the case study in a nutshell
This Client is a world leader in the pot and vases manufacturing industry that experienced a sudden and drastic increase in demand, due to the global pandemic but was not ready to absorb such growth and was in an immediate need to increase the production capacity. The ideally solution would have been to have company’s operations flexible enough to generate extra capacity when needed, with a user-friendly digital tool. And that is exactly that we achieved thanks to a customized Digital Twin of the production process. The optimization algorithm increased the efficiency by up to 16.3% without any investment, decreased the complexity and the time needed for production planning, reveled the main bottlenecks and quantified the main inefficiencies.
Increase in clients understanding about possible optimal capacity and how to unlock it
We tell you a story
To design, validate and formalize a methodology in the Barcelona plant expandable to the whole EMEA region, with the following goals:
- develop an earmolds integrated EMEA supply chain, capable of up to 600k earmolds per year;
- reduce cost by 4.6 mEUR per year by improving sourcing and production effectiveness and efficiency, lowering the per full industrial cost from 13.9 to 10 EUR/unit;
- maintain/improve current Service Level
We have developed from scratch a Digital Twin in order to:
- simulate all possible future scenarios, obtaining precise calculation of lead times, service levels and saturations;
- validate the re-layout/material flow hypothesis before any intervention;
- find the optimal configuration in terms of allocated FTEs and shifts for any possible demand which yield maximal throughput.
We have also designed an OCR-based real-time digital traceability and jobs scheduling system, integrated with the existing ERP, for guaranteeing the optimal scenario in case of unpredictable demand and jobs priorities.
This client is an Italian group that has become a world leader in the pot manufacturing industry. It was established in 1955 and is a perfect combination of innovative ideas, state-of-the-art technology, style and design, intelligent manufacturing, attention to detail and ability to never be content with the objectives achieved, whilst striving towards continuous development and improvement. Now the group has five commercial branches spread around Europe and the USA and 3 manufacturing facilities located in Italy, the USA and China and handles orders that are made to stock and made to order and distributes them using single channel distribution (B2B).
As mentioned the client experienced a sudden and drastic increase in demand, due to the global pandemic. The Client was not ready to absorb such growth and tried to increase the production capacity as quickly as possible by outsourcing part of the production, with the side effect of losing the margin on the sales and introducing an extra complexity in the Supply Chain.
More specifically, these were the challenges to which the client and our team had to give a solution:
- The suddenly increase in demand (more than 30%) and the resulting difficulty for the client to cope with it
- The margin loss generated by the outsourcing of big part of the orders (Clay pots – 15%, Plastic pots – 100%) to 3rd party
- A general high inefficiencies and suboptimal planning due to manual production planning and constraints check brings
- high effort and the uncertain results generally related to The use of a traditional trial-and-error approaches to increase capacity
- Some physiological aspects linked to the supply chain flow, such as: production processes complexity, high number of unique SKUs (stock keeping units), multiple planning constrains and varying machine capabilities
- The customer's need (and will) to assess current production planning and explore different approaches to achieve optimal capacity
We have delivered and put in place our own Digital Twin to study current production process and impact of the production constrains, evaluating the capacity in different configurations. Using this user-friendly tool for future planning and thanks to the optimization algorithm on which it is based, we created a dashboard for visualizing the production during each step of the process, achieving the following goals:
- We increase the efficiency by up to 16.3% without any investment.
- We Decreased complexity and time needed for production planning by 2 working hours per day.
- We Optimized the way that products are scheduled and assigned to machines in order to maximize the throughput.
- We Digitally validated the impact of adding a new equipment before investing real money
- We Revealed the main bottlenecks and quantified main inefficiencies.