Industry: Polymer

Author: Aryan Jain

Publish Date: 21 November, 2024

Introduction

This B2B polymer manufacturing company, with over four decades of experience, provides synthetic polymers such as epoxy resin, silicone, and polyurethane to clients across India, Europe, and the USA. With an annual revenue of ₹36 crore, the company sought to address challenges related to operational efficiency, manufacturing costs, and scalability.

The goal was to transition from a people-dependent model to a system-dependent one, allowing sustainable growth and enhanced operational throughput. The CEO, recognizing the need for external expertise, sought assistance from SKIL Global, a consulting firm with a strong track record of implementing lean methodologies and operational improvements in manufacturing companies.

The journey that unfolded highlights the company’s transformation. They embraced lean principles, focusing initially on optimizing manufacturing and research and development (R&D), which were identified as the key drivers of the company’s growth potential.

The Background: A Vision for Transformation

The polymer company was recently acquired by a new managing director. As a highly driven individual, he focused on improving operational output. He also wanted to achieve growth in competitive global markets. His vision was to turn the company into a leader in customized synthetic polymers. This could be achieved only by offering high-quality, innovative products at competitive prices.

This growth-oriented mindset led the new managing director to prioritize operational efficiency as a critical lever for achieving global competitiveness.

The Managing Director’s Goal

Given the dynamic nature of the synthetic polymer industry, the managing director understood two important things. What he realized was that, both continuous innovation in R&D and process optimization, were two non-negotiable factors for long-term success.

He had an ambitious goal. This goal was to transform the company from a traditional, people-driven organization to a system-driven enterprise. This enterprise would be one that could consistently deliver results, regardless of personnel changes or market fluctuations.

The Role of SKIL Global: Assessing the Current State

SKIL Global, upon being brought in by the CEO, began with a comprehensive assessment of the company’s operations. This involved engaging with leaders from every department—manufacturing, R&D, procurement, sales, and logistics. This was done to get a full understanding of how each function contributed to the company’s output and where inefficiencies existed.

Findings after the assessment 

• The process began with detailed process mapping, which revealed several bottlenecks and redundant processes, particularly in manufacturing and R&D.
• A lack of reliable data collection systems was also noted. This which made it difficult for the leadership team to make informed decisions about production levels, employee performance, and resource allocation.
• Without access to accurate data, performance tracking and identification of improvement opportunities were extremely limited.

As part of the current state assessment, SKIL Global worked with department heads and the managing director to create a list of key performance indicators (KPIs). These KPIs would serve as benchmarks for success and enable the team to track progress over time.

The KPIs were primarily focused on improving manufacturing throughput, R&D efficiency, raw material utilization, and equipment effectiveness.

Key Challenges Identified

The initial assessment revealed several challenges across the organization:

1. Lack of Data for Performance Tracking: One of the first significant challenges was the absence of any real-time data tracking for operations. Without data, it was impossible to measure the effectiveness of current processes or track improvements over time. This lack of insight made it difficult for the leadership team to prioritize changes or investments.
2. Underutilization of R&D: The R&D department was central to the company’s innovation pipeline but was operating inefficiently. The team was only able to process 2-3 R&D batches per day. This was due to poor planning, a lack of coordination between departments, and delays caused by inadequate preparation of raw materials.
3. Manufacturing Bottlenecks: In the manufacturing department, there were delays in batch production due to machine downtime, inconsistent raw material availability, and a lack of standardized procedures. Equipment utilization was low, with machines operating at only 50% capacity, further limiting production potential.
4. People-Dependent Operations: The company heavily relied on the expertise and availability of specific personnel to maintain daily operations. This dependency made it difficult to scale operations and posed a significant risk if key employees were absent or left the company.

Implementing Lean Methodologies: A Strategic Approach

To address these challenges, SKIL Global began implementing lean methodologies. This included a set of principles focused on minimizing waste, optimizing processes, and enhancing overall efficiency.

These lean principles were applied across multiple departments, but the initial focus was on R&D and manufacturing, where the greatest potential for immediate improvements lay.

1. Data-Driven Decision Making

One of the first steps was setting up a data collection system that would provide real-time insights into various aspects of operations. This involved automating data collection where possible and creating simple, manual data entry processes where automation was not feasible.

With this new system in place, the company was able to start tracking KPIs for batch production, raw material utilization, equipment downtime, and employee performance.

The introduction of these metrics provided the company with a clear baseline, which allowed the team to track incremental improvements and assess the impact of the changes being made.

2. R&D Optimization

The R&D department, a critical part of the company’s growth strategy, was identified as a key area for improvement. The department was initially processing only 2-3 R&D batches daily due to inefficiencies in raw material handling, equipment readiness, and project coordination.

