use of new equipment, new AI systems, or proprietary technology. Those tools are very useful, and we are certain that bringing those on board would provide even more value to our client. However, that is not what they needed. The client needed to update the basics of their manufacturing operations and lay the groundwork to reach the next level. Each step builds on the last and becomes easier with less risk if you move in a deliberate method (a crawl, walk, run method) rather than move fast and break things (all out sprint).
How The Team Did It
|
No. |
Key activities have been done |
|
1 |
Set up PMC role, define the R&R and KPI, set up related process for planning, throughout sales/design/planning/production/shipping |
|
2 |
Set up/ optimize the database for supply chain including BOM/ standard working hours/procurement lead time and supplier info |
|
3 |
Set up /optimize SOP and processes , including PMC management procedure, slow moving inventory management procedure, safety stock management procedure, warehouse management procedure |
|
4 |
Coach the staff with related skills, set up backup process for supply roles especially for warehouse keepers, improve the whole sales review /sales forecast management process and NPI process |
The client is now in a much better position to improve to meet rising demand or tighten their belt if required. These are uncertain times so a company with a strong foundation is in a much better position to ride the highs and lows of the global economy over the next five to ten years.
We have found that companies around the world do not have a strong manufacturing foundation in place even if they are profitable. Now as tariffs (sorry there was no avoiding it) are here to stay in one way, shape, or form, efficient operations are the best method to mitigate risk and remain profitable and out compete your competitors.
What can MTG do to help you improve your operations?
