ATM Manufacturing Plant, Hungary-Based

Select a location, then design and launch a new facility which will take advantage of lower wages in Eastern Europe, while also utilizing a new production and test process based on Lean principles.

CHALLENGE

Select a location, secure suitable building, and build out facility for initial launch pilot of 10-per-day ramping to 40-per-day within 6 weeks and 200-per-day within 9 months. There was no initial operational presence in Eastern Europe, so we must also locate, hire, and train an entire workforce, implementing a new manufacturing and test process based on Lean principles concurrent with launch. Goal was to reduce over all production costs by 35%.

Locate, design, and launch a plant with dramatically improved cost per unit, first time quality, and on-time delivery

SOLUTION

Build out a spec building in Budapest, Hungary which offered good access to growing markets in Eastern Europe and Russia, in an EU country, and access to a large industrial workforce. Build a launch strategy based on Lean manufacturing and test processes. Hiring well and training effectively were key. Developing a plant layout that would be efficient from the beginning, but would be flexible to allow for growth and addition of additional products and production processes, was important. Creating a support team of engineering and operations resources (either existing internal or outside assistance) to determine plant layout, material, production, test and business processes, and guide worker training was critical. Before launching in the new plant, we arranged trips for core workers to train at existing plants where products were already in production. Workers were brought from existing plants to the new plant to instruct new workers in proper build and test processes during launch. We built rigorous discipline into the process from the first pilot production build, demanding excellence from unit #1. We built a continuous improvement culture from the start.

• Select location and secure facility

• Select key leaders—ex-pat and local—for facility

• Create a support team of engineers and production personnel with experience building the products planned for the facility and setting material and production flows

• Develop material supply strategies and implementation plans 

• Design plant layout for production, material flow, test, and growth

• Hire and train core workers

• Pilot production on one simple model

• Hire additional workers and ramp production to full volume on first product

• Add products and workers to ramp facility to full volume

Hiring well and training effectively are key. Developed an efficient and flexible layout to allow for future growth in products and volume.

BENEFITS

New labor cost 33% of former cost per hour. Labor productivity improved by 30% over prior method within 3 months. First time quality improved from less than 20% to greater than 80%. Delivery time to growing markets reduced by 1 week, and delivery cost reduced as well.

Labor productivity improved by 30% and all in labor cost by improved by 75% per unit. First time quality improved from 20% to 80+%.

Optio Tempore

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