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Lean and Agile Operations - Case study

Magna Manufacturing Company (MMC) is a manufacturing company based in the Midlands. Its core skills include precision machining, welding and assembly. MMC is a first tier supplier to the automotive industry, it supplies complete assemblies for the OEMs and components for the Aftermarket sector. The company has been in business for 40 years and currently employ 200 people. Since 2010 the company have lost 2 major orders to overseas competitors. 20 % of their direct workers have been made compulsory redundant and there may be a loss of a further 25% of workers in the next 12 months if they continue as they are.

Lean and Agile Operations

Introduction

MMC’s manufacturing facility is currently producing to mass production principles.  The machines have a functional layout (figure 1) and produce components in large batches.

The company have recently employed you as their Manufacturing Director to turn around their manufacturing performance; as you have extensive knowledge and experience of Lean Manufacturing principles.

An initial analysis of the company production data has identified a ‘runner’ customer order to supply a car set, consisting of two assemblies AR (RHS assembly) and AL (LHS assembly), on a regular basis. Figure 2 shows the simplified product structure.

Analyse the following data and prepare a report to be presented to the Board of Directors, assessing the current state of the 

manufacturing system and demonstrating a vision for the future. 

Figure 2                     Simplified product structure

• A car set consists of one LHS assembly, AL, and one RHS assembly, AR.

• At component level the carrier (CA) is a common product to both AL and AR assemblies

• The covers have a common process flow, although changeovers are required between product types where stated.

• MMC’s manufacturing process for the cover starts with pressing. Because of the short cycle time and high set up times the batch size is high, 10000. The product is placed in stillages and transferred in a batch size of 1000 to the welding bays and then on to the manual assembly after welding.
• The output from the press shop should be of equal proportions of all products. However, currently this is not achieved as the output ratio depends on the set up of the presses. The press is a shared resource.
• After weld and manual assembly is complete, the covers are loaded to special jigs (15 per jig) and moved to goods out to be sent to a painting sub-contractor.  The normal quantity despatched is 600 (parts are not required to be common) and the despatch timing is sporadic, depending on when the stock is available to go out. The turn around time is quoted as 2 days, however the process time is 15 seconds per product.
• After painting the RHS cover (COR) only has some external components assembled before moving to the final assembly stage.
• MMC’s manufacturing process for the carrier is predominantly machining. The casting arrives from the supplier and is rough milled. Datums are then accurately machined onto the casting and are used to locate the carrier on the CNC machine.  The carrier is machined on an automatic CNC machining centre and is then transferred manually to a twin spindle CNC drilling machine. Two carriers are loaded into the fixture and machined together. The carrier proceeds to the linishing machine for finish machining then passes to a sub assembly area before moving to the final assembly.
• Finally, the carrier and the cover are assembled together to produce the final assembly, AL or AR.
• The assemblies are then loaded to the part number designated containers. (note: the customer will return the whole delivery if part number integrity is not 100%)
• All moves within the same section are done manually, using trolleys.

• All moves between sections are done by fork lift truck (a very scarce shared resource!)

• A schematic layout of the shop floor is given in Figure 1.  Finished assemblies are then staged and shipped to the customer’s site daily.

• Lanchester Steels Ltd supply’s metal blanks stock to MMC weekly, on Mondays.

• Coventry casting House supplies castings every two weeks on Thursdays.

Work Time

¢  20 working days in a month

¢  Operating a three shift system in all production operations

¢  6.00am – 2.00pm, 2.00pm – 10.00pm, 10:00pm – 6:00am

¢  30 mins lunch and two 15 min breaks

Production Control

¢  This is the responsibility of the Logistics department which receives 90/60/30 forecasts from the customer.  Logistics are responsible for downloading this information onto the MRP system.

¢  A 4-week forecast is issued by logistics to Lanchester Steels and Coventry Castings via MRP.

¢  Logistics ensure all materials are available and secures by weekly faxed order release to the suppliers.

¢  MMC generates weekly departmental requirements via MRP.

¢  A daily firm order is received from the customer

¢  Weekly requirements are customer order based as well as logistics taking into account WIP and finished goods inventory numbers, anticipated scrap and process downtime.

