Plastics & Resins
SITUATION
Plastic compounds and resins manufacturer experienced a growing number of SKUs, increased inventory costs, and increased manufacturing, warehousing and transportation costs.
DRIVER GOAL
- Reduce customer service lead times by 50%.
- Reduce finished goods inventory by $10 million.
- Reduce annual freight and warehousing costs by $2 million.
RESULT
- Reduced customer service lead time by more than 50%.
- Reduced finished goods inventory by $11 million.
- Reduced annual freight and warehousing costs by $2 million.
Case Study
Reduce Inventory & Improve Cycle Time
Issue
To meet steady customer demand, an international plastic compounds and resins manufacturer experienced a growing number of SKUs, increased inventory costs, and increased manufacturing, warehousing and transportation costs. The organization sought external assistance to streamline the operation and reduce inventories and costs.
Highland Approach
Upon targeting the client’s operational and financial Driver Goals, The Highland Group led an analysis of the operation to rationalize product lines/customers and identify and focus on the disruptions in product flow that were causing wastes/costs to accumulate and cycle time to increase. With a list of key opportunities in hand, the team utilized a variety of Lean Manufacturing tools and methods to systematically address the issues. The implementation of essential program governance structures served to align the entire organization’s performance improvement activities to the high-level goals.
Actions Taken
- Developed and implemented a goal translation and alignment process.
- Created an overall equipment effectiveness program to support smaller batches and reduce set-up time.
- Developed and implemented a System For Managing and created a comprehensive training program for management and supervisory staff.
- Developed and installed a demand-pull replenishment production scheduling process.
- Restructured support organizations in the four plants and headquarters.
- Created and implemented a product/customer rationalization program.
- Designed a program to reduce freight and warehousing costs through the use of direct shipments.
