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20 Manufacturing Case Studies [2024]

In this collection of 20 manufacturing case studies, we explore a variety of industries embracing technological innovation, sustainability, and efficiency to tackle modern challenges. These examples showcase how global leaders have successfully implemented groundbreaking strategies to enhance their processes, reduce environmental impact, and remain competitive in the ever-evolving market landscape.

20 Manufacturing Case Studies

Case study 1: ford motor company – implementation of 3d printing.

Company Overview:  Ford Motor Company, a giant in the automotive industry, has been exploring cutting-edge technologies to better its manufacturing procedure and development.  

Challenges:

1. Need for faster prototyping to accelerate product development.

2. Reduction of waste and costs in the manufacturing procedure.  

Solutions Implemented:  Ford integrated 3D printing technology into its manufacturing and prototyping processes. This technology allows for quickly creating parts and tools at a significantly lower cost than traditional methods.  

Results:  3D printing enabled Ford to drastically reduce the turnaround time for prototyping from months to days, accelerating the overall time to market for new vehicle designs. This approach also minimized waste and reduced the costs associated with manufacturing prototypes and certain parts, enhancing sustainability and efficiency.

Case Study 2: Patagonia – Leading Sustainability in Textile Manufacturing

Company Overview:  Patagonia, a prominent clothing label, is celebrated for its commitment to ethical manufacturing and sustainable practices.  

1. High environmental impact of traditional textile production processes.

2. Client demand for sustainable and ethically created items.  

Solutions Implemented:  Patagonia adopted organic cotton and recycled materials for its products, emphasizing sustainability throughout its supply chain. The company also implemented the Worn Wear program, encouraging consumers to repair and reuse their gear instead of buying new.  

Results:  These initiatives have significantly reduced the company’s carbon footprint and water usage, aligning with its mission to cause no unnecessary harm. Patagonia’s commitment to sustainability has improved its brand, drawing an increasing number of environmentally aware consumers.

Case Study 3: Siemens AG – Digital Factory Initiatives

Company Overview:  Siemens AG, a global electronics and electrical engineering leader, operates across the industry, power, and healthcare sectors. The company is at the forefront of industrial automation and digitalization.  

1. Increasing production efficiency and flexibility in a rapidly changing technological landscape is necessary.

2. Reducing the carbon footprint of manufacturing processes.  

Solutions Implemented:  Siemens launched its Digital Factory initiatives, which include using digital twins, automation with AI, and integration of IoT devices across its manufacturing operations. These technologies enable virtual testing and optimization before physical processes occur.  

Results:  Implementing these digital solutions has significantly enhanced the efficiency and precision of Siemens’ manufacturing methods. The digital twin technology, in particular, has led to a 30% decrease in time-to-market for new products, improved system performance, and reduced energy consumption across various facilities.

Related: Career in Manufacturing vs Service Industry

Case Study 4: Toyota Motor Corporation – Sustainable Plant Initiatives

Company Overview:  Toyota Motor Corporation is known for its innovative approaches to manufacturing and is a pioneer in producing energy-efficient vehicles, including the Prius hybrid.  

1. Maintaining leadership in automotive innovation while lessening the environmental influence of manufacturing processes.

2. Implementing measures to conserve water, reduce waste, and cut energy use.  

Solutions Implemented:  Toyota has invested heavily in building sustainable plants. One of its notable initiatives is the use of bioenergy and hydrogen fuel cells for energy. The company has also established comprehensive recycling programs and extensively utilizes solar panels across its plants.

Results:  These sustainability efforts have allowed Toyota to reduce its waste and energy consumption drastically. Using renewable energy sources in its plants has significantly cut carbon emissions. Toyota’s commitment to sustainability has improved its environmental footprint and positioned it as a leader in sustainable manufacturing practices.

Case Study 5: Boeing – Lean Manufacturing and Automation

Company Overview:  Boeing, one of the largest aerospace companies globally, manufactures commercial jetliners as well as defense, space, and security systems. Boeing is known for its high standards in manufacturing efficiency and innovation.  

1. There is a need for high efficiency and precision in aircraft production, which are complex assemblies with tens of thousands of parts.

2. Minimizing production time and cost while maintaining the highest levels of quality and safety.  

Solutions Implemented:  Boeing has embraced lean manufacturing techniques and advanced automation in its production lines. This includes using automated guided vehicles (AGVs) to move parts within the factory, automated drilling and riveting systems, and advanced robotics for assembly processes.  

Results:  The adoption of these technologies and practices has led to significant improvements in Boeing’s production efficiency. Automation has reduced the time required for assembly processes by about 25%, and lean manufacturing techniques have minimized waste and optimized the use of resources across Boeing’s production facilities. Additionally, these advancements have contributed to maintaining high safety and quality standards, which are critical in aerospace manufacturing.

Case Study 6: Intel Corporation – Advanced Chip Manufacturing

Company Overview:  Intel, a semiconductor industry leader, manufactures microprocessors central to many computing devices. The company is known for its technological innovations and large-scale manufacturing capabilities.  

1. The need to continually push the boundaries of chip performance and energy efficiency.

2. Managing the complexities and cost of ultra-precision manufacturing processes.  

Solutions Implemented:  Intel has pioneered the development of next-generation microprocessors using advanced manufacturing techniques, including photolithography and 3D transistor technology. The company invested heavily in state-of-the-art fabrication facilities with clean rooms and automated assembly lines to control the manufacturing environment precisely.  

Results:  These investments and innovations have allowed Intel to produce reduced, more powerful, and energy-efficient chips. This progress has kept Intel at the forefront of the semiconductor industry, maintaining its competitive edge and responding effectively to the rapidly evolving demands of global markets.

Related: High Paying Jobs in Manufacturing Industry

Case Study 7: BASF SE – Resource-Efficient Chemical Production

Company Overview:  BASF, one of the world’s leading chemical companies, is involved in various products, including chemicals, plastics, implementation products, farming solutions, and oil and gas.  

1. Reducing energy consumption and environmental impact in chemical production traditionally involves high energy and resource usage.

2. Ensuring sustainable growth and compliance with increasingly stringent global environmental regulations.  

Solutions Implemented:  BASF has implemented a “Verbund” system in its operations, integrating energy and material flows across different production units to maximize efficiency and minimize waste. The company also uses advanced catalysts and other innovative technologies to enhance the efficiency of chemical reactions, reducing the need for energy and raw materials.  

Results:  The Verbund system has significantly reduced energy use and greenhouse gas emissions. BASF has reported that this system saves the company approximately 19 million MWh of energy annually, equivalent to the energy consumption of a small city. These efforts have improved BASF’s environmental footprint and strengthened its position as a leader in sustainable chemical production.

Case Study 8: Coca-Cola – Water Replenishment and Recycling Initiatives

Company Overview:  Coca-Cola, one of the largest beverage companies globally, produces and distributes a variety of soft drinks and other beverages. Given the scale of its operations, sustainable water use is a critical focus for the company.  

1. Significant water usage in beverage production, coupled with growing environmental concerns.

2. The need to balance high production volumes with sustainability commitments.  

Solutions Implemented:  Coca-Cola launched comprehensive water stewardship initiatives, including advanced water treatment and recycling technologies to ensure water used in manufacturing processes is returned to the environment safely. The company also invested in community-based partnerships to replenish water in stressed areas.

Results:  Through these initiatives, Coca-Cola has achieved its goal of replenishing 100% of the water it uses in its finished products. This milestone underscores its commitment to sustainable water use. These efforts have helped mitigate the environmental impact, improved community relations, and supported regulatory compliance.

Case Study 9: Caterpillar – Automation and Connectivity in Machinery Manufacturing

Company Overview:  Caterpillar is a leading construction and mining equipment manufacturer known for its heavy machinery and engines. The company is focused on enhancing product quality and operational efficiency.  

1. High variability in product demand requires flexible manufacturing processes.

2. The must improve production efficiency and reduce operational costs.

  Solutions Implemented:  Caterpillar has embraced Industry 4.0 technologies, incorporating automation, machine learning, and IoT connectivity in its manufacturing operations. This includes using autonomous robots for material handling and assembly, sensors, and data analytics to predict maintenance needs and optimize production schedules.  

Results:  The integration of these technologies has significantly increased Caterpillar’s manufacturing agility and efficiency. Automation has reduced labor costs and improved safety by taking over dangerous tasks previously handled by humans. Moreover, connectivity solutions have enabled real-time monitoring and adjustments, leading to better product quality and faster response times to market changes.

Related: Marketing for the Manufacturing Sector

Case Study 10: Airbus – Implementing Eco-Efficient Manufacturing

Company Overview:  Airbus is a global leader in aerospace and defense, known for its commercial aircraft, helicopters, military transports, and space systems. Sustainability and innovation are key pillars of its business strategy.  

1. The aerospace industry has a significant environmental footprint, particularly in carbon emissions and resource consumption.

2. Increasing regulatory and consumer pressure to reduce environmental impact.  

Solutions Implemented:  Airbus has implemented several eco-efficient manufacturing techniques, such as using lighter and more sustainable materials, including composites that reduce the overall weight of aircraft. The company has also integrated more efficient manufacturing processes that reduce waste and energy consumption.

Results:  These initiatives have enabled Airbus to decrease fuel consumption and CO2 emissions, contributing to more sustainable flight operations. The use of advanced materials and technologies has also reduced the lifecycle environmental impact of its products, helping Airbus meet its sustainability goals and regulatory requirements.

Case Study 11: Samsung Electronics – Smart Factory Solutions

Company Overview:  Samsung Electronics, a major global player in consumer electronics and semiconductor manufacturing, strives for high efficiency and innovation in its production processes.  

1. High competition in the electronics market requires rapid adaptation to changing consumer demands.

2. Need for high efficiency and precision in manufacturing small, complex electronics components.  

Solutions Implemented:  Samsung has developed and implemented “Smart Factory” solutions across its manufacturing facilities. These include automation, AI, and IoT technologies that streamline production processes, enhance quality control, and reduce production times. For instance, automated assembly lines and AI-driven defect detection systems have improved production yield and efficiency.  

Results:  The Smart Factory initiatives have significantly improved production speed and quality while reducing manufacturing costs. By minimizing human error and optimizing production workflows, Samsung has maintained its position as a leader in the highly competitive and rapidly evolving tech industry.

Case Study 12: Tata Steel – Advanced Manufacturing and Sustainability Initiatives

Company Overview:  Tata Steel, one of the world’s leading steel producers, is based in India and operates globally. The company is committed to innovation and sustainability in its operations.  

1. High energy usage and CO2 emissions associated with steel production.

2. Increasing global demand for sustainable building materials.  

Solutions Implemented:  Tata Steel has invested in cutting-edge technologies to enhance the efficiency of its production processes and reduce its environmental impact. These include using electric arc furnaces powered by renewable energy and advanced smelting techniques that significantly lower CO2 emissions. The company also focuses on recycling scrap steel, decreasing the requirement for raw materials, and minimizing waste.  

Results:  These sustainable practices have significantly reduced Tata Steel’s carbon footprint while maintaining production efficiency. Adopting electric arc furnaces and recycling initiatives has positioned Tata Steel as a leader in sustainable steel manufacturing, appealing to environmentally conscious consumers and businesses.

Related: How to Start a Career in the Manufacturing Industry?

Case Study 13: Pfizer – Digital Integration in Pharmaceutical Manufacturing

Company Overview:  Pfizer is a global pharmaceutical giant known for its research and development in medicine. The company focuses on innovation to improve healthcare outcomes worldwide.  

