Did you know one of the leading medical equipment manufacturing organisation was able to reduce $1.7 million by implementing a lean solution? In this article, we will walk into Improve Savings and Profits through Lean Management. 

The manufacturing facility of the organisation produced electro-mechanical medical devices. The plant was vertically integrated. The organisation produced its own circuit board assemblies, cable assemblies, and the box-build final assembly and test. The process was driven by an ERP system with various level bills of the raw material, shop order travelers, pick lists, lot sizes, and stock room transactions.

But the organisation was facing a huge costing issue. The manufacturing costs of the products were too high, the lead times of the final products were too long, and they had a lot of money tied up in inventory.

Now to balance it, the management team along with the organisation had set the goals of inventory reduction. In the beginning, the efforts were focused on the ERP planning process. The bills of the raw materials were challenged and compressed. Along with that, the production lead times, and lot sizes were cut down. Parallelly similar efforts had begun within the various production departments.

Continuous Improvement through Lean Manufacturing

Also, new manufacturing techniques were introduced to the cable assembly, wire harness departments, and final assembly. The Kanban controls were established by implementing Kanban tools in both, within the subassembly areas as well as in the final assembly areas. This helped the organisation eliminate a lot of non-value-adding reporting steps and stock room transactions. Various shifts were introduced and balanced to allow the product to continuously flow across the entire process, and not just the bottleneck operations. The consecutive examination was initiated, followed by guaranteed steps.

After successfully implementing the lean tools, in less than six months, the organisation was able to reduce inventory by $1.7 million, cut the lead time from 8 weeks to 5 days, cut the first pass failure by 60%, improved on-time delivery by 100% and much more.

Hence, as you can see, implementing simple lean management tools in your organisation can help you improve your savings and profits. So, have you started to implement lean tools in your organisation?