Our clients have achieved amazing results through their individual, lean journeys. Whether they chose to focus on team based problem solving, kaizen or six sigma, the results typically exceed the goals. Following, is just one example where the results from a single kaizen event to reduce scrap, created a hard dollar savings opportunity of $960,000!
This case is from a client that completed a Kaizen T3 (train the trainer) with us. During the process, they trained four internal kaizen facilitators to carry on their lean journey. Each event marks one of the major milestones in the KT3 process where expertise and skills are transferred to the trainees while they are coached personally by Value Stream Solutions to follow the kaizen process and achieve results. This manufacturer is a global, high volume organization producing commodity type products. The competition is fierce, costs are rising and for their Canadian operations, effects of a strong dollar can be widely felt.
This particular event was focused on scrap reduction. Although in the grand scheme of things, an annual savings of $60,000 may not seem like a lot in a billion dollar business but when you consider the changes made to this one line cost a few hundred dollars and can be translated to 15 other lines immediately, you’re now talking about a $960,000 return of real bottom line dollars! Another way to look at it is that this one events results pays for the entire train the trainer program for four internal facilitators and has an ROI potential of 15:1!
Results:
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Before:
Total scrap: 56,324 lbs
Total Production : 1,802,106 lbs
% scrap: 3.13%
$/1000 for scrap: $1.07/1000
Spoilage Cost: $87,134/year
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After (Estimate of 16 hours):
Scrap: 67 lbs from camera
14 lbs from brush-off reintegrated
Total Production : 1,802,106 lbs
% scrap: 1.41%
$/1000 for scrap: $0.328/1000
Spoilage Cost: $26,710/year
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Annual savings estimate for line 35 only:
Scrap savings $60,424
Scrap reduction: 55%
To see the long term results and sustainability, view the trend chart ... Click Here!.