SKIL Global implemented several changes to address these issues:

• Raw Material Kitting: One of the most effective changes was the introduction of raw material kitting. This involved pre-preparing the raw materials needed for the next day’s R&D batches. By having everything ready in advance, the team was able to reduce the time spent on weighing and measuring materials, leading to faster batch processing.
• Better Coordination with Manufacturing: The R&D team began coordinating more closely with manufacturing to align their project timelines with equipment availability and raw material procurement. This helped avoid delays caused by equipment being unavailable or materials not being on hand.

As a result of these improvements, the number of R&D batches processed daily increased from 2-3 to 4-5, and equipment utilization improved from 50% to 75-80%.

3. Manufacturing Improvements

The manufacturing department observed the following improvements:

• Introduction of the lean tools helped to streamline batch production and reduce machine downtime.
• Equipment maintenance schedules were optimized to ensure machines were operating at peak efficiency.
• Standard operating procedures (SOPs) were established for batch production to ensure consistency and reduce errors.

These changes not only improved production output but also led to better quality control and reduced waste.

Manufacturing throughput increased, and the company was able to meet customer demand more effectively without needing to increase staffing levels.

Financial Impact 

The financial impact of these improvements was significant. Within one year of implementing the lean methodologies, the company’s annual revenue grew from ₹36 crore to ₹42 crore—a 16.7% increase. This growth was attributed to the increased throughput in both manufacturing and R&D, as well as the reduction in operational inefficiencies.

Ongoing Engagement

The engagement with SKIL Global has now been ongoing for 1.5 years, with multiple contract extensions reflecting the company’s satisfaction with the results.

As the initial phase of improvements in manufacturing and R&D has proven successful, the managing director has shifted the focus to optimizing other areas of the business, including supply chain management, customer service, and product innovation.

Conclusion

The transformation of this polymer manufacturing company highlights the power of strategic alignment, data-driven decision-making, and lean methodologies in driving operational improvements.

The company focused on core areas like R&D and manufacturing. It shifted from people-dependent operations to system-dependent processes. This in turn led to a significant improvement in efficiency. The company also experienced an increase in revenue. As a result of which the company is now well-positioned for long-term growth in competitive global markets.

This story serves as a testament to the impact of continuous improvement and the importance of fostering a culture of innovation and collaboration across departments.

If you are interested to achieve similar success stories, write to us!

Industry: Biosimilars & Pharmaceutical Manufacturing
Buyer Persona: Quality Assurance Managers, Manufacturing Process Engineers, and Operations Directors
Author: Madhava Krishna
Publish Date: 17 October, 2024

Reducing Biosimilar Batch Failures to Improve Throughput by 5.73%

Introduction

The Pharmaceutical Biosimilar Company faced significant challenges in controlling batch failures, which led to reduced throughput and financial losses.

After implementing Lean Six Sigma methodologies, the company experienced a 5.73% reduction in batch failure rates and a financial benefit of ₹7.58 crores annually.

This case study outlines the collaboration, tools, and results achieved by optimizing their biosimilar production process.

The Story of Pharmaceutical Biosimilar Company

The Pharmaceutical Biosimilar Company is a leading player in the biosimilar market, manufacturing drugs that replicate biologic medical products. Prior to engaging with Skilglobal, the company was experiencing a high batch failure rate of 8.1%, resulting in wasted resources and lower manufacturing efficiency.

As a result, the company was struggling to meet production targets and faced increased costs. To combat these challenges, the company decided to collaborate with Skilglobal to implement Lean Six Sigma solutions aimed at reducing batch failures, enhancing detection, and preventing failures before they occurred.

Success Metric #1: Batch Failure Reduction

Before implementing SKIL Global’s Lean Six Sigma methodology, the failure rate of biosimilar batches was 8.1% (7 out of 74 batches). Skilglobal introduced a DMAIC (Define, Measure, Analyze, Improve, Control) approach to tackle the underlying issues.

Key steps included:

• Conducting a detailed Lean Value Stream Map analysis to identify bottlenecks.
• Implementing Failure Mode Effect Analysis (FMEA) to determine failure points across 341 process steps.

By enhancing controls and focusing on error-proofing (Poka Yoke), batch failures were reduced to 5.73% (7 out of 122 batches). This improvement boosted throughput significantly.

The Client Speaks:

“SKIL Global’s structured approach helped us reduce our batch failures and improve overall productivity. Their team helped us identify the key issues and apply actionable insights to improve our process efficiency.”

Success Metric #2: Financial Impact

The reduction in batch failures had a direct and positive impact on the company’s bottom line. With failures reduced by 2.37%, the company achieved annual financial savings of ₹7.58 crores. This result was made possible through targeted improvements in the detection and control of failure modes using Lean and Six Sigma tools.

Additionally, process improvements were made to reduce inventory costs and optimize overall manufacturing operations.

