Case Studies:
Step3's engagements have spanned virtually every sector in the economy and include manufacturing and service businesses. A representative sample of recent engagements follows. We believe that every engagement can be evaluated against specific operational and financial metrics. We put our name and reputation on the line every day, in every engagement.

1. Optimal Performance Management System (OPMS®)

Case Study 1

Situation:

Step3 Consulting was retained by a global supplier of integrated systems, modules and components to the motor vehicle industry to identify opportunities for increased uptime/throughput and productivity, reduced overall cost, reduced inventory and improved on-time delivery to their customers. 

Step3 Solution

In addition to a number of complementary initiatives, Step3 implemented its proprietary Optimal Performance Management System (OPMS®), including:   

• Established Roles and responsibilities to imbed expectations incorporating aspects of the management system, and conducted training and coaching to provide individuals with necessary skills based on expectations.
• Conducted Pareto and root cause analysis training with management and employees to understand and address issues impacting operational performance.
• Developed and implemented shop floor visual controls to address issues impacting performance on a real-time basis. 
• Implemented an accountability process and meeting covering Safety, Quality, Maintenance and Planning & Scheduling for the previous three shifts production, with reporting by exception based on variances to plan and corrective actions reviewed and assigned to address the variances. 
• Designed and implemented an operations database to capture departmental production, quality, downtime, and OEE data, with information automatically rolling up into daily, weekly and monthly performance reports and trend graphs.  Facilitators and Area Managers then use Pareto and trend data to ensure corrective actions are effective. 
• Trained and coached internal continuous improvement personnel to sustain and build upon successes and implemented best practices.
• Provided tools and training to Department Managers and first line Facilitators to effectively manage the floor.

The annualized savings achieved during the project were $ 4.67m.

Case Study 2

Situation:

Step3 was retained by a major packaging company to reduce overall operating cost.  The company’s margins had been eroding due to pressure from customers for price reductions in addition to cost increases from raw material suppliers.  Although the company had made operational improvements in the past, they were not successful at sustaining gains that had been made.  As a result, one of the priorities was to implement an effective management control system to ensure sustainability of improvements implemented.

Step3 Solution

• In addition to inventory management initiatives that were undertaken to reduce overall operating cost, Step3 implemented its proprietary Optimal Performance Management System (OPMS®) from Shop Floor to Corporate Management with metrics and reporting frequency adjusted to each level’s specific information needs. 
• Step3 developed and implemented shop floor visual controls to address issues impacting performance on a real-time basis, along with a shop floor reporting data base to capture lost time by reason for pareto analysis and corrective actions. 
• We implemented Accountability meetings to review performance on a daily and weekly basis and to evaluate variance from plan in addition to corrective actions implemented or required, and implemented a database for roll-up of key operating metrics at the plant and corporate level 
• We also conducted training on Pareto and root cause analysis with management and employees to understand and address issues impacting operational performance. 

During the initial projects at three of the plants, inventory levels were reduced by $5m and operating cost by $1.8m.

2. Capital Allocation Optimization

Case Study 1

Situation:

A leading Tier One automotive supplier of molded plastic parts retained Step3 to assist it in reducing capital needed to open a new facility. Step3 applied its Capital Allocation Optimization (CAO) methodology to re-examine proposed processes to reduce capital requirements for the new facility.

Step3 Solution

• Step3 utilized its CAO process on each of the five distinct product facilities to be produced in the new facility. Our team worked with operators and management to design alternative processes and simulate results to establish a best course of action.
• The alternative design had an improved workflow and was designed with the customer’s actual demand and takt time. The design was also rapidly implemented to fit the timeline of the new facility.

The savings associated with the improvements implemented by Step3 included: $1.25m in capital avoidance for planned robots and machines, $3m in planned labor savings, and a 25% reduction in planned floorspace.

Case Study 2

Situation:

A Detroit based tier-one diesel engine manufacturer retained Step3 to assist it in achieving an optimal “Greenfield” layout in anticipation of production expansion. The client planned a new facility to encompass a new product line, and Step3 was retained to evaluate opportunities to improve both the current and planned layout to minimize space requirements and capital spend.

