Client Issue: The client was a leading protein production and packaging manufacturer who used heavily manual operations for trimming and styling functions. There were minimal metrics in place to track labor utilization and no usable crewing standards in place for the supervisor to know how many people were supposed to be on the line. Labor was determined by the supervisors estimate for the product run and who showed up that day to work. The client needed help establishing Industrial Engineering standards for labor requirements and performance management tools to understand labor utilization against those standards.
Overall Approach: We used a multi-step process to optimize labor usage and efficiency. The first step was to perform work studies to determine the work required to execute production. We started with the SKU's that make up 80% of the volume sold and worked from there. We applied Industrial Engineering approaches of time studies and developed completion times based on the 75th percentile could complete a task. Based on the steps identified and times required, we developed standard work and trained supervisors on the new established standards. The standards were also used to develop crewing guides that supervisors could use to determine minimum crewing required to execute a production run based on machine throughput. Finally, we established labor utilization and OEE for each production line to help plant leaders understand where there were opportunities for further improvement.
Results: Through this analysis, we discovered that the plant was about 32% over-crewed and that efficiencies varied wildly from one production run to the next. Once target efficiencies were established and being reported out on a regular basis, performance improved dramatically and the use of temps was reduced by about 68%. By the end of the 6-week engagement, operating costs had already improved by a project 17% annually with significant room for further reductions yet remaining. Finally, we developed a capital plan that had 68% return on investment and would result in additional 46% labor savings.