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Consolidating plant work using Lean / Six Sigma

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Viewing 8 posts - 1 through 8 (of 8 total)
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  • #42161

    Adam
    Participant

    Our business (chemical manufacturing) has a directive to reduce fixed operating costs or face losing a certain product in the next few years.  We believe we can consolidate some of the tasks/responsibilities of our wage workers which will in turn reduce the number of bodies required to run/maintain the process.  Work measurement and time studies have never been applied at my site probably because our processes are continuous flow and the tasks are not easily defined in terms of traditional lean methods.  Site management expects a recommendation in less than two months – I am very experienced with six sigma but I believe it would be difficult to apply that rigorous methodology to this problem in the needed time.  Does anyone have advice or experience in this area?

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    #133195

    Gollapudi
    Participant

    Would you be interested in consulting assistance in this regard.. Let me know and I’ll have 1 or 2 consultants from our site work with you on this for 2 months 24X7… If interested reach me at [email protected]

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    #133202

    Jered Horn
    Participant

    Sounds like a really cool project…I bet you get a lot of support from the “wage workers”/”bodies”.  Perhaps if you tell them they won’t get axed if they join in on the effort…
    I’m surprised someone “very experienced with six sigma” and/or lean principles would automatically jump to workforce reduction as the primary solution to an excessive operating cost problem.
    Two months is only prohibitive if you’re working by yourself to come up with a solution/recommendation.  Two months is a LONG time if you put together a team of the right people working on it.

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    #133205

    Parameswaran
    Participant

    I can’t think of a straight up SOLUTION as opportunities vary based on the organization’s maturity.. You need a team which can think of cost reduction opportunities, ESPECIALLY in your type of process Inductries.. Continuous process doesn’t mean the FTY is 100%, “0” Inventories (RM and FG), All measurement systems in Tact, Energy usage at optimum, 0 breakdown, logistics at optimum cost and at the end comes Labor utilization…… We’ve right people, with rich experience from alkalies, steel and other process industries having proved themselves in similar cost reduction cases. Write to me if you need our assistance…

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    #133210

    ramblinwreck13
    Participant

    I find it interesting that you have been challenged to reduced FIXED costs not total costs. If this is the case, labor is a varible cost unless you are obligated to make payments to workers who are layed off. Taking out people won’t help, unless of course your talking about Management, not labor.
    Fixed costs are the purvey of Accoutants, so make sure you have met with your to know what they are including in the Fixed costs catagory.
    If I had a choice in purchasing from a supplier I too would like the costs I pay for purchases to be made up of 100% Variable costs, then if I ordered 1 or 1000 the cost in theory would be the same.
    If this is your challenge then the goal is to switch costs that are fixed today and make them varible in the future. I had such a challenge in my career @ 10 years ago, we needed to go from @ 32% varible to 60+% varible. We achomplished this by applying costs to specific product and changing our cost based accounting systems.
     
    Make sure in your Project Scope and Charter you have firm goals and direction as to what needs to be reduced and why.
     
    Good luck,
    Ramblinwreck13
     

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    #133310

    McD
    Participant

    I’m a little with ramblinwreck on this one, at least start out by having a long heart-to-heart with the accountants.  In a continuous chemical process labor should be almost invisible, unless this is a 40’s style plant.  Find out where the money is, then go after that.
    If, in fact, labor is a big contribution, then unless you are making something that costs a penny a pound, it should be a piece of cake to take out a lot of cost.
    –McD
     

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    #133426

    hari
    Participant

    It is interesting to read various responses here. As a six sigma expert, what if you could change to management focus towards increasing manpower or asset productivity ? Identify improvement opportunities in maintenance areas ( daily management activities).
    Can you think of some alternate product which can be produced in  the existing facility which could be developed by some of the existing resources in your organization? 
    Even if the roles and responsibilities are defined clearly, initiate it once again to verify if these are based on accountbility and responsibility of the position and identify duplicacy of responsibility…….
     
    Hari

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    #133432

    McD
    Participant

    Can you think of some alternate product which can be produced in  the existing facility which could be developed by some of the existing resources in your organization?
    While this may sound good, it is unlikely a solution.  When management is on a cost-cutting binge, it is generally a stop the bleeding sort of exercise.  A new product is a long term, extremely expensive exercise, and not likely to help the immediate problem.  Perhaps if there was another product the company already made, and that product was sold out, then this might make sense.
    Sometimes maintenance is an opportunity area, but one needs to be careful that a short term fix doesn’t turn into a long term problem.
    In a chemical plant, the opportunities will be in raw materials, energy, or capital.  If OP really can save money with manpower reduction then he is running a plant from another century.  Modern chemical plants pretty much run themselves and typically have only the tiniest crew.  The problem is more often finding something for the operators to do, because you don’t want to leave the plant unattended.
    Capital is a big deal in the chemical industry, but not likely to be a short term fix.  That pretty much leaves raw materials and energy, which means OP should look to yeilds.
    In my experience, almost every plant believes “my plant is different” and for some reason they believe that there is some sort of alchemy.  It seems universal that people believe their plant doesn’t follow the rules of chemistry.  And in my experience (and I’ve spent a lot of years in the industry, and worked in a lot of different processes), the plant always adheres to the same chemical engineering principles you learned in college.
    So dust off that old unit ops book, and see where you can make a yeild improvement.
    –McD
     

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