Success Metric #3: Training and Capability Building

To sustain the improvements, the team at the Pharmaceutical Biosimilar Company was trained on Lean Six Sigma techniques, with several members earning Green Belt certifications.

SKIL Global also provided specialized training on why-why analysis for root cause determination, which empowered shop floor operators to proactively prevent future failures.

Learning & Development Impact:

• Lean Six Sigma Green Belt certifications for key team members.
• Enhanced team capabilities in failure mode detection and resolution.

Figure 1: Tool Application Table

Overall Results

By implementing Lean Six Sigma methodologies, the Pharmaceutical Biosimilar Company successfully reduced batch failures, optimized throughput, and achieved significant financial gains. These efforts not only led to immediate operational improvements but also established a framework for continuous improvement in their biosimilar production lines.

The company continues to benefit from its improved processes, better-trained staff, and cost savings, all of which position it for future growth.

Industry: Rural E-commerce and Warehouse Distribution

Buyer Persona: CEO, OPEX, Managers, Transport HOD, CFO

Author: Madhava krishna D A

Publish Date: July 2024

Introduction

A Rural B2B E-commerce and Warehouse Distribution company operating in South India serves as a one-stop solution for all rural consumer needs, providing extensive consumer choice, multiple SKUs, and enhanced categories, all delivered to the doorstep of Kirana stores.

As the first entrant in the market, the company established 100 distribution centers across South India. Rapid expansion from 50 to 100 distribution centers aimed to meet growing demand and drive topline growth while continuously enhancing its distribution network. The company had investments to drive the expansion and now the CEO wants to make it profitable in the next 3-5 months in order to start yielding return to the stakeholders.

Need: Make the Business model profitable

Prior to working with Vilcart Solutions, rural businesses often faced challenges with inefficient and costly logistics, leading to stock shortages and delayed deliveries. The high cost of outbound logistics, which was at 2.5%, significantly affected their profitability and operational effectiveness.

To address these issues and tap into the potential for growth, businesses sought to optimize their logistical operations. By partnering with SGBS, they wanted to implement standardized logistics routes that would reduce transportation costs from 2.5% to 1.5%.

They also wished to develop a new cost management logistic model for consistent cost efficiency across all distribution centers, improving overall profitability and operational efficiency.

Why the Rural E- commerce company Chose SKIL Global (SGBS)

Customers often discovered Skilglobal (SGBS) through industry referrals, online research, and word-of-mouth recommendations from other businesses facing similar challenges in logistics.

As these businesses sought innovative solutions to optimize their supply chains and reduce costs, they came across Skilglobal’s reputation for effectively managing rural distribution through a sophisticated e-commerce and logistics platform. SGBS has even worked with other leading E-commerce companies in India

They indulged in a current state assessment to identify the gaps in the present business processes. During the activity SGBS recognized their logistics inefficiencies and high transportation costs as major obstacles to growth and profitability.

Approach to the challenge

Figure-1: Approach to problem solving

Assessment and prioritization 

SGBS approach to consulting involves the above phases. Here, we are in the phase of ‘Assess’ and ‘Prioritize’. SGBS conducted a current state assessment for the client to evaluate their existing processes and identify opportunities for improvement using lean methodology.

The summary of the assessment is outlined below. Transport cost optimization was prioritized to bring maximum impact on the profitability of the business.

Figure-2: Current state assessment summary tree

Develop the Model of profitability

The process began with identifying the factors influencing transportation costs associated with outbound deliveries from the warehouse of the e-commerce company. A significant challenge was the remote location of the Distribution Center (DC), chosen to provide employment opportunities in rural areas.

Below is the fishbone cause and effect analysis conducted during a Kaizen event with the team.

Figure-3: Cause and effect diagram

Data collection 

A data collection plan was implemented to capture information on the current performance of critical factors, identified through the cause-and-effect analysis. The following data was collected and analyzed:

• Map current routes in the Distribution Center (DC) by road distance.
• Map vehicle type to village based on road size.
• Baseline current route performance using metrics of quality, cost and delivery.
• Develop a tracking method for key transport metrics:
  • Transport cost as a percentage of sales:
    • By route
    • By DC
  • Transport sales value per trip and per kilometer.

Summary of Baseline Findings

• Transport cost exceeds 3% of sales across routes and DC.
• Route and trip planning were non-standardized.
• Vehicle allocation was based on daily sales tonnage and bill value.
• Transport sales value per trip and per kilometer was 30% lower than expected.

Brainstorming the ideas for the New efficient model

Reasons for Higher Logistic costs:

Summary of the Brainstorming Session for Proposed Logistics Model

Objective:

To develop a comprehensive and efficient logistics model that addresses current challenges and optimizes operations.

A kaizen event with the team was conducted. The brainstorming session provided valuable insights and actionable steps towards developing a more efficient logistics model.

