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Lean Manufacturing Transformation Case Study – MacNaught
Read this case study to learn how MacNaught a manufacturer complex engineered lubrication products for global markets achieved a Lean Manufacturing Transformation
With a small local Australian market, Macnaught relies on exports for a large portion of their business, but productivity levels and production agility were creating problematic lead times. Macnaught, a Sydney-based manufacturer of hose reels, lubrication equipment and industrial flow meters, knew that Lean manufacturing was the answer.
“Initially, we looked to improving productivity,” said Macnaught CEO, Robert Hill. “With a small local market, a single export order can represent the equivalent of a month’s worth of local orders. What we didn’t have was the flexibility to respond quickly enough to those export orders and consequently our lead times would often be in the order of 10 – 12 weeks.”
“The flow on effect was variable demands on labour and inventory was difficult to forecast; we were running out of parts on a regular basis and working a lot of overtime.”
TXM worked with Macnaught to convert production of one product line from a batch process to a single piece work flow. Prior to this, the production line was at full capacity to satisfy Australian orders with four full time staff. To accommodate an export order, they needed to work overtime for several weeks, causing long delays and extending lead times for local customers. Since the Lean implementation, the Australian orders now represent about two days’ work, while exports can be managed in the remaining three. Now, instead of a 12 week lead time, most of these orders can be turned around in several days.
“We quickly realised with these results, that we needed to look at Lean manufacturing across the whole business,” said Steve Gavin, operations director, Macnaught. “Our core goal was lead time reduction – delivery at the right time, at the lowest possible cost, with no defects.”
As the first step in a Lean Manufacturing Transformation at MacNaught, TXM conducted a complete business health check, assessing opportunities for improvement across all facets of the company including customer service, administration and production. Armed with a set of goals to reduce inventory, product development cycles and customer service, Macnaught set about implementing 5S, Kanban, and other Lean tools under TXM guidance. TXM provided training to staff to create 5S champions to work with teams around the organisation to improve business processes and productivity. TXM 5S is an important foundation of any Lean Manufacturing Transformation because it is the first step towards standardisation in the workplace
Productivity and capacity across all product lines has improved and inventory of raw material and finished goods is significantly lowered. Staff are now engaged in all facets of the business and participating in recognising problems and resolving them. Re-works have also been significantly reduced. Rather than fixing supplier problems onsite and wasting time and resources, the company resolves the problem at the root cause.
“The most startling result for us was seen in the reduction of lead times. Before, export customers would wait as long as 12 weeks for their order, but now we can deliver many within a week,” said Mr Hill. “The other important thing we have learned is that Lean, 5S and continuous improvement are processes that never end. The more you improve, the more areas you find that can be improved upon. With TXM’s guidance, we continue to improve our business internally and service our customers more easily.”