Step3 Solution

• Step3 approached the situation using its structured Capital Allocation Optimization (CAO) methodology. The current process was fully examined and broken down to its core components. From this, alternative production plans were developed using identified core and auxiliary business processes. 

Step3 designed a layout that maximized flow, productivity, and throughput, with reduced capital requirements and future manpower estimates.

3. Business Process Reengineering

Case Study 1

Situation:

A leading plastic injection mold manufacturer engaged Step3 Consulting to assist in reducing its extended lead-times to customers in an environment where molds are manufactured to order and every product is different. Step3’s analysis identified functional communication issues within the organization and identified lead time reduction and productivity opportunities.

Step3 Solution

• Step3 Consulting’s comprehensive implementation strengthened the project planning and scheduling process from quotation to the shop floor and material flow. Distinguishing products by complexity allowed for the creation of a fast-track program, further reducing lead-times while freeing up critical resources for more complex products.
  
• Step3 Consulting’s Optimal Performance Management System (OPMS®) created performance goals, metrics, measurements, and behavioral routines that ensured the sustainability of lead-time and productivity improvements. The Step3 engagement drove a reduction in lead times of between 40 and 50%, without overtime.

Case Study 2

Situation:

A leading global air conditioning, heating and refrigeration systems manufacturer retained Step3 to assist it in reducing overall cycle time by 50%.   Step3 assessed the total production flow and identified sizeable Total Cycle Time (TCT) improvement opportunities.

Step3 Solution

• Step3 implemented linear schedule reporting, improved assembly line productivity, and developed a working kanban system for fabricated/painted parts to the assembly lines. We established metrics and measurements for manufacturing areas.
• TCT was reduced from 29.5 to 15 days within three months (a 49% reduction), which provided the opportunity to reduce finished goods inventory levels by more than $13m.  The decreased cycle time also allowed the client to respond with more flexibility in its seasonal environment.

Case Study 1

Situation:

A global broadband and mobile satellite communication company approached Step3 to assist it in improving efficiency opportunities and synergies in administrative areas that had been recognized but not realized. Step3 identified significant administrative improvements.
Step3 Solution:

• Step3 Consulting developed and implemented solutions including improved order processing and activation, structured quote assembly and tracking processes
• Provided real-time to the sales force, volume and time of day based staffing models, and customer rationalization including variable overhead per customer.

Financial savings achieved included $700,000 in productivity gains, and an additional increase in profitability of $567,000 through modifications to the business model.

Case Study 2

Situation:

An industrial pump manufacturer retained Step3 to assist it in closing a gap in the ability to process sales information throughout the product lifecycle. Post-mortem analyses were difficult to perform, but where feasible they indicated that product pricing was frequently below actual costs. Step3 assessed the factors directly affecting the processes throughout the value stream.

Step3 Solution

• Step3 defined roles, procedures, and responsibilities, included a uniform estimating and cost tracking structure that allowed project execution to the established budget.
• A series of structured phase-gate review meetings ensured that information required in subsequent project stages was complete. These phase-gate reviews clarified any particularities and exceptions, eliminated project delays and backtracking, and allowed real time tracking of cost estimates compared to actual.
• Step3 Consulting implemented the improved Estimating, Quotation, and Project Tracking at two manufacturing locations.  At each location, we secured margin improvements through reliable cost estimates and tracking, eliminating bids for unprofitable projects, and recovery of change orders.

5. Planning & Scheduling/Inventory Management

Case Study 1

Situation:

Step3 was retained by a major supplier of Polyester Fiber and Resins to reduce the level of inventory without negatively impacting customer service levels.  Although inventory levels had previously been reduced from 100 down to 71 days on hand, the inventory and associated carrying cost were still deemed excessive.  Based on an initial assessment, the primary drivers were determined to be inaccurate sales forecasts, large lot sizes due to extended changeover times.

