Automotive Manufacturer

Car Parts Manufacturer: Reducing Costs and Penalties through Innovation

Background

Our client is the sole manufacturer and supplier of chassis systems to major automotive OEM's.  These chassis require up to twenty-five additional separate parts, which are shipped together with the chassis to the OEM's assembly plants.
The client had a team of 18 people responsible for retrieving the parts from their warehouses and bundling them with the correct chassis in preparation for distribution. Timeliness of delivery is crucial, as any delays in delivery would cause delays to vehicle assembly, resulting in significant penalty charges to the client.

Challenge

Our client regularly incurred such charges as a result of delays to vehicle assembly, and they recognised the substantial risk to their brand reputation and relationship with their customers due to lack of reliability. These delivery issues were caused primarily by outdated working practices and a requirement to change overall culture. The department's labour cost was £730k/year, averaging £40k annual salary per man due to very high overtime required to keep up with production.

Aktrion's Solution

Our client asked us to provide a long-term solution to their chassis delivery problems.  

Aktrion replaced the existing team – who were re-trained and moved to another business area – with new and younger staff, fully employed and trained by Aktrion. Aktrion implemented a new production line-type operation, employing innovative solutions to the parts retrieval and bundling processes.

Aktrion were able to reduce the team from 18 people to 13, working two shifts down from three, five days per week down from seven, and virtually eliminating overtime costs.  Aktrion reduced the client's £730k/year labour cost to an annual charge-out to Aktrion of only £384k:  a savings of over 47%! At the same time, the client now meets 100% of their delivery times and service level agreements with their customers, thus eliminating the very significant penalty charges.