Manufacturing & Costs

Manufacturing & Costs

Case Study

COMPANY

A well-known Company in enamel-on-steel cookware was the first to bring color, tempered glass lids, stay cool stainless steel handles and high quality non-stick em1 to the market. Their customers include quality retailers and mail-orders who require dependable, timely shipments and service. The assembly and warehousing of the Company's cookware line is accomplished in their 40,000 square foot facility. 

PROBLEM ENCOUNTERED

The problem was that the assembly and warehousing costs were increasing and "expedited' orders were causing high labor costs. Finished goods production was not responsive to delivery needs. The market for the Company's cookware was highly seasonal causing variable manpower demands. The Company had little information on assembly production output or projected production needs. They just knew that their costs were out of control!

SILVER FOX ADVISOR INVOLVEMENT

The Silver Fox Advisor was asked by the President to study the problem and to make a recommendation for improvement. In a short time, the Silver Fox Advisor analyzed the problem and set a course of action with a timetable and related costs.

Working with department heads, the inventory plan was revised to be responsive to customer needs. Forecasts were made to recognize seasonality; item bookings were measured against forecasts; and production levels were set to meet overall sales forecasts. Selected time studies were made on the assembly lines with recommended changes to improve the output per hour. Utilization of contract manpower was improved.

CONCLUSIONS

Responsiveness improved. Key factory managers were trained in the new system. The Company was very pleased with the results. Cost improvement was 24.5% within the first six months, significantly increasing the overall profitability.

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