1. The need for stringent quality control and efficiency in the production of pharmaceuticals.

2. Rapid scaling of production capacities, especially highlighted by the COVID-19 vaccine rollout.  

Solutions Implemented:  Pfizer has embraced digital integration within its manufacturing processes, employing technologies such as data analytics, AI, and IoT to monitor production quality and streamline operations. For instance, during the production of the COVID-19 vaccine, Pfizer utilized advanced data systems to optimize the manufacturing and distribution process, ensuring rapid delivery and high-quality standards.  

Results:  The integration of these digital technologies enabled Pfizer to enhance its manufacturing agility and quality control, dramatically speeding up the production and distribution of the COVID-19 vaccine. This approach helped meet global demand swiftly and ensured that the vaccines distributed met the highest quality standards.

Case Study 14: H&M Group – Sustainable Textile Production

Company Overview:  H&M Group, a leading global fashion retailer, is committed to sustainable fashion, aiming to become fully circular and climate-positive.  

1. The fashion industry is among the largest polluters globally, primarily due to high water usage, chemical dyes, and textile waste.

2. Consumer need for sustainable and ethically produced fashion is growing.  

Solutions Implemented:  H&M has implemented several sustainability initiatives, such as increasing the use of recycled and sustainably sourced materials, introducing water-efficient dyeing processes, and setting up garment collecting programs in their stores to promote recycling.  

Results:  These measures have significantly reduced H&M’s environmental impact. The company has made strides towards using 100% recycled or sustainably sourced materials by 2030. Additionally, their garment collection initiative has helped recycle thousands of tonnes of fabric, preventing waste and promoting circular fashion.

Case Study 15: Tesla, Inc. – Automation and Innovation in Electric Vehicle Manufacturing

Company Overview:  Tesla, Inc. is a leader in electric vehicle (EV) and clean energy solutions, renowned for its innovative approach to automobile manufacturing and energy solutions.  

1. Scaling production to meet the demands for electric vehicles.

2. Reducing manufacturing costs to make EVs more accessible to a broader market.  

Solutions Implemented:  Tesla has pioneered high automation in its production lines, particularly in its Gigafactories, which integrates cutting-edge robotics and artificial intelligence to streamline manufacturing processes. Tesla has also extended its battery technology to drop costs and enhance automobile efficiency.  

Results:  Tesla’s high degree of automation has drastically reduced the time and cost associated with vehicle assembly, allowing the company to scale up production rapidly. Innovations such as introducing more efficient battery cells have not only enhanced vehicle performance but have also lowered the cost of EVs, facilitating broader market adoption.

Related: Digital Transformation in the Manufacturing Sector

Case Study 16: Procter & Gamble (P&G) – Zero Manufacturing Waste

Company Overview:  Procter & Gamble, a multinational consumer goods corporation, manufactures various products, including personal health/consumer health and hygiene products.  

1. Significant environmental impact due to waste generated from large-scale production processes.

2. Increasing regulatory and consumer pressure for sustainable practices.  

Solutions Implemented:  P&G initiated a zero manufacturing waste program to have no manufacturing waste go to landfills. The company optimized its resource use and improved its recycling, reuse, and conversion practices, including converting waste to energy.

Results:  The initiative eliminated manufacturing waste across all its global plants, significantly reducing P&G’s environmental footprint and operational costs. This accomplishment has further bolstered P&G’s standing as a leader in sustainable manufacturing.

Case Study 17: General Electric (GE) – Advanced Additive Manufacturing

Company Overview:  General Electric, a multinational conglomerate, functions in the power, renewable energy, aviation, and healthcare sectors. GE has been at the forefront of industrial innovation.  

1. Need to enhance product performance and reduce production costs in highly competitive sectors.

2. Accelerate the development cycle of complex products.  

Solutions Implemented:  GE has aggressively invested in additive manufacturing (3D printing), particularly for producing parts for its aviation and healthcare equipment. This technology allows for lighter, more efficient designs and drastically reduces material waste.  

Results:  Additive manufacturing has enabled GE to produce parts that are impossible to make with traditional methods, reducing the weight of some components by up to 80% and overall production times by 50%. This has led to cost savings and improved product performance, particularly in jet engines and medical imaging devices.

Case Study 18: IKEA – Sustainable Furniture Manufacturing

Company Overview:  IKEA, a global furniture and home accessories leader, is known for its affordable and innovative products. The company is committed to positive environmental practices.  

1. The environmental impact of logging and furniture manufacturing.

2. Consumer demand for sustainably sourced and produced furniture.  

Solutions Implemented:  IKEA has focused on using sustainable materials such as bamboo, recycled wood, and plastics. It has also implemented more efficient manufacturing processes to reduce waste and energy consumption, including flat-pack designs that optimize transport efficiency.

  Results:  These practices have significantly reduced IKEA’s carbon footprint and made its operations more sustainable. Using recycled materials has reduced waste and appealed to environmentally conscious consumers, enhancing IKEA’s market reach and brand loyalty.

Related: AI in Chip Manufacturing Use Cases

Case Study 19: Nestlé – Water Efficiency in Food Production

Company Overview:  Nestlé, one of the world’s largest food and beverage companies, has a broad portfolio that includes dairy products, coffee, water, and pet care.

  Challenges:

1. High water usage in food and beverage production.

2. Growing global pressure to adopt sustainable water management techniques.  

Solutions Implemented:  Nestlé has focused on water stewardship, implementing advanced water recycling and reduction techniques across its factories worldwide. The company has invested in technology that treats and reuses water from manufacturing processes.  

Results:  These measures have drastically reduced Nestlé’s water consumption per ton of product, helping the company achieve significant water savings and reducing its overall environmental impact. Nestlé’s commitment to water efficiency has improved its sustainability credentials and compliance with international environmental standards.

Case Study 20: John Deere – Precision Agriculture Manufacturing

Company Overview:  John Deere, a leading agricultural machinery manufacturer, also focuses on technology solutions to improve farm productivity and sustainability.  

1. Increasing demand for agricultural efficiency and sustainability.

2. Farmers need tools that reduce costs and increase crop yield.  

Solutions Implemented:  John Deere has incorporated advanced technologies into its equipment, such as GPS tracking, IoT connectivity, and data analytics, to facilitate precision farming. These technologies allow for better resource management, optimizing everything from seeding to harvesting.

Results:  Adopting these technologies has enabled farmers to significantly increase efficiency and reduce waste, leading to better yields and lower environmental impact. John Deere’s creations have cemented its leadership in the farming sector, proposing cutting-edge resolutions catering to current farmers’ requirements.

These 20 case studies demonstrate the transformative power of innovation in manufacturing across diverse sectors. By adopting advanced technologies and sustainable practices, these companies have optimized their operations and set new standards for environmental responsibility and operational excellence. Their success stories offer inspiration for future industry advancements.

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15 Sustainable Manufacturing Examples and Case Studies

Updated: Nov 17, 2023

The environment and society are intricately linked. This is something that companies have come to realize, with many now making efforts towards sustainable manufacturing as a way of ensuring both cost efficiency while meeting expectations from customers or investors alike, and local communities that could be impacted.

The environmental and economic benefits of green growth are becoming more well-known, with many businesses already taking important steps towards it. Their pioneering experiences show that this can go hand in hand for profitability as well as sustainability.

Here are 8 reasons why big brands are moving towards sustainable products

Sustainable Manufacturing Case Studies

Sustainability is the future , but many businesses have not yet leapt into this new era. They may be struggling with their short-term survival or cost pressure from clients and lack of knowledge on how best to invest in environmental improvement. It can also simply seem like an overwhelming task for those who are just starting out.

Related Article: Case Study: Taking Advantage of ODM Manufacturing

Here are some examples and brief case studies which will help show how this new approach has helped businesses save money in addition to improving their products or operations.

1. Gairdin: Manufactures sustainable gardening tools and pots

Gairdín, pronounced “Gar-Jean”, is the Gaelic Irish word for garden. They specialise in garden tools that are environmentally friendly, made from recycled and sustainable raw materials like Ocean-Bound Plastics and Algae-Blended Resin. Gairdin are a division of Diversitech Global comprising 20 years of industrial expertise in product design, manufacture and packaging. Find originality and innovation with sustainable materials always top-most in mind.

Related Article: 7 Sustainable Gardening Practices for Environmentally Conscious Individuals

2. Electrolux, Kinston Plant: Reduced energy cnsumption

The Electrolux Green Spirit program made an impactful approach to reducing energy consumption and environmental impact. Their Kinston factory achieved this by running the processes as efficiently as possible, switching off all equipment when not in use, lowering the plant's demand for compressed air and installing motion sensors for lighting. And engaged engineering and maintenance personnel to find and repair a compressed air leak every day.

3. Advanced Composite Structure: Eliminated excess raw material usage

Using lean manufacturing and a value mapping process, their production processes and the layout of the company’s production area were analyzed and reviewed. They eliminated excess movement, materials, and extra tooling to help create a more streamlined product flow. The company reduced costs by 65%, increased production from 20 units per shift to 45 units per shift, reduced its production facility size by 73%, and reduced scrap rates from 24% to 1.8%.

4. Guardian Automotive: Implemented a waste recycling program

Guardian Automotive is committed to reducing its environmental footprint. They have implemented a waste reduction program for them not only to be sustainable but also more efficient with resources. The company is now recycling among other materials unused glass cullet, fiberglass and scrap polyvinyl chloride. In 2005, the Ligonier Plant recycled more than 13,000 tons of waste and saved over $360,000.

5. Custom Print: Reduced its chemical inventory

When an investigation into the company’s chemical inventory and purchasing records revealed over 80 different chemicals on-site, a team from press operators to maintenance personnel got together for some brainstorming sessions to reduce inventory. Wasted ink was reduced by training employees to mix speciality colors from existing ink stocks. Furthermore, they came up with suggestions like modifying ventilation and air-conditioning efficiency to help improve worker health as well as greatly reduce energy costs.

6. Chrome Deposit Corporation: Cut down natural gas consumption

To increase energy efficiency and improve their responsible business practices, Chrome Deposit Corporation embarked on an effort to develop new ways of doing things. By making simple changes like adjusting boiler settings and repairing minor gas line leakages, the company was able to cut its natural gas consumption by 12%. They also purchased two chillers which implemented a closed loop system for water use. This resulted in an 85% reduction in water usage.

7. Kennecott Utah Copper Refinery: Improved power grid efficiency

Kennecott Utah has improved the energy efficiency of its refinery through the installation of a combined heat and power system. Their 6-megawatt system replaced power purchased from the coal-powered grid. It supplies more than half of the refinery’s total electricity needs and waste heat is recycled to make steam for turbines. Among deep reductions in emitted pollutants, CO2 emissions were reduced by 36,000 tonnes.

8. Besam North America: Improved energy and waste handling

With serious consultation and recommendations, Besam targeted energy, waste, and productivity surveys. This included replacing metal halide lighting with fluorescent fixtures with occupancy sensors, installation of high-efficiency lamps and electronic ballasts, reducing compressor air pressure, and repair of compressed air leaks

9. Rapid-Line: Sustainable operations to reduce its natural gas usage

Rapid-Line which fabricates and tooling for the manufacturing industry was experiencing a significant increase in their natural gas costs. Also, one of their customers encouraged them to get more involved with green practices. A new installation of ceiling fans and baffles made for better heating and cooling. Extra insulation, automated controls and reusing excess heat from the paint-line ovens boosted efficiencies and eliminated external furnace heating.

10. Isothane: Replaced hazardous raw materials with sustainable alternatives

Isothane manufactures chemical products used for insulating and protecting constructions, buildings and civil engineering structures. New government legislation had been introduced with strict emission standards and to comply with flameproof manufacturing and storage standards. They spent two months researching less hazardous and flammable chemical alternatives. Substitute materials were found and old lines were discontinued. Solvent material use was greatly decreased and much less hazardous material was stored on-site.

