Lean Concepts Training Leads to Big Results
Founded in 2007, Malach Metal is a one-stop shop for designing and building custom parts. The processes used include CAD, cutting, machining, painting, and assembling. Their customers are transportation, agricultural, and heavy construction equipment manufacturers.
Malach’s focus on innovative technology and automation means it is constantly looking for new ways to streamline production processes and decrease turnaround time while maintaining quality, consistency and control. State-of-the-art design, modeling, and manufacturing technologies used by Malach help ensure that many parameters, such as fit between assemblies and formability, conform to specifications. The company also utilizes computerized system for order processing, inventory management, and production planning. The company uses of Electronic Data Interchange technology provides real-time and reliable access to customers’ schedules and time frames.
Their mission statement is, "to provide superior sheet metal products and supply chain solutions that consistently meet or exceed our customers' needs and expectations. We strive to consistently deliver the highest quality products, exemplary service and exceptional value."
Excessive and poor placement of inventory, wasted space, and poor product flow were some of the problems that Malach Metal had realized and wanted to address. Impact Dakota and Malach Metal discussed options for addressing such problems and achieving higher levels productivity of company resources.
Impact Dakota provided training in lean concepts and with emphasis on layout and material flow, point-of-use inventory and resource placement, and other concepts supporting pull/kanban system. Eight people representing various functions in Malach Metals participated. At the end of training a list problems and of action items (projects) to address were developed and different people were assigned to work on various aspects of the projects. Over a period of 10 months, the company, using its internal resources, conducted a number of projects to address the problems. Malach has achieved high levels of success and is continuing its efforts to enhance the productivity of its resources.
Cost Savings - Cost savings have resulted in multiple areas. Inventory levels are down from 6 weeks to 3 weeks, a 50% reduction. Incorporating of point-of-use concept relocating of materials and some equipment has reduced travel distances. The company is also saving money producing the same number of products with the same number of people with 80% less overtime. Getting rid of unused items and inventory has freed up about 3,000 square feet of space which is now being put to more productive use. This is an opportunity cost avoidance of $300,000.
New Investment - In support of improved quality and throughput, the company has installed air dryer and better power wash systems as well as an extra work-holding table for the laser fabrication center.
Increased Productivity - The cost savings outlined above are a result of increased productivity of resources. Improvement in layout and placement of parts/inventory has drastically reduced the operators' time search and travel time. The addition of the extra work-holding table has drastically improved the throughput of the laser fabrication center.
“With the Lean concepts, we have reduced inventory. Keeping more working capital in the bank versus on the shelf in parts. Our Inventory went from holding six weeks to, two and three weeks in certain areas.”
— Eric Lien, General Manager