Case study · Manufacturing
Control systems maker adds $1.5M annual revenue, cuts labor cost per job 51%
After a private equity acquisition, a control systems maker had sold beyond its capacity, lost track of parts and fallen behind on deliveries. USC restored warehouse control, introduced single piece flow and built a management operating system (MOS).
Results
$1.5M
increase in annual revenue
51%
reduction in monthly labor cost per job order
99%
increase in throughput, year over year
Revenue gain is annual.
The situation
After a private equity firm acquired the company, both divisions were behind schedule with no plan for delivery. Customers charged for lateness and cancelled orders, and costs were out of control.
What the assessment found
- Sold beyond capacity, with lead times up to 24 months
- Parts bought 18 months ahead lost in a warehouse run on spreadsheets
- Jobs started without all parts, leaving excess work in process (WIP)
- No standard work and little data to manage against
How the work was done
Warehouse: regain control
Set up control logs and supervisor rounds, located every part, then supported a barcode warehouse management system with cycle counts and put-away audits.
Parts: track every order
Built an order-tracking tool showing what was missing, ordered, arriving and where it sat; the company then integrated it with its enterprise resource planning (ERP) system.
$500K
in costs avoided by finding lost parts
Production: single piece flow
Time-studied the most common custom jobs to set standards and moved assembly to single piece flow.
51%
reduction in monthly labor cost per job order
Management: build the MOS
Added process monitors, leader standard work and daily action reviews so performance is measured against standards.
Lasting impact
The company gained control of its parts, built assemblies in a standard flow and ran a working management operating system. Throughput rose 99% year over year and revenue grew $1.5 million a year.
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