LEAN IN THE STEEL INDUSTRY
The Steel industry offers many challenges for the implementation of Lean methodology due to some constraints that are related to the nature of the industry. Large lot production, technical complexity, maintenance issues and a lack of consistency within the processes can present unique challenges that require bespoke solutions.
At LMAC, our consultants have been strategically deploying Lean principles across a broad spectrum of organisations in the Steel industry over many years.
Our experience extends through all parts of the sector including:
AW Fraser produces and supplies continuous cast and centrifugally cast bronze alloys, hollow and solid brass extrusions and precision machined components from a variety of alloys. Their manufacturing plant comprises of a copper alloy foundry, brass extrusion mill and modern CNC machine shop. It’s the combination of these 3 processes under 1 roof that provides their competitive advantage in quality and lead time to their clients across the world.
The GFC combined with severe exchange rate challenges placed an increased focus upon profitability. Their approach was not to rip cost out, but to invest in increasing margins through output increase in a broader range of products.
Initially sceptical of Lean through past experience, the CEO and Senior Leadership Team looked at the evidence of opportunities objectively. Their mandate was clear – the Lean activity must deliver sustainable bottom line results.
At a glance:
$1.5m annual cost benefit through productivity lift
$1m material yield improvement
Increase in production rates of 20%
A well known industry leading investment castings organisation had seen profitability and productivity decline over a number of years.
The new MD, having previous experience of Lean, looked to transform the business by deploying Lean at every level of the organisation, embedding Lean thinking and training the workforce in the use of day to day Lean tools.
Working closely with the MD and using Lean in a strategic way lead to a robust top level plan being developed. The plan was to not only physically transform the flow of the process, but also put into place a cultural transformation program to ensure that Lean would become ‘the way we do business’
Within 2 years profitability improved by 35%, on time delivery improved to over 98% and quality defects decreased significantly.
The site layout was transformed allowing casting to move in sequence by the introduction of heijunka (process levelling) and inventory to be reduced by over 40%. This meant that accurate lead times could be given as part of the sales process and in turn customer trust lead to increased sales.