Lean Manufacturing Case Study Prototype Design-Build

Business Challenges Need to reduce prototype vehicle build time and costs, while improving product and documentation quality. No integration between company’s Product Lifecycle Management (PLM) system with their Enterprise Resource Planning (ERP) system. Requiring manual data entry that causes errors, delays, and rework thru downstream processes. Current manufacturing and execution processes operate under a high degree of chaos, causing excessive overtime, expediting costs, and rework. Information systems provided little to no performance feedback on the Prototype Vehicle Build process, thus making project progress reporting difficult.

Approach Established a cross-functional project team, and gained executive sponsorship and empowerment to change. Trained team on Lean Principles and Tools. Conducted a Value Stream Mapping effort for Current State Processes from Preliminary Design Release, thru Work Order Creation/Management, Procurement, Inventory Management, and Manufacturing Execution. Documented both Information Flows and Physical Process Streams with associated TAKT times. Developed Future State Process Map, focused on eliminating the “7 deadly wastes”. Defined Low Technology and High Technology Information System enhancements and integration strategy. Developed ROI and gained executive mgt. approval. Implemented both process changes, and information system enhancements.

Anticipated Results (currently implementing) Future State Process to eliminate 41% of the Current State process steps. Future State Process to reduce the Prototype Build Lead-time by 30%. Generate an annual cost savings of $700,000+ through inventory cost reductions (establish Kan-Ban’s and Purchasing Postponement strategy’s), labor cost reductions, and operational efficiencies. Establish the ability for detailed project reporting capabilities such as Earned Value Management, Project Schedule Performance, Project Cost Performance, etc… Increase the data quality and accuracy of the Bill of Materials for a Prototype Vehicle, via the integration of PLM and ERP information systems. Deploy the use of Job Costing to simplify the cost accounting process, and increase cost accuracy.