11. Wausau Tile: Used recycled glass chip as raw material

Wausau Tile wanted to save money and use less natural raw materials while being environmentally conscious. The company believed that by using post-consumer/industrial glass chips, which is difficult and expensive to recycle, they could reduce their environmental impact and attract new customers with their decorative value. With the use of large glass chip aggregate, they were able to make their products attractive and architecturally pleasing, and have introduced it across whole product lines.

12. Calstone: Sustainable furniture production

The company found that it could expand its market by selling more environmentally sustainable furniture products. Major changes were brought to its manufacturing plant. A vapour spray system reduced degreasing agents used on metal components. A 2000 gallon water tank reuses water for cooling equipment, and rainwater is collected for toilet flushing. Installed skylights brought in natural light for the benefit of indoor foliage plants that purify the indoor air. The company buys electricity from a hydro and wind power provider and has installed solar panels on the roof.

13. PortionPac Chemical Corporation: Products assessment based on green standards

Intending to become more sustainable, the company began an assessment on its products and obtained third-party green certification for all floor cleaners, all-purpose cleaners, glass cleaners and bowl cleaners. Also, by updating packaging components, they reduced waste, disposal costs and shipping. In addition, they also found a buyer for one of their by-product materials. These steps made PortionPac attractive to large businesses, schools and hospitals as they had the sustainability credentials along with their potential for saving costs

14. S.C. Johnson: Reduced environmental effects of its ingredients

In order to continue producing high-quality products with an environmentally-friendly mindset, S.C Johnson has developed their Greenlist system which ranks the environmental and health effects of ingredients used in its manufacturing process leading to the reformulation of many old favorites. After reviewing Saran Wrap usage, the company eliminated 4 million pounds of PVDC and reduced 1.8 million pounds of volatile organic compounds from its famous Windex product.

15. Honda: Reduced scarce material usage

Honda is serious about sustainability. They have a Green Path program that targets reductions in the use of materials and scarce resources, developing products that are easier to recycle, and reduced water waste as well CO2 emissions during manufacture. Honda uses wind turbines at its Ohio plant to generate 10,000-megawatt hours of electricity per year. It also moves 80% of vehicles from plant to dealership by train, which has reduced CO2 emissions by over 60%.

So, what does this mean for sustainable manufacturers? It means that making a switch to producing sustainable products is not only the best thing to do for the environment, but it’s also a wise business decision. Consumers are more interested than ever in buying sustainable products and that trend is only going to continue.

Making the switch to sustainable manufacturing may seem daunting, but it’s important to remember that you’re not alone. There are plenty of resources and support systems in place to help you get started. And the best part is, making the right choice for your business and the environment can also be good for you.

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The Lean Post / Articles / Lean Management Case Studies Library

Lean Management Case Studies Library

By Chet Marchwinski

May 16, 2014

Learn how a variety of businesses and organizations used lean management principles to solve real business problems. We’ve arranged the examples in 16 categories to help you find the ones right for your environment.

Lean Management Examples from a Variety of Businesses

The following case studies of lean management principles in action show you how a variety of real businesses solved real business problems under diverse conditions.

We’ve arranged the stories in 16 categories to help you find the examples you need. There is some overlap. For instance, a “Lean Manufacturing” case study may also appear with “Privately Held Companies.”

Lean Manufacturing

• Logistics, Supply Chain, and Warehousing
• Lean Material Handling
• Job Shops (Low-volume, High-mix Manufacturing); Tool and Die
• Lean in Government
• Lean Healthcare
• Lean Accounting
• Lean Construction
• Lean in Office and Service Processes
• Lean in Education

Problem Solving

Pull Systems

Culture Change

People Development

Privately Held Companies

Maintenance

Many of the executives who took part in these transformations are interviewed in LEI’s Senior Executive Series on Lean Leadership . After reading the case studies, be sure to get their personal perspectives on leading change. (Feel free to link to this page, but please respect the copyrights of LEI and journalists by not copying the articles.)

Are you doing something new or notable in the practice of lean management? Let us share what you learned with the lean community. For more information, contact LEI’s Director of Communications Chet Marchwinski at cmarchwinski at lean dot org

Thrustmaster Turns Around

Learn how Thrustmaster of Texas successfully adopted lean thinking and practices to make sustainable improvements in a short period of time, and how other manufacturers of highly engineered, low-volume products can follow their lead using the Lean Transformation Framework.

Lean + Circular Principals = a New True North for Manufacturer

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Followup Story:

Manufacturing Balancing Act: Pull Versus ERP

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Using Plan-Do-Check-Act as a Strategy and Tactic for Helping Suppliers Improve

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back to top

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Material Handling

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With single-item orders 80% of the time, a low-volume, high-mix manufacturer decided single-piece flow cells were the best way decided the best way to add new products without having to constantly reconfigure production.

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Grand Rapids, MI, turns to lean principles to consolidate operations, eliminate wasted time and effort, and streamline to improve productivity while providing the quality of service that residents want.

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Lean management case study series: Pediatric Hospital in Tough Market Pegs Growth to Lean Process Improvement

Lean improvement projects at Akron Children’s Hospital have saved millions of dollars, increased utilization of expensive assets, and reduced wait times for patients and their families.

Lean Design and Construction Project an Extension of Lean Commitment at Akron Children’s Hospital

Input from nurses, doctors, therapists, technicians, and patient parents heavily influenced design decisions..

“Pulling” Lean Through a Hospital

A thoughtful rollout of lean principles in the ER and eye-opening results created a “pull” for lean from other departments.

Best in Healthcare Getting Better with Lean

Mayo Clinic, Rochester, MN, stresses to doctors that the lean effort is aimed not at changing the moment of care, the touch moment between doctor and patient, but the 95% of the time when the patient is not in the doctor’s office

Fighting Cancer with Linear Accelerators and Accelerated Processes

Cross-functional team design and implement a lean process to dramatically increase the number of patients with brain and bone metastases receiving consultation, simulation, and first treatment on the same day without workarounds or expediting.

Massachusetts General Looks to Lean

A proton therapy treatment center, for many adults and children the best hope of beating cancer, applies lean principles to increase capacity.

New Facility, New Flow, and New Levels of Patient Care: The wait is over for patients at the Clearview Cancer Institute in Alabama

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The Anatomy of Innovation

At a hospital in Pittsburgh, the emerging vision for the “hospital of the future” is described as giving the right patient, the right care, at the right time, in the right way, all the time.

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A lean accounting implementation fills the frustrating disconnect between shop-floor improvements and the financial statement.

Knife Company Hones Competitiveness by Bucking the Status Quo

An iconic family-owned company turns to lean manufacturing to reduce costs by at least 30% to keep its U.S. operations open.

Office and Service Processes

The “inventory” of mail already is paid for, so moving it faster doesn’t improve cash flow as in lean manufacturing. But Canada Post discovered that traditional batch-and-queue postal operations could benefit from lean principles.

Lean Landscapers

At an Atlanta landscaping company, lean practices are making inroads into a service industry in unusual yet fundamental ways.

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Business at airline caterer LSG Sky Chefs dropped 30% when airlines cut flights after the terrorist attacks on September 11, 2001. Sky Chefs responded with a rapid launch of a lean initiative.

leveraging Lean to Get the Oil Out

Aera Energy LLC, a California oil and gas company,  relies on lean principles to improve key processes, including drilling new wells, repairing existing ones, and maximizing the number of barrels of crude pumped each day.

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Columbus, OH, public schools, experiment with lean tools and process thinking to remove wasteful activities that don’t help them help students learn.

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Value-stream mapping is one of many activities included in the Ford Partnership for Advanced Studies (Ford PAS), an academic program designed to link high-school classroom learning to the skills needed in college and business.

Build Your “House” of Production on a Stable Foundation

Rigorous problem solving creates basic stability in a machining intensive facility.

For Athletic Shoe Company, the Soul of Lean Management Is Problem Solving

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The rapid introduction of a lean system, beginning with just-in-time production and pull, helps a highly automated Midwest plant fight off overseas competition by reducing lead times and inventory while augmenting the plant’s advantage in service.

A Journey to Value Streams: Reorganizing Into Five Groups Drives Lean Improvements and Customer Responsiveness

An approach to creating a value-stream culture centered on autonomy, entrepreneurialism, and lean principles.

Making Lean Leaders — Ariens internship program develops lean and leadership skills

Besides making snow-blowers, mowers, and string trimmers, Ariens Co., of Brillion, WI, makes lean leaders.

Starting with daily management walkabouts and standard work, this 84-year-old, family-owned distributor laid the groundwork for steady gains for years to come, just two years after its first kaizen workshop.

Sustain Your Lean Business System with a “Golden Triangle”

After a medical device maker took a hit to margins to fight off global competition, it rebuilt them by lifting its lean operating system to a higher level and keeping it there with a “golden triangle” of sustainability. You’ll recognize two elements of the triangle right away: visual control and standardized work . The third, accountability management or a kamishibai system, is probably less well known but just as critical.

Cultivating a Lean Problem-Solving Culture at O.C. Tanner

If you are in the “appreciation business”, you have to live it in your own workplace. For O.C. Tanner that meant a lean transformation had to show the company appreciated and wanted people’s problem-solving ideas. Here’s a report on that effort, including what worked and what didn’t.

Lean Thinking in Aircraft Repair and Maintenance Takes Wing at FedEx Express

A major check that used to take 32,715 man-hours was cut to 21,535 hours in six months. That translated into a $2 million savings, which dovetailed with the company’s emphasis on reducing costs during the recession.

Construction

Input from nurses, doctors, therapists, technicians, and patient parents heavily influenced design decisions—from incorporating emergency room hallways that protect the privacy of abused children to the number of electrical outlets in each neonatal intensive care room.

Virtual Lean Learning Experience (VLX)

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About Chet Marchwinski

Chet has been a humble, unwashed scribe of the lean continuous improvement movement since books by Taiichi Ohno and Shigeo Shingo first hit North America in the 1980s. At LEI, he contributes to content creation, marketing, public relations, and social media. Previously, he also wrote case studies on lean management implementations in…

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Manufacturing Operations Management for Smart Manufacturing – A Case Study

• Conference paper
• First Online: 25 August 2020
• Cite this conference paper

• Michael Meyer-Hentschel 20 ,
• Oliver Lohse 20 ,
• Subba Rao 21 &
• Raffaello Lepratti 22  

Part of the book series: IFIP Advances in Information and Communication Technology ((IFIPAICT,volume 591))

Included in the following conference series:

• IFIP International Conference on Advances in Production Management Systems

4103 Accesses

4 Citations

Industry 4.0 was introduced early in the last decade. That introduction spawned related concepts like “Smart Manufacturing” and digitalization, as well as a proliferation of digital manufacturing technologies for supporting systems. The industry experienced widespread puzzlement over how to apply these concepts in practice and which roles “Manufacturing Executions Systems” play and will play in this context.

This paper outlines the change from classical Manufacturing Execution System (MES), with a focus on manufacturing execution including data collection, to monolithic Manufacturing Operations Management (MOM) with an extension of the functionality regarding quality management, planning inclusive scheduling and a collaborative MOM, which stands out from its predecessors through broad horizontal integration and cloud applications.

These parameters lead to an evolution of the Collaborative MOM towards a MOM for Smart Manufacturing, which harmoniously combines, controls and regulates the interaction of technologies such as IIoT, RAD, AI, Edge Computing, Cloud with the MOM functions and therefore enables new production systems like a cyber-physical production system (CPPS).

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Adaptive Scheduling in the Era of Cloud Manufacturing

Manufacturing Execution System State-Of-The-Art: Its Evolution and Dynamism Focused on Industry 4.0

Smart manufacturing systems for Industry 4.0: Conceptual framework, scenarios, and future perspectives

1 introduction.

