Innoven OHS

Fitweld Engineering Pty Ltd

Background Situation

A small engineering firm that has two fabrication shops on one site. The main shop builds building frames under contract while the second builds sumps for service station tank filling points. The competitive advantage of this firm is that it can trouble shoot and build to measure when difficult situations arise.

In order to meet an abrupt increase in customer demand for building frames two years ago extra resources were required in operations. This unfortunately had a negative effect on profit, which prompted the owner to engage SED Consulting to assist with business planning. Through their analysis SED Consulting identified a potential saving of 20% in fabricating costs. GOTAFE was engaged to identify the causes of the waste and report on potential solutions.

Initial Approach & Observations

Prior to any intervention into a business GOTAFE make it a practice to fully understand the business from the point of view of the owners. This requires an in depth interview process and the development of a single page (A3) report on the current state.

To identify the causes of the waste in fabrication GOTAFE personnel spent two half days observing the operations and questioning the operators and owners. The report was then updated to reflect the new information & propose solutions.

Seventeen percent of fabricating loss was identified immediately as:

Rework/remake 7%
Searching 4%
Transport 3%
Motion 2%
Waiting 1%

These losses were caused by:

Batch production and holding of a large inventory of cleats & base plates
Limited number of critical tools
Tools did not have dedicated storage positions
Work is prioritised by urgency and not planned
Problems in assembly work on building sites cause unnecessary noise in fabrication shop
Lack of systems requires management to micro manage work
Cross inspection of work fails to eliminate defects

Key Solutions

Develop a daily parcel of work and assign cleats with corresponding beam
Purchase and organise tools to reduce fabricator movement and time lost searching for tools
Remove unused tools

Key Actions

Schedule each days work for cutting the next day and fabrication the day after
Use containers to kit cleats & drawings and assign to corresponding beam
Replace workbenches with portable and colour coded tool racks
High cost tools assigned individual and portable workstation

Outcomes

17% of time loss recovered
Profit turnaround of $350,000

The business plan developed by SED Consulting also included 25% growth in the business each year. The initial focus for this project was in the building frame fabrication shop but when the fabricators in the other shop saw the benefits of the changes they started to adopt then as well. This eventually freed up half of their workshop which now provides room for a new business to be located on site. A search is now ongoing for a suitable business to purchase.

Contact GOTAFE's Manufacturing Commercial Manager to find out how to improve your business and develop your people. Call 1300 GOTAFE (1300 468 233).

Authorised by: John Bursill
Page updated on September 14, 2010 13:22 by Webmaster SK

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