Continuous Improvement Kaizen Events Lead to Production Increase

Client Context

A global supplier of engineered cooling systems for the power generation industry faced a shortage of production capacity at its China-based manufacturing facility that produces heat exchange bundles.

The company needed to more than double production output to meet booked customer demand. Even with the planned installation of a second production line, additional improvements were required to meet capacity requirements.

During EFESO’s initial analysis, it became clear that:

• The second production line faced delays due to poor project oversight and risk management, jeopardizing on-time deliveries and increasing the risk of penalties.
• Operational inefficiencies across CNC machining, welding, surface treatment, press machine, assembly, and inventory management were limiting productivity.

Key Challenges

• Insufficient production capacity to meet growing customer demand.
• Delays in the second production line ramp-up, risking late deliveries and penalties.
• High production complexity, slowing down manufacturing processes.
• Excessive raw material and Work in Progress (WIP) inventory levels, affecting operational efficiency.

Approach & Key Success Factors

EFESO conducted a comprehensive manufacturing analysis and executed a series of targeted Kaizen events to improve productivity and reduce waste.

1. Risk & Project Management for the Second Production Line

• Implemented rigorous project and risk management structures to accelerate ramp-up and minimize delays.
• Established quality control measures to improve overall efficiency.

2. Productivity Improvement Through Kaizen Events

• Identified and executed process optimization actions across CNC machining, welding, surface treatment, press machine, assembly, and inventory management.
• Developed an outsourcing strategy for selected components to reduce production complexity and expand core manufacturing capacity.

3. Management Training & KPI Implementation

• Conducted shop floor supervisor training to enhance daily performance tracking.
• Established key performance indicators (KPIs) to monitor and sustain productivity gains.

Results

20%

Average productivity improvement, with a 57% increase in CNC machining efficiency.

50% reduction

In raw material and WIP inventory levels.

$1 million

In annualized savings, surpassing the original $620,000 target.