CASE STUDY: shop floor headcount reduction

CASE STUDY: shop floor headcount reduction

Industry:
Global Automotive Supplier
Company Size:
5,000+
Project Location:
United States
Problem Statement:
Despite several management changes and restructuring programs, our client had pressing profitability issues at their two US manufacturing sites. The distribution warehouses in both locations were identified as low-performing departments and had substantial financial drains with highly negative P&L impact. If a fast turnaround and significant headcount reduction could not be achieved within the next 6 months, the closure of one of the two plants would most likely be unavoidable.
STREAMLINERS’ Approach and Solution
Meeting:
Definition of high level goals and prioritization of first steps
Deep Dive:
Perform gaps and inefficiency analysis in main distribution warehouse to reveal process waste, ratio- and cost cutting potentials
Hypothesis:
Fix broken processes and eliminate operational waste to reduce shop floor headcount by >25%
Project:
1 consultant
12 weeks
Deliverables:

Revamped shift model implemented
Order picking process and material flows redesigned and optimized
Shop floor headcount reduced by 34% (5 months after project start)

Bottom Line Impact:

Shop floor headcount reduced by 34%
Annual savings >$1.1 M

Waste Analysis

Fees vs. Bottom Line Impact