¢  Logistics issue weekly launch and build schedules to the stores, press shop, welding area, machining area, and assembly area.

¢  Logistics issue a daily shipping plan to the Despatch Department.

Process Data -  Covers (COL and COR)

Operation 1 – Press (not dedicated to product family)

¢  Cycle time: 2 seconds

¢  Batch size 10000

¢  Changeover time: 120mins

¢  Availability: 95%

¢  EPE 4 weeks

¢  Quality pass rate 99%

¢  Observed inventory:

·               5 days Sheet metal

·               After pressing; 1452 COL

2564 COR

Operation 2 – Manual Weld

¢  2 operators dedicated to manual process

¢  Batch size 100

¢  Cycle time: 233 seconds

¢  Changeover time: 20 mins

¢  Availability: 95%

¢  Quality pass rate 99%

¢  Observed inventory:

·         404 COL

·         495 COR

Operation 3 – manual assembly

¢  2 operators dedicated to manual process

¢  Cycle Time: 177 seconds

¢  Batch size 100

¢  Changeover time: 15 minutes

¢  Availability: 98%

¢  Quality pass rate 90%

¢  Load cover to paint fixture 10s each (15 per jig)

¢  Observed inventory (post assembly):

·         506 COL

·         785 COR

Observed inventory waiting goods out to painting

·         500 COL

·         300 COR

Operation 5 – Painting (Sub Contracted)

¢  Turn around time 2 days

¢  Painting 15 seconds per part

¢  Batchsize 600

¢  Availability: 90%

¢  Quality pass rate 95%

¢  Observed inventory (goods in waiting transport)

                        400 COL

                        300 COR

¢  Observed inventory waiting assembly

                        200 COR

Operation 6 – External Component Assembly (COR only)

¢  1 Operator dedicated to manual operation

¢  Cycle time: 240 seconds

¢  Changeover time: none

¢  Availability: 100

¢  Quality pass rate 95%

¢  Observed inventory:

·         351 COL (delivered from paint)

·         492 COR

Production Data -  Carriers (CA)

Operation 1 – rough milling

¢  One operator dedicated to manual process

¢  Cycle time: 132 seconds

¢  Changeover time: 20 mins

¢  Availability: 95%

¢  Quality pass rate 98%

¢  Observed inventory:

·               10 days castings before rough machine

·               After rough machine

·               776 CA

Operation 2 – machine datums

¢  Operator dedicated to manual operation

¢  Cycle time: 153 seconds

¢  Changeover time: 10 mins

¢  Availability: 98%

¢  Quality pass rate 98%

¢  Observed inventory:

454 CA

Operation 3 – CNC machine

¢  Automated cycle

¢  Unload & load (combined) 15s

¢  Auto machining cycle 263 seconds

¢  Changeover time: 30mins

¢  Availability: 98%

¢  Quality pass rate 92%

¢  Observed inventory:

·         592 CA

Operation 4 – CNC Twin Spindle drilling

¢  Automated cycle

¢  Unload & load (combined) 15s per carrier

¢  2 carriers per fixture

¢  Auto machining cycle (for two carriers) 258 seconds

¢  Changeover time: 30mins

¢  Availability: 98%

¢  Quality pass rate 92%

¢  Observed inventory:

·         1021 CA

Operation 5 - Linish

¢  Operator dedicated to manual operation

¢  Cycle time: 90 seconds

¢  Changeover time: 120 mins

¢  Availability: 95%

¢  Quality pass rate 97%

¢  Observed inventory:

·         720 CA

Operation 6 – Sub Assembly

¢  1 operator dedicated to manual operation

¢  Cycle time: 63 seconds

¢  Changeover time: none

¢  Availability: 100%

¢  Quality pass rate 99%

¢  Observed inventory:

·         734 CA

Final Assembly (carrier and cover assembled together)

¢  2 operators dedicated to manual operation

¢  Cycle time: 196 seconds

¢  Changeover time: none

¢  Availability: 100%

¢  Quality pass rate 99%

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