Step3 Solution

• In order to achieve the company’s inventory reduction goals, we implemented a Pull System in conjunction with exception based forecasting. 
• Finished goods were classified as A,B,C, or D items based on annual dollar sales volume.  Min/max levels were established in relation to historical usage for each product with separate rules for each inventory classification. 
• We also implemented a process for updating the min/max levels enabling updates to occur based on automated monthly reviews.  This system is utilized to ensure optimal inventory levels while maintaining desired customer service levels.  
• A reporting structure in the MRP system was also developed to monitor and identify items and actions that fall outside the established rules. 
• During the initial project implementation phase inventory levels were reduced from 71 days down to 60 days with processes in place to achieve the goal of 45 to 55 days of inventory.  

The A items dropped $827,276 or 16%.  B items were reduced by $333,409 or 17%, and C items were reduced at a slower rate, by $175,134 or 11%. 

In order to achieve the reduced level of inventory without negatively impacting operating costs and/or customer service levels, the downtime caused by increased product changeovers had to be avoided.  A separate initiative was conducted to reduce changeover related downtime with the objective of compensating for the downtime caused by additional changeovers.  This initiative resulted in a 45% reduction in changeover related downtime, which will more than compensate for the additional changeovers.

Case Study 2

Situation:

Step3 was retained by a major packaging company to reduce overall operating cost and excessive inventory levels.  The need for change was driven by eroding margins due to pressure from customers for price reductions in addition to cost increases from raw material suppliers. 

Step3 Solution

The client engaged Step3 to reduce inventory levels and to improve overall operational performance of the company.  The following are some of the processes implemented to improve performance:

• Established forecast accuracy reporting by customer and product to evaluate and address variances in demand versus forecast.
• Established and implemented scheduling and stocking policies based on A,B,C classifications.
• Established and implemented customer order commitment policies and procedures for C items, unique items, and purchased items to reduce excess and obsolete inventory due to order changes and cancellations.
• Established and implemented supplier delivery performance metrics with feedback to purchasing and suppliers to address delivery issues.
• Increased focus on schedule leveling and attainment in addition to MRP discipline.
• Established and implemented Kanbans to more effectively manage inventory levels.
• Implemented MRP meeting and action item list to ensure all issues are followed up and addressed in a timely manner.
• Implemented audits to identify where procedures required reinforcement.

As a result of the improvements implemented in the planning, scheduling and materials management processes, inventory levels were reduced by 25% while maintaining delivery performance to the customers.

6. Supply Chain

Case Study 1

Situation:

Step3 Consulting was retained by a leading manufacturer of heavy-duty and medium-duty vehicles to perform an assessment of its parts facility to identify opportunities for increased uptime/throughput and productivity, reduced overall cost, and improved on-time delivery to the truck plants.  During the assessment, Step3 analyzed the processes from Planning and Scheduling through facility’s supply chain, and identified cost reduction opportunities in excess of $10m.

Step3 Solution

Several initiatives were undertaken through the supply chain from purchasing through shipping in order to realize the opportunities identified during the assessment. In addition to a number of productivity related initiatives, the following supply-chain focused improvements were implemented:

• Conducted an ABC analysis on raw materials and finished goods.  Established unique item numbers for A Items and determined raw material min/max levels.
• Designed and implemented Kanban process with an associated electronic signaling process for raw materials.
• Developed a production smoothing process and structure to identify and adopt equivalent and alternate routings.
• Designed and implemented an accountability processes for management of raw material levels, as expressed in days of inventory.
• Implemented an updated outsourcing process.
• Reduced slow moving and obsolete raw materials by identifying slow moving inventory by location and age. 
• Reduced inventory in outside trailers by 73.8% reducing rental cost and providing better visibility of material located at the plant.  The improvement also reduced downtime and late deliveries to the Truck Plants. 
• Analyzed staffing coverage across shifts in all areas, to determine optimal staff coverage. 
• Implemented an outside processing process and procedure to prevent negative on-hand inventory resulting in false requirements and duplicate production orders. 

As a result of the improvements implemented, annualized freight cost was reduced by $5.8m and raw material inventory was reduced by $1.65m.  The project realized total savings of $12.25m.

