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SUMMARY OF OPERATIONS IMPROVEMENTS September 2005

IRON & ALUMINUM FOUNDRY Automotive, Agricultural & Industrial Parts & Assemblies. SUMMARY OF OPERATIONS IMPROVEMENTS September 2005. FOREWARD. This document outlines the financial benefits of operations improvements made across 5 iron & aluminum foundries over a 6 month period in 2005.

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SUMMARY OF OPERATIONS IMPROVEMENTS September 2005

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  1. IRON & ALUMINUM FOUNDRY Automotive, Agricultural & Industrial Parts & Assemblies SUMMARY OF OPERATIONS IMPROVEMENTS September 2005

  2. FOREWARD This document outlines the financial benefits of operations improvements made across 5 iron & aluminum foundries over a 6 month period in 2005. The scope of each operations improvement was defined by the client. The financial benefits were achieved as a direct result of improvements in productivity, reductions in inventory, increases in labor efficiency, reductions in headcount, better quality products & faster throughput.

  3. CONTENTS

  4. SUMMARY OF IMPROVEMENTS

  5. PLANT 1 Implement a Lean methodology in the grinding room to reduce costs & improve productivity

  6. PLANT 1 GRINDING SHOP BEFORE

  7. PLANT 1 GRINDING SHOP AFTER

  8. IMPROVEMENTS PRODUCTIVITY

  9. PLANT 2 Reduce grinding/shipping labor & reduce WIP/finished goods inventory

  10. PLANT 2 ALLEY WIP REDUCTION BEFORE AFTER

  11. IMPROVEMENTS WIP

  12. PLANT 3 Coordinate QJS molding improvement project for improved output (molds/hr) and labor savings

  13. Key P=Productivity Increase DR= Defect Reduction QJS MOLDING LINE SCHEMATICS Flask Station P=1% Flask Station P=10% DR=1% P=14% DR=1% Cope Drag Tip Over P=5% Close Out P=1% DR=1% Cart Cart P=1% Lift Lift Pouring & Shakeout

  14. QJS MOLDING LINE

  15. IMPROVEMENTS PRODUCTIVITY

  16. PLANT 3 Improve labor productivity, material handling logistics & scheduling in core making department to improve core machine utilization & percent uptime yielding more core blows per hour, cores per hour

  17. Cauffiel too close to oven, no surge area Dog Bone Cauffiel Redford Redford Redford Redford Mezzanine WIP WIP WIP WIP WIP #1 CORE ROOM - CURRENT LAYOUT & FLOW Bulk storage of gasses & mud WIP Core Assembly Dipping vats topped up by hand Severe congestion WIP WIP WIP Extremely short loading & stacking area Mud & Gas Delivery Route Obsolete shell core machines Shell Core Core Assembly Shell Core

  18. INEFFICIENCIES - SCHEDULING Example: Part # - X62008367, Quantity = 100 Queue Queue Laempe Corefit Process Queue Redford Corefit (1454 mins) Cauffiel (548 mins) Typical Schedule Redford (1370 mins) T=1868 mins Potential Time Saving, Δt = - 498 mins Corefit (1454 mins) Suggested Schedule Cauffiel (548 mins) Redford (1370 mins) T=1370 mins

  19. INEFFICIENCIES - EXAMPLES OF WASTE Overproduction Scrap IdleMachinery Mishandled& broken cores 4 day old product

  20. INEFFICIENCIES - NON VALUE ADDED ACTIVITIES Typical Core Making Process Queue Queue Queue Queue Cauffiel Drag Cauffiel Cope Core Fit Multiple queues build up between handling & relocation of product Queue Queue Queue Cure Dip = value added = transport Queue Queue Queue Pour Iron = waiting Multiple queues build up between handling & relocation of product

  21. INEFFICIENCIES - BOTTLENECKS Oven capacity lower than dipping Dipping capacity lower than core fit & assembly Long queues Excessive WIP

  22. Dog Bone Redford Redford Redford Redford #1 CORE ROOM - PROPOSED LAYOUT & FLOW Tooling delivery route Mezzanine Cauffiel Supervisors’ Office Oven stretched & moved back All dipping vats auto refilled Mud & gas delivery route Shell Core Shell Core