Due to a variety of external and internal influences, such as increasing globalization, a steadily rising individualization of products and a related increase in complexity, which on the one hand directly affect the products but also have a strong influence on the associated production processes, the requirements on production systems are growing [ 1 ]. Concerning the growing requirements of modern production systems, the focus is on the following aspects: self-organization, decentralization, adaptability, networking, closed cycles and resource efficiency, live status of all production resources, customer integration in engineering and production as well as flexible process sequences and an open architecture [ 1 ].

Due to a large number of available solutions, most companies are currently using different technologies, detached from each other, to realize selective improvements in terms of process flexibility and output. Flexibility, agility and efficiency are essential components of future production landscapes. However, companies must go a step further and consider how production landscapes can be holistically and sustainably aligned to dynamic market changes, as this is the only way to fully exploit their potential [ 1 , 3 ]. This paper describes based on a case study how technologies and systems interact harmoniously via a holistic approach and thus optimally master existing and future requirements.

2 MOM Evolution Towards Smart Manufacturing

2.1 mes evolution to mom.

The concept of MES has evolved into a broader and more valuable solution: Manufacturing Operations Management. During the 1990 s the focus was on Stand-alone MES for improved manufacturing execution [ 7 ]. A best-in-class MES had to provide manufacturing digitalization, standardization, orchestration & collaboration, enforcement and contextualization with a focus on a specific industry. It was (and still is) critical to provide a rich set of industry-specific OOTB functionalities and a vertical integration with the specific production styles of such industry.

During the 2000s the manufacturing scope evolved from pure execution to broader coverage of manufacturing disciplines. From MES to monolithic MOM to digitalize manufacturing execution, quality management, planning and scheduling mostly working as disparate processes & systems under a monolithic MOM umbrella [ 9 ]. The traditional MES/MOM functions are defined in IEC 62264-1 [ 4 ].

Recently the monolithic MOM evolved even further to an integrated MOM where applications are synchronized through common communication systems (see Fig.  1 ). This is crucial to connect quality improvements, with manufacturing processes and efficiency logic. Integrated MOM systems must also align with modern technologies: mobility, security, usability, flexibility, agility, etc.

MES evolution towards MOM

Regardless of the manufacturing industry segment, the manufacturing processes for OEMs or supplier tier, or the maturity of the business, one thing is clear: manufacturing enterprise will go through a continued digital transformation, no matter how digitalized they are today [ 6 ]. The question is what, when, and how will that transformation take place? Importantly, the functionality of manufacturing operations management has existed since the second industrial revolution—long before digitalization began. MOM functions always need to occur in any manufacturing setting, irrespective of advancement in production methods, level of automation and supporting systems & technologies – MES/MOM, IIoT, RAD, Edge computing, on-premise vs cloud [ 4 ]. What changes is the mechanism or system that performs MOM functions, and the delivery mechanisms for those functions. This calls for more modularity in the MOM functions for flexibility and agility to fulfill the deployment across different technologies and able to meet the transformation and manufacturing data & processes orchestration towards digital excellence in Industry 4.0 and Smart Manufacturing journey.

2.2 MOM Evolution to MOM for Smart Manufacturing

There is an increased transformation in the industry where traditional mass production “make to stock”-environments are transitioning to mass customization modes [ 5 ]. In such transformations, the need for flexibility and agility in manufacturing operations is becoming more prevalent.

This need for flexibility & agility is driving the need for increased automation to the line (robots & automated inspection devices), material handling systems (e.g. AGV’s). With increased automation and human-machine interactions in shop-floor, how engineering data, manufacturing process, quality and supply chain data is harmonized along with AI principles to orchestrate the data across the systems and processes is more critical for factories of future/smart manufacturing. This calls for a robust connectivity & brokering function as an interoperating module across the systems with streamlined data flows. In the realm of IIoT, cloud and other advanced technologies, MOM for Smart Manufacturing should architecturally address the data orchestration and brokering function.

Specific to MOM, architectural advancements of modular MOM functions towards smart manufacturing functions leveraging IIoT & Cloud is the pivot. As certain functions will remain close to shop-floor data & network latency needs [ 2 , 4 ], flexibility in architecture is critical.

The gathered information has to be made available for all necessary participants or IT-systems. Therefore, the focus of horizontal integration of a collaborate MOM has to be widened to also include the vertical integration to enable cyber-physical production systems (CPPS) [ 8 ]. As in Fig.  2 depicted, MOM must evolve from a “Collaborate MOM” further to a “MOM for Smart Manufacturing” to address the above-mentioned challenges. Current production architectures and IT-systems don’t support that high degree of collaboration combined with the functionality to orchestrate those information.

MOM evolution towards Smart Manufacturing

3 Case Study

A good case study for this aspect is a manufacturer of electric motors, used for the oil and gas industry, paper production, as well as for the use in subways, trains and trams in Germany.

The manufacturer faced the challenge that its products are in direct competition with products on the world market which is currently characterized by overcapacity. This intensified competitive situation requires a cost and time optimized production of the products, with constant high quality. In addition to these external influences, the following factors represent internal motivation drivers. On the one hand, this is the increased variance of the products and the associated complexity concerning order processing and all associated processes and, on the other hand, the insufficient documentation of the “as-built” of the products.

One of the main problems here was excessive processing time, which in turn had a negative effect on costs and the time it took for the customer to receive his order. The reasons for the high processing time were a lack of transparency regarding the workstations and their production resources (e.g. status regarding capacity utilization or availability of production resources and tools and materials) and inefficient detailed planning and order control based on this, which had a particularly serious effect when malfunctions occurred.

From these challenges, concrete requirements and functions for and on the production system have been derived and developed: live status of all production resources, real-time localization, smart products/components, networking, mobile apps, AGVs, flexible adaptation of defined processes, open system architecture.

The idea was to design and implement an innovative production system based on an existing MOM (Mix between Collaborate MOM and a MOM for Smart Manufacturing) by using new technologies and methods (IIoT, RAD, Edge Computing, AI, …), which meets the requirements in a particularly efficient way.

The system now consisted of individual modules, each of which fulfills a specific task. The challenge now was to find an answer to the elementary question: how can such a system, consisting of a multitude of different solutions (hardware and software components), be made to work together and finally be made controllable?

The solution is a new module for the MOM for Smart Manufacturing. The following describes how the developed system is built and how it works. The central element for controlling and regulating such a system is organized communication. All participants in the production system must be enabled to exchange relevant information for specific production tasks with each other. For this purpose, we have implemented a so-called coordinating-app with the help of a RAD platform, which realizes the communication within the system in combination with an MQTT-Broker (Message Queuing Telemetry Transport protocol) which works according to the publish and subscribe principle. This protocol uses topics and payloads to share information among the system participants. We used JavaScript Object Notation (JSON) for the transfer of information via payload linked to the different topics. The system participants e.g. the product, the workstations, the AGVs but also the IT-Systems are managed within the app and their communication is defined and organized and so leveraging IIoT. This application regulates which information can be provided by which participant and for which participants this information could be relevant, for example, for processing a production order. According to this principle, the respective participant (MQTT-Client) publishes its information, which can then be received and processed by the others if required. This approach makes the IT landscape simpler, in particular, the standardized interface and the faster exchange of information between clients are major advantages. Figure  3 shows the implemented communication structure within the production system with all participants. To explain how the system works, this is described in more detail using the processing of production orders. The orders come roughly scheduled from the ERP level and are fed into the control and regulation level together with product information from the PLM level (e.g.: 3D models). In this layer the actual state of work cells, resources, material availabilities will be considered and an optimized manufacturing date, with consideration of all production orders, will be determined. This production date is updated in the production order and triggers the intralogistics for commissioning and in-time supply for production. The result is transferred to the MES which then passes the order information (work plan, including work instructions, required production resources, quality information, skills required for processing, dependencies, pre-conditions regarding the production sequence) on to the individual intelligent products and to other relevant participants (e.g. workstations and operators). The products, therefore, have all the plannable information that is required for production. All other information, such as the status of individual production cells, is obtained by the products independently via the developed communication concept. In addition, process and quality parameters are recorded, linked to the production order and processed in the MES. That information enables the creation of an “as build model” of the product. The previously defined communication forms the framework for efficiently processing the order within the system.

IT-architecture

In concrete terms, the module consists of two software components. A master app and a client app. Figure  4 contains the definitions of the terms used in the following and shows the relationship between information - topic - category including visual representation.

Relationship between information - topic - category

The master app performs the following tasks:

System description:

Selection and addition of system participants based on predefined categories or creation of new categories

Selection of predefined topics depending on the selected category or creation of new topics and assignment to categories

Manage the system participants:

Create and delete categories

Create and delete system participants

Organization of communication:

Creation and deletion of information that can be transported using topics

Assigning and solving information to topics

Creating and deleting topics

Assigning and solving topics to categories

Selection whether the topic is subscribed by category or published by it.

Whereby the client app covers the following range of functions:

Installation on the operating system of the system participants or Smart Production Tag

Initialization: Configuration of the app after installation, with the goal of providing system participants with information

Communication from system participant to Client App:

Selection of the protocol (OPC UA, MQTT, REST, SOAP, …)

Characteristics of the interface: Which data should be propagated?

The result is a concept for the standardized exchange of information and based on this, an organized collaboration across all components within a production system. Furthermore, it can be seen as a preliminary stage of a self-organizing production system. The presented IT-Architecture is a prototype approach in a test environment. To achieve this high degree of communication and collaboration within a production different IT-Systems, like MES, AGV-Management, etc., as well as different system interfaces must be evaluated and implemented. To simplify the implementation of such a production architecture current collaborative MOM systems with an already high degree of horizontal integration must evolve further into a MOM for Smart Manufacturing (see Fig.  2 ). A MOM for Smart Manufacturing provides functionalities to orchestrate a production system and thus is the foundation of a production architecture with a high degree of horizontal and vertical integration. The described communication principals between the participants could be implemented in a current MOM system to achieve a MOM for Smart Manufacturing.

4 Conclusion

This case study shows how a manufacturing approach according to the Industry 4.0 initiative could be implemented with a holistic IT-structure. Collaborative MOM systems need to further evolve into a “MOM for Smart Manufacturing” to not just ensure a collaboration between different IT-Systems, like IIoT and RAD, but also to orchestrate the data gathered and shared along those data driven self-organizing production systems.

Furthermore, a MOM-solution for Smart Manufacturing must be extensible and scalable to support customer-specific processes. MOM for Smart Manufacturing is therefore to be understood rather as a layer that combines all relevant functions for smart production in harmonious and highly efficient interaction. To realize a digital transformation, as shown in the presented case study, a flexible IT-architecture is needed to introduce new IT-systems and MOM-functions in a stepwise manner to minimize disruptions of manufacturing and business processes.

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Acknowledgment

This work was carried out with the knowledge and experience gathered from the project “Road to Digitalization” (R2D), which was supported by the Bavarian state ministry of economy, media, energy and technology and several companies.

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Correspondence to Oliver Lohse .

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Gregor von Cieminski

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Meyer-Hentschel, M., Lohse, O., Rao, S., Lepratti, R. (2020). Manufacturing Operations Management for Smart Manufacturing – A Case Study. In: Lalic, B., Majstorovic, V., Marjanovic, U., von Cieminski, G., Romero, D. (eds) Advances in Production Management Systems. The Path to Digital Transformation and Innovation of Production Management Systems. APMS 2020. IFIP Advances in Information and Communication Technology, vol 591. Springer, Cham. https://doi.org/10.1007/978-3-030-57993-7_11

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Case Study: Lead­ing Chip Man­u­fac­tur­ing Company 

Address­ing new engi­neer­ing chal­lenges with ai and machine learning.

A global manufacturing company teamed up with CGOE for a special project. They needed a tailored educational program for their engineers, a group of professionals who specialize in materials engineering and work with cutting-edge technology. These engineers are always on the lookout for the latest in AI, machine learning, and data science to tackle complex engineering issues.

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Harness the power of ai and data science.

The organization wanted their engineers to gain the latest AI skills necessary to launch successful data science initiatives and accelerate the development and deployment of new chip technologies. To make it happen, they sought the expertise of Stanford Engineering faculty, renowned for their leadership in AI and engineering teaching and research.

How the Pro­gram Worked

The company handpicked 30 engineers, primarily process engineers with three to five years of experience, along with others eager to implement AI and machine learning practices in their work. The group learned together in a 15-week educational program entitled  Harnessing the Power of AI/ML to Address New Engineering Challenges.  They attended weekly lectures by Stanford faculty as well as in-person sessions on the corporate campus, gained access to live virtual TA office hours, and completed project work that culminated in capstone presentations. Stanford faculty and the program Academic Directors Andrew Spakowitz, chemical engineering, and Felipe Jornada, materials science engineering, led the charge. 

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The results were impressive. These rock star engineers are now well-equipped with cutting-edge AI and machine learning skills, enabling them to confidently tackle new engineering challenges in their field and hit their data science projects and product goals out of the park. What’s more, they earned a well-deserved Stanford Certificate of Achievement.

“ I walked out of the lin­ear regres­sion lec­ture and imme­di­ate­ly trained a mod­el on pol­ish­er removal data for a process I’m work­ing on!”

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Our Team's Approach: Provided customized Power BI reports to automate and streamline the reporting process 

A forward-thinking manufacturing company known for its top-tier pest management solutions needed an efficient way to track inventory and produce timely reports. Before implementing Power BI, employees spent hours each week manually downloading reports from Microsoft Dynamics Great Plains (GP), inputting data into spreadsheets, and merging it with information from other spreadsheets. This process of downloading multiple detailed reports and manually generating inventory reports was time consuming, tedious, and prone to errors. The company turned to Citrin Cooperman to enhance and automate their reporting processes, improving both efficiency and visibility.

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What Really Makes Toyota’s Production System Resilient

• Willy C. Shih

“Just-in-time” only works as part of a comprehensive suite of strategies.

Toyota has fared better than many of its competitors in riding out the supply chain disruptions of recent years. But focusing on how Toyota had stockpiled semiconductors and the problems of other manufacturers, some observers jumped to the conclusion that the era of the vaunted Toyota Production System was over. Not the case, say Toyota executives. TPS is alive and well and is a key reason Toyota has outperformed rivals.

The supply chain disruptions triggered by the Covid-19 pandemic caused major headaches for manufacturers around the world. Nowhere was this felt more acutely than in the auto industry, which faced severe shortages of semiconductor chips and other components. This led many people to argue that just-in-time and lean production methods were dead and being superseded by “just-in-case” stocking of more inventory.

• Willy C. Shih is a Baker Foundation Professor of Management Practice at Harvard Business School.

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ISO 9001:2015 Case study: Context of the organization as a success factor in manufacturing company

Clause 4.1 of ISO 9001:2015  is causing lot of ambiguities and raising more questions than answers to most quality practitioners. Defining context of the organization basically means determining the foundation of your QMS and where your company stands in terms of internal and external issues related to the QMS. This requirement of clause 4 can seem too general, and there is a risk of going too wide when defining the internal and external issues. In fulfilling this clause, you should focus only on issues that can affect the customer satisfaction and delivery of quality product and/or service.

This simple example will help you understand how to determine context of the organization according to ISO 9001 in small or midsize production company and give some inspiration in your implementation project.

Small company from the South East Europe, let’s call it ABC Company, produces terrace and staircase metal fences and exports its products for some time in Germany. Since the projects are being more and more lucrative, their German customers required implementation of ISO 9001. First milestone in implementation of the standard was definition of context of the organization .

Internal context

  The country where ABC Company is located is not an EU member and yet over 90% of its products are exported to Germany, particularly metal fences. Their product delivery includes not only the production of the metal fences but also installation on the buildings and production of metal fixtures for furniture industry. Considering that the company employees cannot stay in Germany more than three months without getting a working visa, the employees are organized into teams where one team is abroad in charge of installation of the products while other two teams are working at home location on production and assembly of the fences. Once this three months period expires, the team abroad switch with one of the teams located at home location. Each team has a mechanical engineer in charge and several shift managers that control and supervise the rest of employees. Employees are highly skilled for the operation they conduct so there is no so much formalism in reporting and getting instructions from superiors.

External context

Since the most of the products are delivered to Germany, the company is obliged to apply German and EU regulations regarding product quality, environmental protection and occupational health and safety. Being present on German market for 5 years, the company identified all legal requirements together with requirements of their customer which is one big German construction company and they are one of the subcontractors. Domestic market has far less requirements but it is struggling and prices on the foreign markets are more favorable so the future direction of the company is to meet requirements of it foreign customer and try to find another customers in EU countries.

Documenting context of the organization

The CEO of ABC Company decided to conduct SWOT analysis to furtherly examine the context of the organization and ensure inputs for further identification of risks and opportunities .

Table: SWOT analysis

The CEO decided that the records of SWOT analysis will be included in QMS  documentation; however, he did it reluctantly since information in the SWOT analysis can be considered as sensitive and he doesn’t feel comfortable showing them to the third party (e.g. certification auditor) but he did it at the insistence of Quality Manager. The final solution was to require from the certification body an NDA (Non Disclosure Agreement) and make sure that the information provided during the audit will be confidential and protected.

What’s next?

Information gathered through process of defining context of the organization will be used as an input for further phases in implementation of ISO 9001. The fact that only one kind of product is delivered to the customer who requires ISO 9001 certificate can influence the decision about the scope of QMS (for more information, see: How to define the scope of the QMS according to ISO 9001:2015 ), other issues identified can lead to actions to address risks and opportunities (for more information, see: How to address risks and opportunities in ISO 9001 ) or can even influence the business plan and overall strategy of the company in the future years in terms of expanding to another markets and seeking for more reliable suppliers.

To learn more about ISO 9001 requirements and particularly context of the organization, try our free online training:  ISO 9001:2015 Foundations Course .

Strahinja Stojanovic is certified as a lead auditor for the ISO 13485, ISO 9001, ISO 14001, and OHSAS 18001 standards by RABQSA. He participated in the implementation of these standards in more than 100 SMEs, through the creation of documentation and performing in-house training for maintaining management systems, internal audits, and management reviews.

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Brian L. Trelstad

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Lean Six Sigma for the improvement of company processes: the Schnell S.p.A. case study

The TQM Journal

ISSN : 1754-2731

Article publication date: 15 October 2021

Issue publication date: 17 December 2021

The aim of this study is to develop an in-depth case study on the implementation on Lean six sigma (LSS) in Schnell S.p.A., Italian company leader of an important multinational industrial group, highlighting the benefits that can be achieved from a careful application of this method, the main challenges and organizational learning from its implementation.

Design/methodology/approach

The study has been developed with a qualitative approach, creating a single in-depth case study, with the participant observation of researchers in the project which lasted 4 months. Periodic weekly meetings were done with the working group to exchange feedback on the development of the project to share opinions and data.

A project has been developed to stabilize the procurement process of a pull-type production cell, which experienced delays in supply lead times. The causes of the problems in their process of managing the supply of the production cell were found and some inefficiencies in the internal process of fulfillment of supply orders have been intercepted, the optimization of which has allowed the generation of an automatic system for sending supply orders, coming directly from the production line.

Originality/value

This study described the path and dynamics of the transformation process that business organizations undertake for optimizing their profitability and competitive advantage, placing emphasis on an innovative methodology for conducting business process improvement projects, which constitutes its operating philosophy on the effective and efficient use of company resources and skills, to guarantee to the company the achievement of a lasting and defensible competitive advantage over time.

• Lean thinking
• Lean production
• Quality management
• Continuous improvement

Murmura, F. , Bravi, L. , Musso, F. and Mosciszko, A. (2021), "Lean Six Sigma for the improvement of company processes: the Schnell S.p.A. case study", The TQM Journal , Vol. 33 No. 7, pp. 351-376. https://doi.org/10.1108/TQM-06-2021-0196

Emerald Publishing Limited

Copyright © 2021, Federica Murmura, Laura Bravi, Fabio Musso and Aleksandra Mosciszko

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

The development of an effective quality improvement or continuous improvement strategy is a key factor for long-term success of modern organizations. Over the last decade, Lean Six Sigma (LSS) has become one of the most popular and proven business process improvement methodologies organizations have ever witnessed in the past ( Antony et al. , 2017 ), and it has been accepted globally as a management strategy for achieving Process Excellence ( Gijo et al. , 2019 ).

Lean Six Sigma is a management strategy for improving corporate productivity and profitability, that aim to maximize the Customer satisfaction by reducing constraints which the company organization is subject in terms of activities that do not create value for the Customer. In practice, LSS is an improvement strategy that analyze quantitative data on business performance to identify, eliminate and control problems and inefficiencies related to manufacturing cost, service cost, quality, productivity and customer satisfaction ( Singh and Rathi, 2019 ; Snee, 2010 ) throughout the business processes.

The objectives of quality and efficiency, supported by Lean Six Sigma, are made by DMAIC: a structured method for improving the performance of existing processes ( Sordan et al. , 2020 ), based on the application of the concepts Define, Measure, Analyze, Improve and Control. It provides a standardized guideline for the elaboration of improvement projects and provides different statistical tools and techniques appropriate to each phase of the DMAIC cycle ( Sordan et al. , 2020 ) able to lead to the root causes of business problems and to eliminate the wastes and reduce the variation, thus, ensuring substantial improvement in business processes ( Bhat et al. , 2020 ).

The term LSS was first introduced into literature around 2000 LSS, while LSS teaching was established in 2003 as part of the evolution of Six Sigma ( Timans et al. , 2012 ). Since that time, there has been a noticeable increase in LSS popularity and deployment in the industrial world ( Shah et al. , 2008 ) and researchers had the interest to publish more papers on LSS to try to come up with a comprehensive approach to achieve continuous improvement. However, as suggested by Albliwi et al. (2015) , there are still many gaps that need to be addressed in LSS literature such as benefits, motivation factors, challenges and limitations ( Pepper and Spedding, 2010 ; Laureani and Antony, 2012 ), and there is also a lack of research in the relation between LSS and organizational learning and in recent years a lot of systematic literature reviews on the topic have been published on the topic but only few case studies have been analyzed in the research field to cover this gap.

Therefore, the aim of this study is to cover this gap, by developing an in-depth case study on the implementation on LSS in an Italian company leader of an important multinational industrial group, that is Schnell S.p.A., that constitutes its main research and production center and provides technological, organizational and commercial support for the entire group. Schnell operates in over 150 countries around the world through its 11 subsidiaries, over 50 agents and resellers, and a dense network of service centers.

This research work has the objective of highlighting the benefits that can be achieved from a careful application of LSS method in the company, the main challenges and also organizational learning from LSS implementation, showing its application in details in an important reality like that of Schnell S.p.A.

The paper is structured as follows: Section 2 depicts the theoretical background, describing the merging of Lean Production and Six Sigma and defining the critical success factors of lean six sigma implementation; Section 3 defines the methodology used, Section 4 presents and discusses the results of the case study while the last section draws the main conclusions.

2. Literature review

2.1 the merging of two quality philosophies: lean production and six sigma.

The LSS notion was announced to the world in 2002, when Michael George used it for the first time in the book “Lean Six Sigma: Combining Six Sigma with Lean Speed” ( Sordan et al. , 2020 ; Sreedharan and Raju, 2016 ). He is the founder and Chief Executive Officer of the George Group, one of the largest LSS project consulting firms in the United States.

Although its appearance is quite recent, LSS arise from two complementary but different approaches ( Sordan et al. , 2020 ): Toyota Production System (TPS), a famous organizational orientation developed in Japan, from the 1960s and 1980s, spread with the concept of “Lean Thinking”; and Six Sigma, a technical quality management program, introduced by Motorola Corporation in manufacturing arena in 1987 ( Singh and Rathi, 2019 ).

The synergy between Lean and Six Sigma created a data-driven ( Sreedharan and Raju, 2016 ) and top-down business strategy to improve the quality and productivity of organizations ( Singh and Rathi, 2019 ; Sordan et al. , 2020 ).

When we talk about Lean Thinking, we are talking about a business culture, based on respect, trust and cooperation between employees and oriented by a constant search for perfection that allows to reach the highest quality of products and services offered by the company and consequently to maximize customer satisfaction.

To achieve this goal of perfection and to optimize profits, corporate actions must be aimed at a constant effort to reduce costs and wastes of tangible and intangible resources, by distinguishing valued-added activities from non-value-added activities and eliminating wastes that increases cost without adding value in the eyes of the customer ( Antony et al. , 2017 ; Cudney et al. , 2014 ): activities that are unnecessary and not required for the operations of the business ( Jayaram, 2016 ).

Lean Thinking emphasizes on productivity improvement along with speed to respond to customer needs and create a streamlined, high-quality system that produces finished products at the pace of customer demand with little or no waste ( Lande et al. , 2016 ).

Wastes are called Muda, and they can be defined as real sins that hinder the ideals of perfection. The eight types of waste are defined as transport, inventory, motion, waiting, overproduction, overprocessing, defects and non-utilized skills ( Gijo et al. , 2019 ). To identify and eliminate Muda, Lean strategy brings a set of proven tools and techniques that allow to reduce lead times, inventories, set up times, equipment downtime, scrap, rework and other wastes of the hidden factory ( Lande et al. , 2016 ). Corbett (2011) affirms that while lean focuses on the elimination of waste and improving flow, it has some secondary effects: quality is improved; the product spends less time in the process, thereby reducing the chances of damage and obsolescence.

But we have to remember that the commitment to Lean Thinking must start at the top management level and should be cascaded down to various levels across the organization to improve flow and efficiency of processes ( Antony et al. , 2017 ).

Six Sigma (SS) is a business process improvement and problem-solving approach ( Lande et al. , 2016 ) that seeks to find and eliminate causes of variability, as well as defects or mistakes in business processes, by focusing on process outputs which are critical in the eyes of customers ( Antony et al. , 2017 ). The main objective of Six Sigma is to obtain “zero defect” or, in statistical terms, to reduce defects up to 3.4 parts per million opportunities ( Singh et al. , 2019 ).

To study variability, Six Sigma utilizes a problem-solving methodology to define, measure, analyze, improve and control processes and implement cost-effective solutions leading to significant financial savings ( Singh et al. , 2019 ) not only for manufacture sectors but also remove the defects throughout the corporations ( Singh and Rathi, 2019 ). This methodology is called DMAIC and it emphasizes on variation reduction, defect reduction and process evaluation (the effectiveness issue).

The complementarity between both approaches can be justified when the deficiencies inherent in each of them are observed, acting in isolation ( Sordan et al. , 2020 ). Both had produced tremendous results but had limitations: Lean is not well suited to resolving complex problems that require intensive data analysis, and advanced statistical methods, and, Six Sigma implementation showed how not every problem can be resolved with only a big data collection ( Antony et al. , 2017 ).

Lean does not address variation within a process; rather it addresses variation between end-to-end processes which appears in the form of waste. One of the major limitations of Lean is that it cannot be used to tackle problems related to process stability and capability ( Gijo et al. , 2019 ) and it tends to work best with “solution known” problems, where we realize that we are not operating to best practices, Lean implements them and make rapid improvements with minimal data collection ( Hoerl and Gardner, 2010 ). Six Sigma is most effective when used for improvement projects intended to drive processes towards process entitlement, in situations where the solution to the problem is unknown ( Snee and Hoerl, 2007 ).

As stated by Pepper and Spedding (2010) if lean is implemented without Six Sigma, there is a lack of tools to fully exploit the improvement of its potential. Conversely, if Six Sigma is adopted without lean thinking, there would be a cache of tools for the improvement team to use, but no strategy or framework to bring one's application to a system.

Combining Lean manufacturing principles and Six Sigma tools and techniques enables organizations to form a powerful improvement combination ( Hoerl and Gardner, 2010 ; Lande et al. , 2016 ) that has allowed many organizations to solve more problems quicker ( Antony et al. , 2017 ). It is a successful integration because Lean focuses on improving the flow of information and materials between the steps in the process and Six Sigma works to improve the value-adding transformations which occur with in the process steps ( Antony et al. , 2017 ).

LSS defines an approach, but of course does not dictate the specific progression of the project or dictate the unique mix of tools to be used, which of course needs to be problem specific ( Hoerl and Gardner, 2010 ). The appropriate blend of Lean and Six Sigma tools useful on any one problem therefore depends on the nature of the specific problem being solved ( Antony et al. , 2017 ).

The marriage between these two methodologies provides a more integrated, coherent and holistic approach to continuous improvement ( Pepper and Spedding, 2010 ) and has led to the creation of a breakthrough managerial concept ( Sordan et al. , 2020 ; Chiarini, 2012 ) with the aim to create a new business culture that breaks the link with the traditional way of working in all productive functions. LSS adds a new task to daily working duties: the recovery of operational efficiency through training growth of people, extensive use of data culture and problem-solving methodologies; all activities that simultaneously allow the improvement of quality, the costs and business complexities reduction, the increasing revenue ( Galdino de Freitas and Gomes Costa, 2017 ; Jayaram, 2016 ) and, finally, greater reliability of the services provided to the end customer. The application of LSS methodology results in reduced waste, defects and improve process, which in turn provide high-quality products at minimum cost, and this leads to customer delight, which ultimately raises the societal living standard ( Singh et al. , 2019 ; Jayaram, 2016 ), the well-being of employees and the quality of the work environment (Galdino de Freitas and Gomes Costa, 2017 ).

LSS aims not only to improve financial results through the improvement of company production processes, but it targets to help organizations build an adequate relationship with society, employees and the environment ( Galdino de Freitas and Gomes Costa, 2017 ).

Both Lean and SS require a company to focus on its products and customers and LSS as a part of management strategy to increase the market share and maximize profit ( Lande et al. , 2016 ). It produces benefits in terms of better operational efficiency, cost-effectiveness and higher process quality, because it promotes total employee participation from both top-down and bottom-up as a win-win practice to both management and staff members ( Gijo et al. , 2019 ).

2.2 Critical success factors of lean six sigma implementation

Lean Six Sigma strategy is versatile in nature and has a lot of applications in a variety of industries.

It can be applied in manufacturing as well as non-manufacturing environment ( Singh and Rathi, 2019 ). It has broad applicability in service, healthcare, government, non-profits, education ( Antony et al. , 2017 ) automotive, textile, steel and aerospace industries ( Sordan et al. , 2020 ). Although LSS has its roots in manufacturing, it is proven to be a well-established process excellence methodology in almost every sector despite its size and nature ( Gijo et al. , 2019 ). It is useful in small-and medium-size organizations as well as large organizations ( Antony et al. , 2017 ).

LSS is also suitable for less experienced organizations: Bhat et al. (2020) write about the successful deployment of LSS strategy in an Indian industry with orthodox industrial practices, limited manpower, constrained capital and confined knowledge on scientific improvement practices, and the research proves that even a novice user can effectively participate and implement LSS with proper mentoring to enhance the system.

Regardless of the sector in which the LSS is applied, this shows the spread of LSS in various organizations as one of the best strategies for organizational excellence ( Sreedharan and Raju, 2016 ). But it is important to remember that achieving maximum strategic and management efficiency cannot be based on the replication of principles and models of Lean approach.

Each organization is immersed in different social, cultural and economic conditions. For this reason, lean tools must be sized and customized on business contexts and simultaneously the entire business organization must be adapted to the changes that Lean Six Sigma generates and that it needs to be applied effectively ( Lande et al. , 2016 ; Raval et al. , 2018 ; Singh et al. , 2019 ; Gijo et al. , 2019 ).

These requirements for cultural change are the main critical success factors for LSS ( Sreedharan and Raju, 2016 ).

Critical success factors are the actions and processes that must be controlled by the management ( Lande et al. , 2016 ) during the implementation of a LSS project.

Top management involvement and commitment ( Lande et al. , 2016 ; Gijo et al. , 2019 ). The top management involvement and commitment are essential for successful implementation ( Pepper and Spedding, 2010 ) of any LSS initiative. It must personally support all improvement initiatives and integrate the LSS culture into entire organizations. Its active participation can multiply the positive project effects and make a significant impact at all levels ( Gijo et al. , 2019 ). If the top management will not take initiatives and not show their full involvement it could cause the failure of LSS implementation ( Singh et al. , 2019 ).

Employee involvement, empowerment and training ( Lande et al. , 2016 ; Gijo et al. , 2019 ; Bhat et al. , 2020 ). The cultural growth of internal staff is the heart of LSS programs because it offers necessary tools to create a clear vision of the project, to focus on teamwork and, above all, to fight the resistance to cultural and operational changes ( Singh et al. , 2019 ; Sunder and Antony, 2018 ). Employee training also contributes to gain a high level of internal communication which facilitates the implementation of LSS ( Lande et al. , 2016 ; Singh et al. , 2019 ; Gijo et al. , 2019 ; Bhat et al. , 2020 ). Training is necessary to create a supporting infrastructure (the belt system) and a holistic approach to improvement including area of application and methodology used ( Antony et al. , 2017 ). The belt system includes Master Black Belt, Black Belt, Green Belt, Yellow Belt and depending on the complexity of the problem considered and skills required to solve it, the appropriate Belts are selected ( Gijo et al. , 2019 ) to play the role of leadership and guidance of the project team.

Linking LSS to business strategy and customer satisfaction ( Lande et al. , 2016 ). Improvement projects must be closely linked with maximizing customer satisfaction. Top management defines business objectives and identifies improvement projects capable of guaranteeing greater remuneration in terms of optimizing company productivity and profitability, as well as projects that can be reached using available resources, which do not require high investments and which allow to obtain undisputed results with limited deadlines in a limited period of time. Improper linkage between organizational objective and customer's requirement leads to failure of LSS implementation ( Singh et al. , 2019 ; Singh et al. , 2019 ; Gijo et al. , 2019 ).

3. Methodology

The study is a conceptual development and it has been developed with a qualitative approach, creating a single in-depth case study of Schnell S.p.A. that derives from a Group Purchasing Excellence Project. The case study allowed for examining in depth the implementation of a Lean Six Sigma improvement project for the transformation and simplification of the production process of the Schnell “Alfa” and “Beta” machines with the aim to reduce the delivery times of its products ( Yin, 1994 ). The case study was developed with the participant observation of researchers in the project which lasted 4 months, starting from November 4, 2019 to March 4, 2020. As for the participant observation, the researcher was directly involved in the LSS implementation activities, collaborating with the working group in the figure of the project manager, and facing directly obstacles and problems that emerged during these stages of the same (par. 4.2.1.1 will define the detailed description of the project). Periodic weekly meetings were done with the entire working group to exchange feedback on the development of the project, to share opinions and data. Participant observation activity was triangulated with secondary data, such as company reports and the website, collected during the period of support in the company. Secondary data have been used mostly to describe Schnell history, structure and the services it offers to customers.

Minitab 19 statistical analysis software was used to describe and summarize the data collected during the project and shown in the result section.

4. Results and discussion

4.1 company profile: schnell s.p.a.