Case Study 2

Situation:

A tier one automotive supplier engaged Step3 Consulting to review their Supply Chain and Value Stream across four ‘maquiladora’ plants, two US warehouses, and a cross-dock facility, in addition to the corporate product engineering function. The companies profitability had been burdened by significant premium freight charges, excess and obsolete inventory, combined with poor operational and on-time delivery performance.  Step3’s Assessment revealed opportunities in:

• Planning, Scheduling, and Materials Management
• Vendor Management
• Shop Floor Processes and Procedures
• Product Launch and Engineering Change Processes
• Management Techniques
• Metrics and Reporting Structures

Step3 Solution

Step3’s focused its implementation on a pilot facility, and process improvements included:

• Standardized weekly planning and scheduling routines were established and documented to improve the timeline for providing more proactive capacity planning, materials management, and control of quantities produced in relation to customer demand.
• Increased accuracy of Materials Planning Systems and Tools through verification and clean-up of system data.
• Established a structured process for implementing and following-up on engineering changes; targeted exception reports and alerts ensured completion of all necessary tasks.
• Created the ability to reliably locate materials, and increase inventory accuracy by improving management practices and warehouse organization.
• Established and implemented process to proactively address material shortages and prevent actual stock-outs based on review of advance shipping notifications.
• Established new inventory policies aligned with customer purchase commitments, to recover obsolete material cost.
• Implemented the Optimal Performance Management System (OPMS®) from Shop Floor to Corporate Management with metrics and reporting frequency adjusted to each level’s specific information need.

Some of the performance results included:

• Reduced Premium Freight by 95% within the first two months
• Reduced exposure to excess and obsolete inventory by $4.5m for one facility
• Reduced material related downtime by 50%

7. Lean Operations

Case Study 1

Situation:

A world leader in wood preserving technologies retained Step3 to assist it in introducing Lean Manufacturing to the work force and to improve manufacturing processes in advance of a projected shift in sales. Step3 introduced Lean Operations to the company through training and by addressing identified significant reprocessing and productivity opportunities.


Step3 Solution

• Step3 identified a series of projects in the company to use as training tools and actual performance improvements.
• Our team also implemented our proprietary Optimal Performance Management System® (OPMS). The training focused upon how to perform root cause analysis and introduced new tools designed to achieve significant reprocessing reductions.
• We also led and trained client personnel in Kaizen methodologies to address productivity and down time issues.

With the direct assistance of newly trained Lean Champions, we achieved reprocessing reductions of approximately 80%, throughput increases of 10-20%, and inventory reduction of approximately 15-25%.

Case Study 2

Situation:

A global leader in tooling, engineered components and advanced materials engaged Step3 to introduce Lean principles. Step3 focused on three components of the business to launch an internal business model.

Step3 Solution

• Step3 implemented Lean principles, including improved scheduling processes, featuring a “Pull” system which uses customer demand as a signal to match production.
• Step3 also developed and implemented a consistent administrative organizational structure that eliminates redundancies and allows for the smooth deployment of strategic and tactical goals and objectives throughout the organization.
• Finally, we focused on operational improvement opportunities, capturing throughput and productivity gains associated with the elimination of non-value added processes within the various plant operations.

Our engagements achieved productivity increases of 20– 25%, setup reduction in excess of 30%, maintenance savings in excess of 15%, and inventory turns increase of greater than 50%.

8. Total Productive Maintenance

Case Study 1

Situation:

An aluminum die casting company supplying automotive and other markets retained Step3 to perform an assessment of its Michigan operation with the objective of identifying opportunities to improve manufacturing operations uptime.  The effectiveness of the maintenance system, its contents and use were evaluated to determine the types of improvements and enhancements necessary to migrate toward a predictive maintenance environment.

Step 3 Solution

Step3 implemented the predictive maintenance processes, including:

• Development of operator and Maintenance department PMs based on historical failure analysis in addition to manufacture’s recommendations with established frequencies.
• Established predictive maintenance based on breakdown history and manufacturer’s recommendations.  The predictive maintenance tasks were established based on the number of machine hours. 
• Set meter (hour) limits in the Maintenance system to generate work orders for required maintenance. 
• Established color-coding for the different oils and lubes for the equipment and tags installed on the equipment along with a map diagram of the cells indicating where the lube points are located.  Lube instructions with color codes were also created indicating the frequency and responsibility for lubrication. 

