In 2017, a tier-1 supplier of a leading Tractor company approached Fhyzics for throughput enhancement of their facility in Chennai. This tier-1 supplier is supporting the OEM for seat assemblies for multiple models. Due to the spurt in domestic and international demand, the OEM mandated the tier-1 supplier to ramp up their production capacity at least by 30% during the next 3 months to support the OEMs Sales and Operations Planning (S&OP). Now the question in front of the tier-1 supplier is whether the existing plant has enough capacity, or they should go for capacity addition.
Assess the current capacity, determine the maximum possible capacity, establish the future capacity, analyse the gap, and recommend solution for capacity augmentation.
Fhyzics team of consultants first formed a key stakeholders group composed of Operations Manager, Demand Planner, Master Scheduler, Sales Manager and Process Improvement Lead. Subsequently, our team embarked on elicitation, data collection and performed the initial analysis.
1. How many active seat assembly models are produced during the last one year?
2. The Bill of Materials of all those models. This is to determine the common components across the models.
3. What is the current manufacturing strategy? MTS, MTO, ATO or CTO.
4. What is the current inventory level across the components?
5. Total number of workstations are identified, and mapping was done with respect to the models.
6. The extent of cross training among the operators.
7. The number of suppliers, supplier lead time and supplier performance.
8. Based on their existing time-study reports and after revalidating those data, we established the standard time required for each model and availability of these workstations. This helped us to determine the maximum capacity of the facility.
9. Now, it is easy to say how many units of each models can be produced. We developed an Excel Model that gives this result for any combination of models.
10. We analysed how the facility was performing for the given combination of models during the past one year.
11. Though we worked out a theoretical maximum, after adjusting the various factors we were able to certainly say that the facility can support 2/3rd of the 30% ramp up requirement and for the rest 1/3rd additional investment required in terms of machineries for the punching WorkCentre.
Our recommendation is a mix of leveraging the existing capacity and few investments in the bottleneck areas. The company had a clear roadmap on how to ramp up by 30% within the next 3 months.