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$400 MM Commercial Electric Motor Plant

April 20, 2017

Clients + Results

  • $400 MM Commercial Electric Motor Plant
  • $40B Global Electronics Co.
  • $1 B Office and Consumer Products Business
  • Wire Harness B.U.
  • Plastic Bottle B.U.
  • Rolling Mill Division
  • Japanese Automotive
  • Toyota North American Service Parts
  • Large Mexican Tier 1
  • General Aviation Manufacturer
  • $60 Million Forging Co.
  • Leading European Global Automobile Parts Supplier
  • Testimonials
$400 MM Commercial Electric Motor Plant
Business Case
  • Poor performing plant acquired from GE (6 Sigma), could not ramp up for new products/growing demand.
  • Poor on-time delivery to customers only 68% and over 4,000 customer PPM causing serious business risk.
  • Costs out of control (inventory and scrap double target; overtime 4X target; premium freight 5X target; labor productivity 41% below target.
Actions
  • Improved Equipment maintenance to add capacity and reliability.
  • Created “model line” for key products (40% of volume) with level pull based on customer demand, kanban, visual management, standardized work and rapid problem solving.
  • Transformed production planning process and shop-floor control to support pull system.
Results
MetricBeforeAfterChange
On-Time Delivery68%95%+27 ppt (+40%)
Customer PPM4,0361,400-2,636 (-65%)
Labor Productivity (units/hour)15.1823.52+8.34 (+55%)
Overtime % of Hours29.7%8%-21.7 ppt (-73%)
Inventory Carrying Costs$420k$210k-$210k (-50%)
Scrap$144k$72k-$72k (-50%)
Premium Transportation$92.8k$18.5k-$74.2k (-80%)
Summary
  • Plant-wide capacity increased 38% in 10 months with minimal investment.
  • Regained customer confidence and continued growth.
  • Generated $1.3 operating cost reduction & $2.8 MM cash flow
  • Since 2008 Corporation has grown from $1.4 billion additional to $4 billion revenue.

$40B Global Electronics Co.

April 20, 2017

Clients + Results

  • $400 MM Commercial Electric Motor Plant
  • $40B Global Electronics Co.
  • $1 B Office and Consumer Products Business
  • Wire Harness B.U.
  • Plastic Bottle B.U.
  • Rolling Mill Division
  • Japanese Automotive
  • Toyota North American Service Parts
  • Large Mexican Tier 1
  • General Aviation Manufacturer
  • $60 Million Forging Co.
  • Leading European Global Automobile Parts Supplier
  • Testimonials
$40B Global Electronics Co.
Business Case

New competitive technology products eroding margins
High costs and long lead-times resulting in market share losses

Actions
Flexible Lean manufacturing system design and implementation
Lean JIT logistics network design & implementation
Results
MetricBeforeAfter
Replenishment lead-time25 days7 days (-72%)
Inventory$80 M$40 M (-50%)
On-time delivery83%94% (+13%)
Demand fluctuation1.0 (Index)0.6 (-40%)
Summary

$100 million cash freed up in two years
Used to acquire one of their largest competitors
Won global parent company competition for best business unit world-wide

$1 B Office and Consumer Products Business

April 20, 2017

Clients + Results

  • $400 MM Commercial Electric Motor Plant
  • $40B Global Electronics Co.
  • $1 B Office and Consumer Products Business
  • Wire Harness B.U.
  • Plastic Bottle B.U.
  • Rolling Mill Division
  • Japanese Automotive
  • Toyota North American Service Parts
  • Large Mexican Tier 1
  • General Aviation Manufacturer
  • $60 Million Forging Co.
  • Leading European Global Automobile Parts Supplier
  • Testimonials
$1 B Office and Consumer Products Business
Business Case
  • Declining market, low-cost competition and unsuccessful innovation causing multi-year revenue declines
  • Four-year tools and results-focused Lean and Six Sigma cost savings preserved profits.
  • Insufficient process focus and root cause problem solving caused performance decline in 5th year
Actions
  • Guided implementation of Lean System Thinking Leadership to understand needed process improvements to deliver targeted results—both short-term and strategic.
  • Expanded improvement efforts to entire supply chain, including JIT logistics, supplier development and customer collaboration. Refocused mid-management on cross-functional process improvement for lasting results.
  • Facilitated management decision-making to transform innovation and demand creation as a system to restore growth.
Results
MetricBeforeAfterImprovement
Year 1: Lean Leadership Introduced
Inventory Turns9.912+2/1 (+21%)
Cost Out-$16 MM
Year 2 and Beyond: Mid-Range Plan and Hishin Kanri Deployed
Inventory Turns1215+3 (+25%)
Cost of Goods Sold(-10%)
Freight & Distribution Cost(-20%)
Innovation Transformation will Yield 1st revenue increase in 7 years!
Summary
  • Key customer relations strengthened—won “Supplier of the Year” award from largest customer.
  • Transformed Innovation process generation over $100 million of new sales annually.
  • A culture of Lean Leaders—feeder of expertise to corporation.

Wire Harness B.U.

April 20, 2017

Clients + Results

  • $400 MM Commercial Electric Motor Plant
  • $40B Global Electronics Co.
  • $1 B Office and Consumer Products Business
  • Wire Harness B.U.
  • Plastic Bottle B.U.
  • Rolling Mill Division
  • Japanese Automotive
  • Toyota North American Service Parts
  • Large Mexican Tier 1
  • General Aviation Manufacturer
  • $60 Million Forging Co.
  • Leading European Global Automobile Parts Supplier
  • Testimonials
Wire Harness Business Unit of Global Co. (Mexico & U.S.)
Business Case

Consolidate acquisition of large U.S. competitor
Free up capital and space for expansion in Mexico
Reduce costs to meet customer cost down requirements

Actions

Led TPS implementation in 18 Mexican and 1 U.S. plants

Results
MetricBeforeAfter
Inventory days (entire company)3918 (-49%)
Assemblies/man hour (typical example)5.57.3 (+33%)
Internal PPM (typical example)268170 (-37%)
Summary

Liberated >$150 million inventory cash, supported growth
Acquired division of European competitor in Mexico
Won 2001 President’s Award – best of 26 business units worldwide

Plastic Bottle B.U.

