IMPROVEMENTS FOR WELDING PRODUCT AND PACKAGING
IMPROVEMENT FOR HIGH VOLUME PRODUCT
*Case studies have been anonymized for client confidentiality
A team of five people from a major Midwestern manufacturer of welding equipment joined together with a team of expert business strategists. The goal? To reduce the cost of one of their “heart-of-the-line” products – a welding rod. Specifically, their goal was to find any savings that could help prevent the loss of market share to an off-shore manufacturer. In addition, the president gave them a second special goal: “Any change you consider… must either maintain or improve the quality of the product”.
Through the agile Value Analysis process, twenty-seven ideas were considered. After evaluation, nine were not cost effective and fourteen still required work. Finally, four were presented to management as implementable solutions. The results of these four ideas, created dramatic spin-off savings to other products their line. These results are shown in the table below. Additionally, two key faults with the packaging were resolved, and two innovative ideas for product improvement were initiated.
The team stated at the end of the project that because of the intensity and depth of the discussions presented throughout the process of Value Analysis, (also known as Value Engineering) they got the equivalent of a master’s degree in metallurgy. The team proposed the savings shown below to the president and his executive staff. The Value Study was considered a success by the client, who subsequently scheduled two more projects.
Their unique goals were set and the team was guided by an experienced business strategy consultant. The Value Analysis team embarked on the process of product improvement for the next two months. To minimize the effect on their regular work routines, the Value Analysis project was broken up into one, two, and three-day nonconsecutive sessions. The teams spent eight full days, plus 20% to 30% of their time between sessions, investigating ideas.
The following specialties were chosen to give the team a balanced view of the product: a process engineer, the manager of finance, the marketing manager, a purchasing agent, and a development engineer.
Results of the Welding Rod Value Analysis Study:
|1 YEAR SAVINGS||3 YEARS|
|ITEM||GROSS||INVESTMENT||NET SAVED||NET SAVED|
Using Value Analysis, guided by an experienced business strategy consultant, a company can reduce overhead, and improve a product in the process.
The typical guidelines are as follows:
Adjust PrioritiesAdjust the company’s priorities to allow time for the study
Establish the team based on the “right people”, not on whoever is available
Establish a specific, measurable, numerical goal to work towards
Get your customer to provide feedback and be involved in the changes
Fix all serious faults identified by your customer and team
OTHER PRODUCT IMPROVEMENT PROJECTS: