Lean value chain analysis and design for global precision engineering products leader in aerospace industry

A complex multi-stage casting, machining and coating operation manufacturing precision components for the aerospace industry
Underperforming organisation and low levels of ownership for improvement
Extremely low velocity through the process, with poor yields and excessive scrap
High inventories of work in progress and finished goods
Production measures encouraging over-production
Silo mentality in operations exacerbating the WIP situation
Disaffected workforce with little interest in driving continuous improvement and no effective performance management in place

Analyse the current situation to articulate the operational improvement potential (yield uplift and inventory reduction)
Create the business case for change (P&L and cash impact)
Design a pilot to create an integrated supply chain for the largest volume product including suppliers and JV partners
Detail design of a pull model and elimination of WIP stages along the entire supply chain
Re-design of the layout and organisation to separate ‘dirty’ and ‘clean’ operations to reduce rework
Launch of a continuous improvement approach within the shop floor to tackle scrap, rework and productivity issues
Design and introduction of a cascaded performance management framework

40% reduction in inventory identified through WIP elimination
The feasibility of a 50% reduction in production lead time confirmed
10 percentage-point improvement in yield performance from closer process control
Plan to deliver £5m savings in-year agreed
Changes to ways of working implemented in pilot cells with Lean work-flow approach trialled
Programme of Lean training and continuous improvement projects implemented
New KPIs are being used to drive the performance of the value chain in place of traditional cost absorption metrics