  23. IMPROVEMENTS Shadow boxes constructed and installed at every core making machine. Decreases core box changeover times and makes tool searches more efficient. BEFORE AFTER

  24. IMPROVEMENTS LINE OF SITE BEFORE AFTER

  25. IMPROVEMENTS BEFORE ORGANIZATION AFTER

  26. IMPROVEMENTS VALUE ADDED ACTIVITIES AFTER (Mar 05) BEFORE (Jan 05) Over 10% improvement

  27. IMPROVEMENTS

  28. IMPROVEMENTS BEFORE WIP REDUCTION AFTER

  29. IMPROVEMENTS PRODUCTIVITY * Includes individual & assembled cores

  30. IMPROVEMENTS COST REDUCTION

  31. PLANT 4 Assess benefit of real time monitoring of the grinding/finishing output through the application of touch screens concept installed at Plant 1

  32. PLANT 4 GRINDING ROOM Visible productivity display Bottleneck 2 man, 2 touch flow 1 man, 1 touch flow BEFORE AFTER

  33. IMPROVEMENTS PRODUCTIVITY Learning phase: new part for operator, new set up.

  34. IMPROVEMENTS 1 - PIECE, 1-TOUCH FLOW Yellow arrows show 1- touch work flow through grinding operation Pass Quality Check Pushbutton

  35. IMPROVEMENTS PRODUCTIVITY

  36. COST BENEFIT ANALYSIS

  37. PLANT 5 Assess benefit of “real time” monitoring of grinding-finishing output through application of “touch screens”

  38. CURRENT GRINDING ROOM LAYOUT Most grinding in plant 2 is done with a 2-man set up. There are frequent bottlenecks at the first grinder resulting in excessive waiting by the 2nd grinder for work. 1st grinder 2nd grinder

  39. PRODUCTION FLOW PLANT 2 GRINDING SHOP PROCESS FLOW Queue on Belt Sort Queue 1st Grind t = 0 Raw Castings Present Queue Inspection Queue Queue 2nd Grind Queue Multiple queues build up between handling & relocation of product Queue on Belt Sort Queue 1st & 2nd Grind t = 0 Raw Castings Forecast Queue Inspection Queue Queue

  40. PROPOSED GRINDING ROOM LAYOUT Sorter • Headcount reduced • Bottlenecks removed • Faster throughput Gravity Feed 1st / 2nd Grinder Forklift driver

  41. IMPROVEMENTS PRODUCTIVITY

  42. . PLANT 5 Improve scheduling (melt-mold-core making-finishing-shipping-outside vendor) systems and logistics to improve material flow, reduce lead time (receipt order-to-ship) and improve on-time delivery to customers

  43. SUMMARY • Value Streamed “Order - To - Cash” • Identified Process Breakdowns • Identified Corrective Actions • ABC’d Cores By Priority (Cost & Complexity) • Recommended Formal Cycle Counting Program • Recommended Samples Included As Part Of Master Schedule • Formalized Plan To Realize Inventory Accuracy Goals

  44. VALUE STREAM MAPPING EXAMPLE

  45. STEP #3 - IDENTIFICATION OF PROCESS BREAKDOWNS EXAMPLE • Wrong Pricing (Customer Documentation / Old Pricing) • Wrong Delivery Dates • Incorrect Revision Level • No Set Up Charge • Wrong Quantities • Wrong Shipping Address

  46. STEP #3 – cont’d • Wrong Customer Information In System – Documents With Old Pricing • Waiting On Customer To Respond • Lead Time Deterioration Conclusion: Contract review process is broken and requires PROCESS ACTION TEAM to re-engineer process to address causes and to determine corrective and preventive action

  47. PLANT 5 Improve productivity and through-put in core making operations to reduce costs and improve scheduling logistics for molding operations

  48. CORE INVENTORY High volume of finished core inventory yet schedule consistently 3 weeks overdue and customer delivery only 75% on time

  49. IMPROVEMENTS SPEED Through Value Stream Mapping, set up time was reduced by 10% and cycle time was reduced by 12% for a total saving of $372K.

  50. PLANT 5 Create process improvement – scrap rate reduction methodology/team to reduce in-house scrap rate and customer returns

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