After completion of the PMs and repairs in the initial pilot Cells, the parts per hour increased by 26% and scrap decreased by 57%.

Case Study 2

Situation:

Step3 was retained by a global leader in engineered resin and fibers to evaluate their maintenance practices at three facilities as part of a larger engagement.  The company’s maintenance costs per unit produced had significantly increased amidst a change in product mix and business focus.  An assessment of the Maintenance areas identified inconsistencies in maintenance practices with some facilities outsourcing all maintenance services, while others used their own staff for most tasks.  Independent from the maintenance philosophy applied, all locations demonstrated significant productivity losses from their maintenance resources.  The poor utilization was a result of lack of proper tools to prioritize, manage, and follow-up on preventive maintenance, repairs, and capital projects. 

Step3 Solution

Step3 partnered with Wellman to focus on reducing overall maintenance costs, increasing maintenance productivity, and reducing operational downtime.  The implementation included the following steps:

• Design and implementation of a functioning work-order system; using existing IT systems and infrastructure where applicable.  The work-order system allowed for prioritization, resource management, and follow up on all maintenance related activities.
• Review and implementation of Preventive Maintenance practices.  This included reduction of frequencies where practical, and assignment of tasks between operators and technicians based on required skills. Maintenance resources are now available for tasks adequate to their skill and pay level.
• Consolidation and restructuring of maintenance departments to provide appropriate skills and coverage based on skill requirement assessment.
• Integrated maintenance reporting into the Step3 Optimal Performance Management System (OPMS®), establishing accountability for maintenance performance, and improving communication between maintenance and operational leaders.

The tools and processes implemented resulted in an overall reduction of maintenance costs by 17.5% in addition to a reduction in operational downtime. 

9. Total Quality Management

Case Study 1

Situation:

Step3 was retained by a leading manufacturer of textile products to improve overall operational performance to face increased competitive pressures from lower cost manufacturers.  The scope of the project was to increase productivity, decrease the cost of poor quality related to seconds and re-dyes, reduce lead-time, improve on-time delivery, and decrease inventory levels.   

During the assessment, many issues were identified throughout the plant from order receipt through inspection.  These issues compounded on each other resulting in seconds, re-dyes, late deliveries, extended lead-time, increased setups, and reduced productivity. 

Step3 Solution

Step3 implemented key process improvements to improve the quality system, including:

• Identification of process variables affecting scrap and rework implementation of process controls
• Establishment and implementation of quality process controls and tracking
• Establishment of metrics for reporting daily/weekly/monthly Quality performance
• Design/implementation of visual controls for product quality isssues
• Implementation of standardized processes and procedures
• Development and implementation of an Access database to capture and report defect data in each area by reason for Pareto analysis to support root cause and corrective action.
• Established and implemented a root cause corrective process based on defect data captured from the Access database.
• Developed and implemented troubleshooting guides from data collected during the project based on problems and solutions that included adjustments to process controls.
• Implemented formal shift transition meetings to review process issues affecting quality and key information that that the on-coming shift needed to be aware of in order to proactively address issues impacting performance.

During the project, defects were reduced by 30% and processes were established to continue improving the process to further reduce the cost of poor quality.

Case Study 2

Situation:

Step3 was engaged by an automotive molding company with an average scrap rate of 2%. Although scrap counts were captured in the ERP system, the overall structure was insufficient to capture root causes, issue corrective action, and establish accountability among process owners.

Step3 Solution

Step3 conducted a focused scrap reduction initiative as part of a comprehensive Lean Manufacturing Implementation. Step3 trained an internal cross-functional team in root cause analysis and corrective action methodologies. The initial focus was on the top causes of scrap based on historical data.  The team’s analysis phase included systematic trials to isolate root causes for specific defects. Organizational responsibilities were also realigned to support the activities through a more concentrated focus.  The improvements included:

• Establishing optimal equipment operating conditions with assigning responsibilities for maintaining optimal conditions
• Standardizing mold and machine settings
• Establishing and implementing a first and last piece inspection process
• Conducting training of all employees involved in the process
• Step3 transitioned leadership of the teams to client employees while supporting them through hands-on training and coaching. 

The projected results included a 25% reduction in scrap.