Client Business Need
The management team at La Tortilla Factory recognized that in order to remain a leader in their industry, they needed to continually improve operational and financial performance. They were specifically interested in improving their operations by increasing throughput. The company also had excessive waste as part of their value stream, leading to high inventory levels. This led management to search for an additional warehouse location to house finished goods.
Manex used a proven, tailored approach designed to increase throughput and increase warehouse space availability. An adaptation of the Just-In-Time (JIT) philosophy was implemented, and the facility layout was optimized to adapt to the new production and warehousing philosophy.
- Project activities included:
- Identifying high impact opportunities using a VSM
- Running a ‘Make to Order’ simulation
- Improving the line setup/changeover process using a Kaizen event
- Eliminating the need for an additional warehousing location through the ‘Make to Order’ Kaizen event
- Developing KPIs to sustain and measure improvement
- Providing a Benchmarking report to assess competitiveness
As a result of these continuous improvement activities, La Tortilla Factory dramatically reduced the setup/changeover time, increased inventory turns, implemented a new scheduling system, eliminated the need for an additional warehouse, and increased throughput, while further satisfying their customers. With improved flow and trained production team members, La Tortilla Factory is now positioned to not only sustain, but to exceed the projected growth.
Specific results include:
- Reduction of changeover time by 91% (44 minutes to 4 minutes). On an annual basis, approximately 80,000 more minutes were available for production, which is equivalent to additional capacity of $2.6 million per year
- 40% increase in total yearly capacity due to the new scheduling system ($40M to $56M, which includes $2.6M mentioned above)
- Reduction in overtime dollars of approximately $450K and other labor savings of approximately $350K per year
- Estimated saving of $1M annually by eliminating the need for an additional warehouse location
- Enhanced material and information flow, resulting in better inventory management and reduced paperwork