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| Case Studies
#1 Case Study
Client
Metalwest operates five steel service centers in the Western, Mountain, and Central regions of the United States which specialize in the processing and distribution of flat-rolled metal products, while also offering a broad range of other metal products to serve their customers’ needs.
Situation
Metalwest’s top leaders decided to conduct an assessment using the Baldrige Criteria for Performance Excellence to identify the company’s strengths as well as opportunities for improvement. While there were a number of opportunities, it was clear that the single largest area for improvement was to reduce customer returns by over 60 percent.
Challenge
Metalwest wanted to take its performance to the next level, but needed help to accomplish it.
Solution
Metalwest partnered with Glenn Bodinson and his associates at BaldrigeCoach.com to facilitate a project of process improvement that would drive value. Process owners were selected and teams were used to assure that the best methods were developed and adopted at all locations. Measurement systems were aligned with key customer needs. Waste was reduced and employee satisfaction improved. This project was completed in less than a year and the ROI was over 10 to 1.
Results
• Customer returns declined more than 60%, saving over $2 million per year
• Customer satisfaction improved over 50%
• On-time performance improved to over 98%
• Productivity improved over 25%
• Business grew 20 – 25% per year despite a down economy
#2 Case Study
Client
The client manufactures specialty products for business and is expanding to sell similar products through large retail chain stores. The company’s name is not revealed here at their request. (A phone conversation with one of their executives can be arranged for serious prospects.)
Situation
The manufacturer produces products using weekly batch schedules for high-volume stock products. Lower demand products are produced in monthly batches. The products are then warehoused until customers order them. The strategy to sell through retail stores like Auto Zone and Pep Boys has driven sales up. The company has added a second shift to increase manufacturing capacity and is running two twelve-hour shifts on three days per week in manufacturing. The warehouse is working five days a week and running out of space.
Challenge
As the company grew in sales, the manufacturing and warehouse space became more and more crowded. It was impossible to move material efficiently. The company had invested over $100,000 to design a new warehouse that would provide space to store more finished goods and ship the larger inventory required to meet increasing sales demands. The old warehouse space would be freed up for manufacturing. While building and filling up a new warehouse would solve the space need, it would also create a huge financial burden.
Solution
BaldrigeCoach.com was shown the plans for a new $7 million warehouse expansion. Knowing that lean thinking provided a much more profitable strategy, Mr. Bodinson proposed instead of spending cash to build and store more finished goods, which would be another form of waste, that they implement the principles of lean management: eliminating waste by reducing changeover times, reducing batch sizes, increasing the scheduling frequency, and filling demand by pulling from an internal supermarket. We developed a lean management plan. The result: the discovery of temporary expansion space to use during the conversion to a lean enterprise.
Results
• Rather than building a $7 million facility with an annual cost of $425,000,
a very satisfactory facility has been rented at an annual cost of $125,000 -
the net savings is $300,000 per year
• By renting rather than building, a $7 million increase to the asset base was
avoided
• By implementing the lean enterprise principles, a considerable cash outlay
was avoided
• The resulting productivity measure in Sales per Employee was significantly
higher than competitors
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