April 20, 2017

Clients + Results

  • $400 MM Commercial Electric Motor Plant
  • $40B Global Electronics Co.
  • $1 B Office and Consumer Products Business
  • Wire Harness B.U.
  • Plastic Bottle B.U.
  • Rolling Mill Division
  • Japanese Automotive
  • Toyota North American Service Parts
  • Large Mexican Tier 1
  • General Aviation Manufacturer
  • $60 Million Forging Co.
  • Leading European Global Automobile Parts Supplier
  • Testimonials
Plastic Bottle Closures B.U. of Global Co. (Mexico & U.S.)
Business Case

Capital-intensive compression molding business needs cash and lower costs for growth.
Expensive quality problem eroding market share.

Actions

Led TPS implementation in the business unit’s 4 plants in U.S. & Mexico

Results
BeforeMetricAfter
12.8%Scrap9.0% (-29%)
268Internal PPM170 (-37%)
0.020Customer Complaint Rate0.011 (-45%)
2089Output per employee2723 (+30%)
Summary

Claims expense dropped 71%
Grew business 10% with the same headcount & capital equipment
Won 2002 President’s Award – best of 26 business units worldwide

Rolling Mill Division

April 20, 2017

Clients + Results

  • $400 MM Commercial Electric Motor Plant
  • $40B Global Electronics Co.
  • $1 B Office and Consumer Products Business
  • Wire Harness B.U.
  • Plastic Bottle B.U.
  • Rolling Mill Division
  • Japanese Automotive
  • Toyota North American Service Parts
  • Large Mexican Tier 1
  • General Aviation Manufacturer
  • $60 Million Forging Co.
  • Leading European Global Automobile Parts Supplier
  • Testimonials
$200M Rolling Mill Division of Global Company (U.S.)
Business Case

ROC = 2% vs. 15% target. CEO threatened to close division for sub par profitability
No Logistics Department or expertise; only one traffic specialist in each of 2 plants

Actions

Supported top management in development of logistics manager
Coached management to implement Lean logistics integrated with Lean manufacturing

Results
BeforeMetricAfter
$57MLogistics Cost$51M (-10%)
6 weeksOrder-to-shipment lead-time2 days (-95%)
2%Return on Capital16% (+700%)
95%%of orders changed<5% (-95%) 0.6 (-40%)
1.0Demand fluctuation (index)
Summary

Logistics manager has been able to continue on his own and has become a company-wide leader of logistics improvements

Japanese Automotive

April 20, 2017

Clients + Results

  • $400 MM Commercial Electric Motor Plant
  • $40B Global Electronics Co.
  • $1 B Office and Consumer Products Business
  • Wire Harness B.U.
  • Plastic Bottle B.U.
  • Rolling Mill Division
  • Japanese Automotive
  • Toyota North American Service Parts
  • Large Mexican Tier 1
  • General Aviation Manufacturer
  • $60 Million Forging Co.
  • Leading European Global Automobile Parts Supplier
  • Testimonials
Leading Supplier of Automotive Safety Components
Business Case

Supplier to automotive OEM’s in era of price deflation, causing eroding margins
Low cost overseas sourcing was a growing threat to market share

Actions

Connect processes, reduce changeover time, reduce batch
Shrink lead time to increase operational flexibility

Results
MetricBeforeAfterChange
Labor efficiency average40% 74%+ 34 ppt (+85%)
Manufacturing lead-time12 weeks 4 weeks- 8 weeks (-67%)
Capital cost100% 82%- 18 ppt (-18%)
Summary

Sales have doubled during this 5-year engagement with:

– Limited headcount growth
– Reduced capital requirements

Toyota North American Service Parts

April 20, 2017

Clients + Results

  • $400 MM Commercial Electric Motor Plant
  • $40B Global Electronics Co.
  • $1 B Office and Consumer Products Business
  • Wire Harness B.U.
  • Plastic Bottle B.U.
  • Rolling Mill Division
  • Japanese Automotive
  • Toyota North American Service Parts
  • Large Mexican Tier 1
  • General Aviation Manufacturer
  • $60 Million Forging Co.
  • Leading European Global Automobile Parts Supplier
  • Testimonials
Toyota North American Service Parts and Accesories Supply Chain Transformation
Business Case

Toyota: 0 –> 1.2 M vehicle North American  production  in 1986 – 1992 (<6 years).  No infrastructure to support North American procurement, warehousing & logistics and supply globally.

Actions

Established North American Parts Logistics Division (’93)
Developed organization, systems, facilities, supply chain

Results
MetricToyota BeforeToyota AfterReference: Industry Average
Supplier on-time delivery87% 95% < 20%
Daily order/delivery 0%70%
Supply Chain 5.2 < 2.4 months 6 months
Warehouse Labor Productivity (order lines shipped per employee per year)30,000 46,000
Service rate to dealers 98%< 98+% 94 % - 97 %
Average supply lead-time 96 hours 13 hours20 - 96 hours
Summary

Benchmark supply chain creates competitive advantage in customer satisfaction and efficiency Highest Net Income % in auto industry

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