10% reduction of material cost in EPS production plant
BUSINESS CONTEXT
- Commodity Products competing on price.
- Material the biggest cost component to Manufacture (>40%).
- Material efficiency reduction of more than 6% per year.
CUSTOMER NEED
- Operational cost reduction to drive EBITDA gain.
- Material efficiency improvements.
- Increase in pricing competitiveness.
RESULTS
- Material efficiency improvement with over 10% reduction in plant material cost.
- Control of material efficiency drivers.
CHANGES
- Implementation of material usage standard.
- Implementation of standards on critical process parameters.
- Daily focus on deviation to material and process standards.
R&G APPROACH
- Implemented a daily product weight measurement system.
- Introduced a daily review of product weight deviations by operations management.
- Identification and elimination of root causes for product weight variation.