How to Increase Production Efficiencies and Throughput by 500% Without Adding Building Square Footage
The CEO and the President of the company had been working with a Big Box retailer for several years to work out a mattress sales program that was expected to increase annual sales revenue to $60 million. Anticipating an agreement within a few months and as the sales unit projections became clearer, it became obvious to management that there was a need to increase production throughput capacities within the same 80K square foot building, with minimal increase in manufacturing labor costs. As the Manufacturing Specialist, I was directed by the CEO to manage the project and lead a team to develop a production layout.
The multi-million expansion plan was completed on paper, and presented to the investment group, within five months of our initial discussion in March 2010. Production throughput increased by 500%, from 150 units to 750 units/shift, or 2,250 units/day.
Using Lean Six Sigma initiatives, tools and skills, along with my extensive and diverse manufacturing experience, the expansion was designed to be implemented in thirds, each capable of 250 units per shift. The ROI for the expansion was calculated to be two years or less. The new layout would not only serve the anticipated needs of the Big Box program, but allow for future expansion as well.
Upon completion of the expansion, total production capacity was 2250 per day (over three 8-hour shifts). The details included negotiating the purchase and floor placement of state of the art material movement and processing equipment, and all associated collateral. Efficiencies in labor were gained by acquiring and utilizing the most modern automated equipment available, thereby keeping labor costs at the original levels. The industry also recognized that upon completion, this facility was the most efficient mattress factory in the world.
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