Solution Area 1: OpX Strategy Formulation through Business Diagnosis
Maximize your business’s full potential by leveraging our operational excellence (OpX) business diagnosis program. This comprehensive evaluation delves into your costs, processes, and systems, identifying areas for improvement. We then provide you with a roadmap that encompasses both quick-win and long-term solutions, addressing the underlying causes of your business issues.
If your organization is currently facing any of the following problems, there may be areas within your organization’s costs or processes that can be improved through our OpX strategy formulation:
Operational excellence (OpX) diagnosis is the process of analyzing the overall costs and operational efficiency of the entire company. Its primary objective is to identify problems that contribute to high costs and pinpoint areas for improvement. By doing this, the process aims to inform the company about critical issues and offer strategies for improvement and development, ultimately leading to increased profitability.
Profit and Loss (P&L) calculation by product/line is a financial analysis that determines the profitability of each product within a business. This analysis presents valuable insights into pricing, cost structures, and product performance. It facilitates informed decision-making aimed at boosting profitability through pricing adjustments, product development, and cost-cutting measures.
Food manufacturing
Many companies create improvement and development plans by allowing each department to manage its own cost management plan. However, they frequently neglect the company’s actual long-term goals. Additionally, there is a lack of analysis regarding other environmental factors, both external (such as competitors in the same industry) and internal (such as the company’s cost structure). Consequently, the improvement and development plans fail to effectively address real needs and do not reflect the critical problems that require attention in the short, medium, and long terms.
The results of the OpX diagnosis revealed that the most critical problem lies in the layout of the production machinery, resulting in discontinuous production processes. This, in turn, has created a significant need for workers to manually move products between different points. To address this issue, LiB, the consultant, proposed a comprehensive Production Line Redesign plan. This plan not only tackles the specific issue at hand but also incorporates various operational improvements aimed at enhancing the entire production process. These improvements are designed to achieve short-term (quick win), medium-term, and long-term goals.
Upon successful completion of this project, we anticipate a remarkable 22% increase in production capacity without the need for additional machinery investment. Moreover, the number of production workers will remain unchanged, while the company’s profit is projected to surge by 6 million baht per year.
Following LiB’s thorough diagnosis of the plant, we identified the main issues affecting production capacity, namely the underutilization of production machinery and layout problems leading to discontinuous production and production limitations. In response, LiB has proposed a plan to enhance production planning accuracy and optimize the layout of the upcoming factory construction, aligning it with the maximum production flow.
Building material
The most significant problem affecting production capacity and company profits is the frequent breakdown of machinery. The root cause of this issue lies in the inadequate execution of preventive maintenance (PM) and lax adherence to inspection standards.
The OpX diagnosis has identified a critical problem related to the layout of the production machinery. This issue disrupts the production process, leading to non-continuous operations and requiring an excessive number of workers for material transportation to other points. To address this specific problem, LiB has proposed a comprehensive Production Line Redesign plan. The plan entails various operational improvements that will contribute to enhancing the overall production process of the company, covering short-term (quick win), medium-term, and long-term goals.
Upon the successful completion of this project, it is expected that the company’s production capacity will increase by 22% without the need for additional machinery investment. The number of production workers will remain the same, and the company’s profit is anticipated to increase by 6 million baht per year.
After LiB conducted a diagnosis, the most significant problem affecting production capacity and company profits was identified as the frequent breakdown of machinery. The root cause of this issue was attributed to the improper execution of preventive maintenance (PM) and lax inspection standards. LiB has recommended the development of a Technician Transformation plan as a quick-win solution. It is projected that after the implementation of this plan, the company’s profit will increase by 17 million baht per year.
Dye manufacturing
The majority of the production in this company involves large-scale machinery with substantial limitations. Upon diagnosis, it was discovered that the idle time, during which employees have to wait for machinery to work without engaging in other tasks, exceeds 60% of the working time.
The OpX diagnosis has identified the most critical problem as the underutilization of employees, with idle time reaching up to 60%. To address this challenge, LiB has proposed a plan that incorporates an algorithm-based tool. This tool will determine the optimal number of employees at each workstation in advance, starting from the production planning stage. Additionally, the plan includes strategies to tackle other company issues.
Upon completion of this project, the successful implementation of the Automated Optimal Labor Calculation Tool is estimated to reduce labor costs by over 6 million baht per year without requiring additional investment.
After a thorough diagnosis, LiB identified an opportunity to reduce the workforce through process optimization. This optimization will span from production planning to day-to-day workforce management, striving to minimize idle time resulting from machinery operations. Currently, idle time accounts for more than 60% of the total working hours. To tackle this issue, LiB has considered proposing a Production Planning System with an Automated Optimal Labor Calculation Tool, which will forecast and determine the appropriate number of workers at each workstation in advance during the production planning phase.
Food industry
Upon conducting a comprehensive analysis of the expenses for each product, one food company discovered that more than half of its top-selling products were yielding any profits. This alarming revelation has necessitated an urgent need for the company to take immediate action and reduce costs.
The OpX diagnosis discovered a significant problem demanding immediate attention. The products accounting for over half of the company’s total sales are failing to generate profits due to an inappropriate cost structure. A detailed analysis of product-specific expenses sheds light on this issue. In response, LiB has proposed a cost reduction plan that involves making adjustments to both price and usage quantities. Additionally, LiB has actively assisted in implementing quick-win cost reduction measures, resulting in potential savings of up to 10% for high-impact items. This translates to an impressive annual savings of 3.5 million baht, all within a mere month.
The company urgently needed to reduce costs. Utilizing Pareto’s 80/20 principle, LiB prioritized high-impact items and assessed the possibility of cost reduction using a price score. Subsequently, LiB implemented a cost reduction plan, leveraging its extensive database. It was able to achieve potential savings of up to 10% for high-impact items, amounting to a remarkable annual sum of 3.5 million baht, accomplished within just one month.
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