Modifying a facility’s production footprint and optimizing its process flow can dramatically improve efficiency and output. However, without proper planning, this challenging task can create inefficiencies, cost overruns and business-killing disruptions.
Here are the principles we followed in our recent work with a national manufacturer of power supplies and lighting fixtures to plan for a facility expansion and for process improvements to optimize workflow, efficiency and scalability.
1. Define business objectives and growth strategy.
The company’s 20-30% annual growth rate necessitated a 26,000-square-foot expansion at its New England facility. Key drivers included increased production capacity for its two key lighting product lines. Decisions needed to align with future automation and lean production goals.
2. Assess facility space planning and site constraints.
The company found that its north-south aisleway was a priority for factory flow efficiency. Natural light considerations influenced warehouse and storage rack orientations. A decision to expand the flexible lighting encapsulation room positioned the facility for planned additions of more encapsulation equipment and automation.
3. Focus on process flow optimization: Minimize waste, reduce material handling, optimize movement.
The company analyzed its workflow from receiving to subassembly using process mapping. Process bottlenecks in handling long lighting fixtures and tray movement led to recommendations for portable tray carts. Shipping and receiving workflows were optimized to reduce staging clutter and improve efficiency.
4. Consider equipment selection and placement.
The company planned for a second surface-mount-technology (SMT) line but decided against powder coating due to environmental issues. They considered an automated encapsulation process. They made the decision to allocate space in the expanded facility for CNC machining.
5. Make adjustments to supply chain and inventory management.
The company improved its receiving staging area with marked floor zones, optimized rack orientations and more incoming inspection capabilities. They took steps to reduce inventory and to organize the work area, applying 5S techniques.
6. Evaluate workforce considerations and change management.
The new factory layout is designed for ergonomic improvements, such as lighter, more agile tray carts to reduce stress and strain. The company will train its teams on new workflows for the expanded facility. To promote a culture of lean implementation, they will employ kaizen events to refine their processes. They are cross-training employees in receiving, shipping, and the warehouse, documenting it in a cross-training matrix.
7. Incorporate energy efficiency and sustainability.
The company weighed the appropriate HVAC configuration for an expanded encapsulation room while exploring potential energy incentives with the local utility provider that can reduce equipment operating costs. As a lighting company, they also utilized one of their lighting design engineers to create an energy-efficient but bright lighting plan.
8. Analyze budgeting, ROI and cost control.
After first planning their expansion in two phases, the company analyzed the financials of the move and decided to opt for a single-phase final layout to minimize cost. They also decided to avoid moving expensive outsourced operations in-house after analyzing the specialized labor, environmental and equipment/tooling costs of doing so.
9. Configure regulatory compliance and safety plan.
A new compressed air system upgrade is planned to support the expansion and to anticipate future growth and automation; new factory restrooms are planned to meet OSHA capacity requirements as they grow their workforce.
10. Designate project execution and timeline management.
The executive team assigned a project coordinator to lead the expansion and move. The coordinator created a plan and is working with the building owner and internal operations to complete the building modifications and move operations with minimal disruptions. The building architect and lighting designer are working from CAD files of the final layout prepared by DPA. Kaizen events are planned to help teams refine workflows after the expansion is complete.
About the Author
Mike Beauregard
Senior Consultant, Daniel Penn Associates
Mike Beauregard is a senior consultant with Daniel Penn Associates. He is an international consultant and lecturer on the application of lean manufacturing and quality improvement techniques to manufacturing, warehousing, and distribution operations. He has held engineering, manufacturing, and plant management positions in the discrete parts manufacturing, plastics and chemical process industries. Mike is a registered professional engineer and a certified quality engineer. He is a ninth-time member of the Board of Examiners for the Malcolm Baldridge National Quality Award and served in two Connecticut quality awards as a senior examiner, team leader and instructor.