CASE STUDY: Manufacturing Flow

A global leader in pressure-sensitive technology, self-adhesive base materials, self-adhesive consumer and office products and specialized label systems takes steps to prevent frequent production changeovers and low equipment yield rates.

The Challenge

A global leader in pressure-sensitive technology, self-adhesive base materials, self-adhesive consumer and office products and specialized label systems had a regular seasonal production demand. During the back-to-school season, demand and production doubled. In order to fill the demand during the peak season, the company built up inventories at all stages of production. This resulted in huge amounts of WIP, semi-finished and finished goods inventories. Even though the production volume of just a few products constituted a major part of the overall production volume, they did not have any dedicated production line in the plant. This caused frequent production changeovers, and, consequently, low equipment yield rates.

The Solution

Objective: KCG developed a number of quantitative tools to solve the client's problem, including the following.
  • A simulation model and a user interface for the current system to find the bottlenecks in production and identify the effects of the key parameters (number of labors, machine UEEs, etc.) in the system performance.
  • A Visual Basic-based design analysis tool to determine production cells, considering equipment capacities and demand volumes.
  • A simulation model and a user interface for the future system to find out if the proposed cell designs are feasible, and to determine the key system performance measures.
  • A production signaling and ordering systems in the proposed system.

The Results

The current system's simulation results were compared with the proposed system's simulation results. The comparison showed that, with the proposed system, the client could reduce inventory levels by more than 50% and increase fill rates by 12%, as well as decrease set-up times and material handling. The simulation results also showed that there would be $500,000 saved in labor costs due to increased productivity. Moreover, a reduction in inventory levels would further reduce unit production costs by reducing factory overhead costs.

Since 1990, KCG has helped industry leaders use proven quantitative tools and methodologies to address their toughest problems. Using simulation, econometrics, advanced forecasting, planning and scheduling, flow manufacturing and Six Sigma methodology, the company can answer your toughest questions. For more information, contact KCG, phone (858) 270-9950, e-mail , or visit .


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