The proposed solutions aim to reduce costs, improve route planning, and enhance overall logistics performance

Participants:

• Logistics Team
• Operations Managers
• Supply Chain Analysts
• IT Support
• External Consultants

Key Discussion Points

1. Current Challenges:

1. • High transportation costs
   • Inefficient route planning
   • Non-standardized vehicle allocation
   • Low transport sales value per trip and per kilometer

2. Proposed Solutions:

1. • Route Optimization:
     • Implement advanced route planning methods.
     • Standardize routes based on historical data and real-time traffic conditions.
   • Cost Reduction Strategies:
     • Negotiate better rates with transport providers.
     • Optimize load capacity to reduce the number of trips.
   • Technology Integration:
     • Use GPS tracking for real-time monitoring.
     • Implement a centralized logistics management system.
   • Performance Metrics:
     • Develop KPIs for transport cost, delivery time, and vehicle utilization.
     • Regularly review and adjust strategies based on performance data.

3. Action Plan:

1. • Short-term:
     • Conduct a pilot test of the proposed route optimization software.
     • Begin negotiations with transport providers.
   • Long-term:
     • Fully integrate the logistics management system.
     • Continuously monitor and refine the logistics model.

The Results

The ideas were piloted and cross deployed, here is the summary of the results:

Write to us and discover how our innovative logistics model transformed our operations, reducing transport costs from 2.5% to 1.5% of sales. This significant reduction has not only enhanced our profitability but also positively impacted our EBITDA.

Industry: Canned product manufacturing

Buyer Persona: Leaders from an Operations background e.g. COO, CEO, VP, AVP, Head of Operations.

Author: Sreedher Kadambi

Publish Date: 5 October, 2024

Introduction

The Canning company, in this case, specializes in manufacturing canned products. Its business has been growing exponentially, every year since its inception, driven by visionary leadership and total involvement of employees.

The company has been in the canned products manufacturing business for more than three decades. It operates six canning lines, running 24/7, seven days a week, throughout the year except on federal and state holidays.

We were referred to this company by someone in the CEO’s network. By applying Lean concepts, the cans-per-minute rate has improved by 30%. The credit for this achievement goes to visionary leadership and teamwork!

Lean tools and concepts provided the path for achieving continuous improvement.

The Story of the Canning Company

The Canning company, in this case, is a family-run business with over 40 years of experience in manufacturing canned meat products, for leading brands in the country. As the business continues to grow exponentially year after year, the company’s founders aspire to transform it into a professionally managed multinational organization.

The canning company is on a mission to become the world’s number-one canned product manufacturer. The company’s leadership is committed to ensuring that inefficiency does not increase with business growth.

In recent years, the company has diversified into other packaged products while maintaining its existing market leadership in canned products.

The Challenge – The current average cans per minute is significantly less than the installed capacity.

The company was facing a significant challenge: it was unable to achieve the rated capacity on its canning line.

The actual average number of cans per minute was only 60% of the installed capacity. Why? The reasons were classified into two categories:

1. Unplanned downtime – It included major machine breakdowns, minor stoppages, lack of materials, line imbalances, and short staffing.
2. Planned downtime – It included setup time and changeovers.

Another challenge was the lack of adequate and accurate data to drive day-to-day decisions and actions.

Why the Canning Company Chose SKIL Global over others

The CEO of the Canning Company learned about Sreedher Kadambi, Principal Consultant at Skil Global Business Solutions, through his network.

There were no other contenders for the job. The person in the CEO’s network, who referred Sreedher Kadambi, had known of his delivery capabilities from a previous Investment Banking assignment.    

The Silver Lining 

In 2017, the Canning Company invited Sreedher Kadambi to their facility. During this visit, Sreedher Kadambi, along with CANNING’s leadership team and front-line employees, planned a focused event to achieve the rated speed on the production line.

Together with the company’s leadership and crew, they analyzed historical data, carefully examined the reasons for unplanned downtime, and developed a plan to reach the desired efficiency.

The key idea was to predict and prevent issues rather than simply find and fix them. Critical questions were addressed to create a robust plan:

1. Determination of the demand using the TAKT time concept and identifying the bottleneck.
2. Planning for manpower.
3. Planning for changeovers.
4. Planning for material.
5. Predicting failures using past data and preventing them from recurring.

The plan was put into action. On the day of the event, the canning line achieved 30% more production than the historical average while utilizing the same resources.

This event served as a “proof of concept” for Lean, marking an “aha” moment for the company that laid a significant foundation for further experimentation with Lean tools and concepts. There has been no looking back ever since.

The Results

The engagement has continued in a full-fledged manner since 2017.  It is in its sixth year now, The CEO says:  

“You have an amazing gift of encouraging and mentoring others to see what can be and then set in motion the action to achieve it!!!!  Humbled you are part of our team!

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