Schnell S.p.A. is an Italian company that has been operating for almost 60 years in the manufacturing sector of automatic machines and plants for processing iron for reinforced concrete. It was born in 1962 thanks to the devotion of a group of entrepreneurs, driven by the dream of transforming the tiring and dirty world of iron working, into a modern industry, dedicated to conquering the global market. The company embarks on its own path by offering a first innovative solution that allowed faster binding of the reinforcing bars, flanked by the production of construction site machinery for cutting and bending the bars. The rise in the automatic machinery sector has started with the development of mechanisms for the production of cylindrical cages; however, the real change of course compared to its competitors will take place with the addition of electric servomotors, used, before now, only in fields such as robotics and military industry. Thanks to this type of instrumentation, Schnell machines are characterized by high power, speed, reliability and precision. They guarantee to the customer the achievement of economies of scale and better production techniques due to the high productivity offered, reduced set up times and low maintenance costs. Schnell S.p.A. offers the market a high range of machines and systems that allow a variety of processing of iron for reinforced concrete, including straightening, stirrup bending and shaping machines for bending, shaping and cutting iron in rolls or bars; cage making machines for the formation of cylindrical poles and cages for construction; machines and plants for the production of electrowelded mesh; machines for wire straightening and cold rolling lines; rotor straightening machines for processing steel wires for the industrial sector; machines for the production of prefabricated insulating panels for building construction; software for the management of iron processing centers using Schnell automatic machines. As a result of the high quality of these products, Schnell S.p.A. has managed to win the trust of its customers all over the world, reaching a turnover of over 100 million euros.

The Schnell Group is characterized by a staff of over 700 employees worldwide, and is made up of 5 production plants; 7 centers for installation, sales, spare parts and after-sales services; Schnell Software (Spain), which is a center for the creation and development of software systems for the management and organization of production carried out using Schnell machines and Schnell Home S.r.l., production center of machines for the construction of innovative elements for building construction, called “Concrewall”. Achieving a highly competitive advantage over its competitors in the same sector was possible due to constant investments in research, development and technological innovation of products and processes. Product innovation, since the company is always ready to respond to market needs through the development of a customer-oriented approach, which allows to offer integrated and customized production solutions. Process innovation, since, as stated in the “Integrated Quality Policy” and “Purchasing Excellence Group Program” of Schnell S.p.A., the efforts of the whole company are oriented to create effective methods of managing internal operational processes, with a view to maximizing end customer satisfaction.

As a result of the constant commitment in this direction, at the end of 2007, Schnell S.p.A. managed to obtain the quality system certification according to the ISO 9001 standard, delivered by the prestigious certification body TUV Italy, and renewed in 2019 in compliance with the updates undergone by the standard in September 2015.

The important results obtained in terms of product and process quality was also possible due to the dissemination and application of Lean Manufacturing principles and methodologies.

4.2 The development of the lean six sigma project in Schnell S.p.A

The layout of the cell, the equipment and the production tools have been designed and arranged horizontally following the phases of the process;

The production plans were planned on order, therefore, on the basis of the orders received from its customers, following the production theories with the pull logic;

The manufacturing of the machines was organized in small batches conducted with the one-piece flow system;

The management of the entire procurement process of raw materials and production components has been entrusted to the Kanban system;

The line operators have been trained to complete all manufacturing operations in complete autonomy.

The products supplied with their own identification codes;

Periodicity of reordering;

Minimum order quantity;

Delivery Lead Time (in working days);

Safety Stock Level: quantity of products to be held in the warehouse as a mandatory stock;

Technical specifications of production;

Specifications for packaging and delivery.

For further stabilization of the production process, aimed at increasing product quality, the characterizing element of the In-Lining Line was to reach a Free-Pass quality level. This qualitative incoming methodology has allowed a high reduction in the variability of the external production process, of the components characterized therein, while requiring significant direct and indirect investments by sourcing.

The entire In-Lining apparatus is governed by a vital element for the correct planning of the production phases: the supply Lead Time.

This index represents the time elapsing from the time of issue of the purchase order to the time of actual receipt of the goods. It allows to efficiently plan the supply of production components, and therefore, to define the periods for sending purchase orders.

Lead time of supply;

On-time Delivery (the ratio between the number of orders processed on time and the number of total orders processed, in the period considered).

With a view to Project Management, a work team was set up with the task of studying and analyzing the procurement process of the In-Lining line, and the phases of the Plan-Do-Check-Act (PDCA) and DMAIC approach were followed for the implementation of the project.

4.2.1 “Define” phase

The objective of the first phase of the project was to identify all the aspects necessary to define the process to be improved, therefore, to develop a planning prospectus called Project Charter containing: the representation of the problem detected, the objectives to be achieved, the requirements required from the customer, the inputs and outputs of the process and the metrics necessary to measure it, the enhancement of the current process and possible savings achievable by improving the process, the team members, and finally, the deadlines of the project phases.

4.2.1.1 Project description

Analyzing the lead times of supply of the supplying process of the In-Lining Line, conducted with the Kanban system, it was reported that the most important supplier in terms of quantity, tends not to respect the agreed delivery terms.

Upper specification limit (USL) = LEAD TIME 5 days (working);

Lower specification limit (LSL) = LEAD TIME 2 days (working).

Analyze the deliveries to the line of the last available calendar period, from 01/11/2018 to 31/10/2019;

Perform stratification of the detected deliveries, until the root causes are reached;

Define the initiatives and control charts to ensure the stability of the procurement process over time.

Lead Time of supply;

Defects per Unit – DPU;

Defects Per Million of Opportunity – DPMO;

Sigma Level.

The project team was made up of the members defined in Table 1 .

The implementation of the DMAIC phases was organized through the Gantt Chart ( Figure 1 ), with the aim of a precise subdivision over time of the individual activities to be carried out, while all the information that defines the project was collected in the Project Charter document of Figure 2 .

4.2.1.2 Project risk analysis

During the planning of the project, different potential risks were identified that could affect the smooth running of the project. These were found in relation to different sources from which they could derive (see Table 2 ).

Severity (P): expresses the potential damage that the occurrence of the risk could cause in the implementation of the project;

Occurrence (G): expresses the probability that the risk may occur;

Detection (R): expresses the probability of risk detection once it has occurred.

Each variable was assigned a score from 1 to 5, in which 1 represents an insignificant risk condition and 5 that of extreme risk (only for the Detection variable, the lower the score assigned, the greater the probability of risk detection).

The most critical risks have been identified through the Risk Priority Index – Risk Priority Number (RPN) obtained from formula f.1. f .1 ) RPN = S × O × D

The highest priority was checked for the risks “Inability to use software” and “Insufficient knowledge and skills of members” (see Table 3 ).

4.2.1.3 Process representation

To obtain a macro view of the process, the Supplier Input Process Output Customer (SIPOC) diagram has been developed ( Figure 3 ) which highlights the main elements that make up the activities examined.

4.2.2 “Measure” phase

The second phase was aimed at defining and measuring the progress of the process at the current stage. For a better representation, the flow of activities necessary to replenish the In-Lining line has been outlined through the Flow Chart ( Figure 4 ) which identifies on the left side the operations that add value within the process (AV), while, on the right side, those with non-added value (NAV), therefore considered as waste.

The process was further represented through the Value Stream Mapping technique ( Figure 5 ) which allowed to estimate a total Process Time (P/T) of 11.6202 h (11 h 37 min and 12 s), divided into 11.40417h (11 h 24 min and 15 s) for value-added activities and 2.216 h (12 min and 57 s) for non-value-added activities. Together with downtime and shipping times, the entire process is performed with a maximum total Lead Time (L/T) of 8 days, 8 h, 5 min and 28 s.

4.2.2.1 Data collection

PRODUCT A.1;

PRODUCT A.2;

PRODUCT B.1;

PRODUCT B.2;

PRODUCT C.1;

PRODUCT C.2;

These products are characterized by belonging to similar categories, therefore, with the aim of greater interpretation and a better comparison of data, the population has been grouped into stratified categories with reference to the product group to which they belong, type of production component and final product.

4.2.2.2 Interpretation of data with statistical tools

In the first phase, the graphical summary analysis was performed ( Figure 6 ) showing the results of the Anderson-Darling Normality Test, the descriptive statistics and the confidence intervals for the mean, median and standard deviation of the data population in exam. The graphs show that deliveries are characterized by an average delivery lead time of 9.4324 working days which falls within a range of 70 working days. The recorded variation therefore determines a standard deviation of 14.4877.

Second, from the Anderson-Darling normality test, a p -value <0.005 is obtained: this value demonstrates that the analyzed data derive from a distribution that cannot be approximated to a Gaussian model.

The current result is a consequence of the fact that in the population, in correspondence with the value in the 3rd Quartile of 7 days and Maximum of 74 working days, irregular values can be highlighted, called outliers, which arise from particular causes of a special type, and which therefore prevent a regular data analysis and interpretation, negatively affecting all study results.

It was highlighted that these were four deliveries relating to the same order, made on August 31, 2018, of two components of CATEGORY C, in particular of PRODUCT C.2.

Through a more in-depth investigation, it was possible to observe that the supply agreement was drawn up and confirmed prior to the first delivery of the product in the sample phase. Consequently, the high delivery lead time was justified by the fact that the supplier had to provide totally new products, the production of which had to be studied and adapted to their production processes.

Given the particular situation, to carry out a more meaningful analysis, it was decided not to consider the indicated outliers values, and to run the graphical summary analysis again, this time on a population made up of N  = 70 units ( Figure 7 ).

In this case, the standard deviation assumes the value 4.1852, the average delivery Lead Time tends to reduce to the value of 6.1429 working days; however, again it is possible to deduce a p -value < 0.005; therefore, the data derives from a distribution that cannot be approximated to a Gaussian model. It is possible to conclude that the entire process is not under statistical control: the distribution consists of values that cannot be approximated to a Gaussian model, characterized by a supply trend that cannot be predicted over time.

On the basis of these results, it was possible to state that the supplier encountered numerous difficulties in fulfilling supply orders from the In-Lining Line, since the delivery process of the components was characterized by Lead Times that deviate significantly compared to the average lead time recorded (see Figure 8 ).

To express the supplier's performance in terms of Process Sigma, the values of Table 4 were taken into consideration, which summarizes the variables necessary for the calculation of the Defects Per Units (DPU), the Defects Per Opportunity (DPO) and the Defects per Million of opportunity (DPMO) index: (1) DPU = Numerosità   difetti   rilevata ( D ) Numerosità   campione ( U ) (2) DPO = DPU Opportunità   di   errore ( O ) (3) DPMO = DPO × 1.000.000

The supply of the In-Lining line is characterized by a Sigma Level equal to 1.85, therefore, the current process is carried out with a yield of 63.51%.

4.2.3 “Analyze” phase

Based on the considerations obtained from the measurements made in the Measure phase, in this third stage of the project the team's goal was to intercept the categories of components that found the greatest difficulties in the procurement process.

Considering the high variability of the delivery process, in order to identify priority areas of intervention, the analysis was further processed through the Pareto diagram and, for easier interpretation, it was carried out by stratifying the data on the basis of the single category of belonging (see Figures 9 and 10 ).

It was observed that 39% of deliveries ( Table 5 ), carried out in the period under consideration, were carried out outside the established lead time specifications of 5 working days. The supplier presents the greatest number of critical issues with the fulfillment of orders relating to the GROUP A category, in particular with the fulfillment of PRODUCT A.1 and PRODUCT A.2, and to a lesser extent, with PRODUCT B.1 and PRODUCT B.2.

For the GROUP B category, difficulties were found in the delivery of the PRODUCT C.2 and PRODUCT D components; however, for the latter, the non-conformities found cannot be analyzed, as they are insignificant.

4.2.4 “Improve” phase

In the Improve phase, the purpose of the study activity was to identify the root causes of the problems that the Business Partner identified in the process of fulfilling the supply orders of the In-Lining line, and secondly to identify the paths for improvement to correct the criticalities detected.

4.2.4.1 Root cause analysis

The study was developed by analyzing the temporal trend of orders in the period considered for each PRODUCT category indicated at the end of the Analyze phase. For deliveries with greater difficulty, inquiries were carried out on the dates of issue and actual delivery of supply orders. In this phase, the help offered by the Production Planner of the Production Department who deals with the management of the production planning of the In-Lining cell was of great support. First of all, it was possible to deepen that in the delivery process of PRODUCT A.1 and PRODUCT C.2, in relation to the deliveries of the orders of the week 3/2019 and 2/2019, issued respectively with Lead Time of 23 and 22 working days, the supplier communicated the breakdown of a machinery necessary for the production of the components; therefore, it was not able to respect the contractual specifications. The Lead Time values detected here can be considered as outliers, determined by causes of a special type.

By analyzing PRODUCT A.2, it was possible to ascertain that some phases of the production process of the supplier in question were carried out in outsourcing to external suppliers not regulated by subcontracting contracts and, therefore, without evaluations in terms of lead time. As a result of this type of production management, instabilities in the internal delivery process have been generated.

For some deliveries, the supply lead time has been calculated incorrectly.

The supplier tends not to comply with lead time specifications, especially after prolonged company closure periods and in correspondence with orders processed in short periods.

To identify the root cause of the difficulties highlighted, the Five Why (5Why) method was used, which allowed to identify the cause-and-effect relationships of the problems to be analyzed ( Table 6 ). With the help of this problem finding tool, it was possible to ascertain that for some deliveries examined, the delivery lead time was calculated incorrectly as for orders corresponding to the deliveries themselves, the generation date did not correspond to the date of sending the order to the supplier. The system for sending supply orders for the In-Lining line provides that the verification and approval phase, carried out after the automatic proposal generation phase, takes place manually through the action of the Back Office – Purchase Department operator. In situations of absence of the operator, or late approval of the order, the supplier receives the document on a different date from that of issue.

With reference to the second problem identified, it was analyzed that the Business Partner highlights critical issues in terms of supply lead time, in relation to the fulfillment of orders received following prolonged company closure periods and for those received in short periods.

In the first case, these are deliveries made in the time interval corresponding to the periods of early January, late April and early September: time intervals that follow the periods of company holidays for national holidays.

It was assumed that prior to these company holiday periods, the warehouse safety stock was entirely consumed and not restored with further production of components. Therefore, it was considered that the supplier finds it difficult to ensure the restart of the post–holiday production activity through the forecast of its monthly requirements; therefore, it is unable to prevent the stock breaking of its warehouse.

For the second case, however, the supplier presented difficulties in fulfilling the orders placed in correspondence of short periods. More precisely, an out of specification Lead Time was highlighted in correspondence with the second/third order received in a monthly time interval. Also, for this criticality it has been hypothesized that there may be difficulties in ensuring an efficient planning of production activities and a correct forecast of one's monthly requirements, without incurring stock-outs in one's warehouse.

Activate an automatic system for generating, approving and sending orders to the supplier;

Arrange a meeting with the business partner in order to discuss the critical issues detected in the period studied.

With the aim of preventing further errors in the measurement system of the supply lead time indicator, and therefore overcoming the time gaps recorded between the generation phase and the order sending phase, the information technology (IT) department was entrusted with the task to generate an IT system that can automatically complete the entire process of fulfilling the supply orders coming from the In-Lining line. Considering the utmost importance of this improvement activity, the automatism created was implemented in the process starting from the first week of February 2020.

Check the efficiency of internal production planning;

Verify whether the process of managing the economic lot and purchasing the components creates an imbalance in the company loan;

Check if all the clauses contained in the stipulated subcontracting contract have been effectively understood;

Check if in the production planning phase, the periodicity of reordering of components is taken into consideration.

Lastly, having ascertained the delivery problems encountered when supplying the PRODUCT A.2 component, the Management of the production process of the In-Lining line carried out a strategic Make or Buy analysis. As a result of the evaluation carried out, on 14/11/2019, the subcontracting contract was canceled and the procurement of the components was entrusted to an alternative Business Partner.

4.2.5 “Control” phase

In the last phase of the DMAIC project, some activities were identified and implemented in order to keep under control the improvement activities introduced in the Improve phase.

To verify the operation and validity of the automated system for generating, approving and sending the supply orders of the In-Lining line, the IT department has launched a checkup mechanism with the aim of transmitting to the Purchase Department a daily report on the effective sending of orders created automatically.

Considering, however, the need to investigate the possible difficulties encountered, the meeting with the Business Partner was scheduled for the second week of March.

4.3 Benefits deriving from the implementation of the project

After an accurate analysis of the problem related to the reduction of lead time and its causes, it has emerged that the main concern is that in most cases the supply lead time has been calculated incorrectly, while in others supplier tends not to comply with lead time specifications, mostly after company closure periods and when orders are processed in short periods.

First, the implementation of the project has made the company become fully aware of the inefficiencies present in the delivery process of some of its components, allowing a high reduction in the variability of the external production process of these components. Reducing delivery times has also allowed to better plan the supply of production components, defining the periods for sending purchase orders. An automatic system for managing supplier orders has been activated, and it has permitted to reduce errors during the order creation and management process, having a positive effect on the consolidation of the process under consideration. Moreover, a meeting with suppliers was carried out and it has permitted to discuss and confirm together with the business partners the clauses contained in the subcontracting contract, to better plan the periodicity of reordering of components, but also internally improve the efficiency of production planning. From a quantitative point of view, the benefits will be assessed over the long term, with a careful analysis.

5. Conclusion, implications and future research directions

This study was carried out with the main objective of describing the path and dynamics of the transformation process that business organizations undertake with the aim of optimizing their profitability and competitive advantage following the profound environmental changes to which they are subject to, placing emphasis on an innovative methodology for conducting business process improvement projects, known as Lean Six Sigma, which constitutes its operating philosophy on the effective and efficient use of company resources and skills, to guarantee to the company the achievement of a lasting and defensible competitive advantage over time. Lean Six Sigma has been presented in this research as a methodology for improving business productivity, which operates through the reduction of the constraints and inefficiencies of each production and transactional process, aspiring to the maximum satisfaction of the internal and external customer and is configured as a real strategy, which offers to the human resources an innovative way of thinking and working based on training growth, data culture and the use of problem-solving methodologies that allow the improvement of quality, the reduction of costs and company complexities. In this detailed case study, the DMAIC technique was applied in a project to stabilize the procurement process of a pull-type production cell, which experienced some problems in terms of delays in supply lead times.

Thanks to the analyses carried out and the results obtained with the processing of the DMAIC phases, it was possible to highlight the potential causes of the problems that the business partner could have presented in their process of managing the supply of the production cell. Furthermore, some inefficiencies in the internal process of fulfillment of supply orders have been intercepted, the optimization of which has allowed the generation of an automatic system for sending supply orders, coming directly from the production line; a small tweak that will undoubtedly have a positive effect on the consolidation of the process under consideration, as the purchase department will be able to both keep order fulfillment under control and develop a more efficient measurement of business partner performance indicators.

With the development of the project, it was possible to structure the initial guidelines for the subsequent in-depth analysis of the critical issues identified. In particular, for the stabilization of the entire process, Schnell S.p.A. will have to develop an intense relationship of collaboration and mutual growth with his supplier to identify and implement the best solutions to the variability of the supply order fulfillment process.

The practical implementation of the Lean Six Sigma project confirmed the validity and power of the principles professed by this improvement methodology: the importance of customer orientation and the elimination of waste of resources; the value of a work team and the continuous search for qualitative and quantitative data that support and facilitate the decisions of each member of the group.

It was particularly fruitful to discover how collaboration and involvement within an LSS working group amplifies the skills and knowledge of each participant and generates a widespread climate of enthusiasm and strong determination for continuous improvement in every area, both at work and personal level.

Another practical implication that emerged from the study was the high importance to be attributed to the process of measuring company performance. From a consistent database and their level of reliability, it is possible to identify important opportunities for improvement and savings in terms of company resources; the data make it possible to highlight significant problems and inefficiencies, otherwise not recognizable, which are the result of high company costs that impact on company profitability.

The research shows how Lean Six Sigma can offer companies high advantages in achieving the highest quality in the value creation process, however, to ensure the successful success of projects, the desire for change must arise from the depths of top management; it will have to assume the role of promoter of the LSS culture and philosophy, so that the tools of the methodology are effective in managing and guiding the improvement and transformation actions, one step at a time, with rigor and discipline, but with the involvement of all own resources, with the greatest possible efficiency and effectiveness.

The main limitation of the study derives from the qualitative methodology adopted, that while it permits to analyze in depth and broadly all the phases of implementation of the LSS in the company, highlighting the difficulties encountered during the activities and the benefits obtained, these results should be integrated with an analysis on a large sample of companies that have developed similar projects to be more generalizable. Future research should be oriented on developing a quantitative analysis on LSS implementation. In any case, a qualitative study of this depth can give ideas for improvement and development for companies similar in structure and dimension to Schnell S.p.A.

Gantt Chart of the project

Project charter

SIPOC diagram – supplier, input, process, output, customer

Flow Chart: Diagram of the procurement process through the Kanban system

Value stream mapping of the procurement process of the In-Lining line with Kanban system

Population stratification

Graphical summary statistical analysis of Lead Times recorded in the period 01/01/2018–31/10/2019. Population with numbers N  = 74

Graphical summary statistical analysis of Lead Times recorded in the period 01/01/2018–31/10/2019. Population with numbers N  = 70

Frequency of deliveries with centered and delayed lead time (a) and boxplot lead time (b) for sub-category

Frequency of deliveries with centered and delayed lead time (a) and boxplot lead time (b) for sub-category type

Composition of the project team

Project risk analysis

Project risk and calculation of the Risk Priority Index

Process sigma calculation

Report of the performances analyzed in the period November 2018–October 2019

Five why matrix

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Acknowledgements

The authors acknowledge Schnell S.p.A. for supporting the research providing the data that allowed the realization of the case study.

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Case Study | Project Management for Industrial Manufacturer

Industrial Manufacturer

Industrial Manufacturing

CONSULTANT ROLE

Project Manager

The Challenge

Refine Project Management Workflows

The client, a leading German industrial manufacturer, sought a project manager to refine the workflows of the Lifecycle Management Platform.

Role of Consultport

Consultport proposed 2 candidates within 24 hours. The client interviewed both candidates and selected a former consultant at Roland Berger with a specialization in PMO consulting and prior experiences working in several large German manufacturing companies. The project manager started working with the client 48 hours after the initial request.

Well-rounded Assessment

The project manager conducted process analysis to assess existing practices for project planning, resource allocation and risk assessment. He also performed stakeholder mapping to gain insights into roles and expectations of key stakeholders. Through the assessment, the project manager identified gaps in the current project management practices.

Improving Project Management Structure

The project manager proposed a refined project management structure with distinct workflows, clearly outlining goals and responsibilities for global and regional teams. Responsible for leading four agile teams, the project manager ensured regular exchange between business and IT teams to align priorities and tasks. 

The project manager also developed clear guidelines for selecting project steering committees and designed standardized communication practices to enable efficient collaboration between key stakeholders. In addition, internal workshops were held to educate team members on the new project management practices.

Optimized Project Management

With the refined project management practices, the client enjoyed streamlined workflows, improved resource allocation and enhanced stakeholder engagement, resulting in on-time project delivery.

Refined Project Management Structure

Enhanced Stakeholder Engagement

On-time Project Delivery

It was a pleasure collaborating with the project manager. His project management approach was invaluable in meeting our project goals and timelines.

Head of Digital Platforms of Industrial Manufacturer

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