The economic downturn brought the residential and commercial building boom to a halt virtually eliminating demand for building-related products and services. Volume is down significantly in all key markets. Retail partners are changing their assortments, consolidating offerings, and demanding price concessions. The housing glut and continuing credit crisis are likely to impact direction and opportunity for years to come.
A specialty steel building manufacturer sought to increase market share and profitability despite the looming economic crisis. Their dramatic transformation began with a focused LeanSigma transformation:
- Aggressive internalization of all key techniques throughout the entire supply chain including: vendors, product design, equipment design, new plant design, and core business processes.
- Increased operational flexibility allowed the company to hold prices and penetrate new markets. This was accomplished by creating paced flow throughout the manufacturing process eliminating the industry practice of ‘stall building’ its various components. Manufacturing lead time was reduced from six to twelve weeks to a consistent and predictable two week window. This allowed the manufacturer to better service customers by making it easier to integrate numerous last-minute customer changes into the production schedule.
- By focusing on their core business processes our client reduced building design time by 75 percent. This resulted in increased speed to market, coupled with increased velocity of product through the manufacturing cycle. The ultimate outcome was their ability to deliver product in one-quarter the amount of time of their nearest competitor—a significant competitive advantage that led to 3x growth in sales and dramatic gains in market share.
- More than five consecutive years of double digit increases in labor productivity.
- Sales and profits of their nearest competitor nearly evaporated.
One senior executive commented, “Lean is more than just a process. It is now part of our culture and has been a key to our success.”
