Custom Urethane Improves Productivity and Profit

Profile

Location: Osceola, WI
Years in Business: Founded 1989
No. of Employees: 20 full-time

Products: casts a variety of plastic parts based on customer designs

NWMOC Projects: Flow Manufacturing Principles

Situation

Custom Urethane was growing slowly, experiencing cash flow problems, and found itself in a position where they were unable to compete in their markets and make a profit. Familiar with the Northwest Wisconsin Outreach Center (NWMOC) because of their work with another company, Dennis Johnson, President of Custom Urethane contacted the Center for more information on their Flow Manufacturing program.

Project

NWMOC staff members helped Custom Urethane implement flow manufacturing principles in its production system.  Flow manufacturing training was provided to all employees.  After this training was completed, NWMOC staff facilitated a five-day implementation program that involved employees in applying flow principles and redesigning their workplace.  Processes were flow charted and analyzed.  Managers and employees were encouraged to move from a craftsman approach to production to a flow manufacturing system.  Changes in manufacturing processes and new production line layouts were studied by employee teams.  The result was a new plant layout and the addition of a conveyor to move the molds more efficiently.  Also, NWMOC staff facilitated the implementation of a Kanban system in the plant. These changes improved worker productivity, materials flow, and oven utilization.

Projected Results

• A reduction in unit labor costs will generate savings of $104,000 as Custom Urethane increases sales by $1,000,000 in the next year
• Inventory will be reduced by $15,000
• Lead time reduced by 6 days
• Material costs reduced by $40,000 per year--this includes a $24,000 reduction in solid waste cost
• Electrical costs reduced by $5,000 per year as a result of making more efficient use of the ovens
• Floor space requirements reduced by 3,000 sq. ft.
• Employees became more open to change as they observed the benefits of the project
• The company moved from losing money to making a profit