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How CMC Gained A Cost Reduction In A China Factory Without Automation [Case Study]

February 17, 2017

 by Renaud Anjoran

Girl working in paper making factory

CMC implemented process-level and organizational improvements to gain a large cost reduction in a China factory which makes sanitary products. But how was this achieved..?

How To Really Achieve A Cost Reduction In China Factory

Ask 10 Chinese manufacturers how a cost reduction is possible, and you will likely get three types of answers:

  • By automating processes and reducing the workforce
  • By relocating the facility to a less developed area or even country
  • By negotiating cheaper materials, lower wages, etc.

And what you will not hear is… work on improving processes so they consume fewer resources.

And yet, process-level and organizational improvements can reduce variable costs by 30-60% in a poorly managed factory in just 18 months, while increasing your staff engagement and making them stay for longer!

The question is… how to do it?

 

How to cut costs while engaging employees and improve quality?

How CMC Gained A Cost Reduction In A China Factory Without Automation.jpg

This is the type of results CMC gets regularly on the projects it runs in China. We have published a new case study that shows how it works:

 

>> Case Study: Cost Reduction in a China Factory <<

 How CMC gained a cost reduction in a China factory without automation Case study

What the CMC team did in 1 year in this organization can be replicated in most other manufacturing facilities.

If you are thinking of working on cost reduction initiatives and you want to try low-investment options rather than buying expensive automated equipment, this case study is for you. Keep reading and see which initiatives we implemented.

 

Cost reduction in a China factory without automation

Cost reduction in a China factory without automation

Most Chinese managers think the best way to save money is automation. In most cases this is wrong.

This case study is particularly interesting because it covers the 2 themes that come back again and again when improving a manufacturer’s performance:

  • The way work is done by operators (processes, layout, quality system…), and the training of those operators
  • The supply chain systems (purchasing, planning, inventory control, and ERP) to get office people and logistics staff to support production staff

 

This FREE case study covers the following topics:

  • A training program, followed by hands-on implementation in the form of team-based projects that led to bottom-up improvements in cost and quality, as well as strong staff engagement.
  • A strong reduction in indirect labor (most of them were based in the office and were not necessary to the running of the business).
  • An example of assembly line re-engineering that involved no automation but generated strong savings (41% productivity gains in 3 weeks) and remained in place since the workers were involved in its design.
  • A list of other major process improvements we implemented.
  • The way their planning, purchasing, and inventory control approach had to be modified and brought closer to Lean best practices.
  • The way the collection of automation was automated for a very low budget (with equipment such as bar code scanners).

 

Take action today

This is the type of initiatives that are necessary in order to have an engaged workforce working on cutting costs… and to reach great results, as shown in the case study.

Contrast that to the usual approach that consists in replacing workers by machines. Most workers actually have a brain, and an intimate knowledge of production processes. With proper guidance, they can come up with very substantial saving ideas. We have seen this over and over at CMC.

 

Are you ready to get your copy? Just click the button below to request your free download!

How CMC gained a cost reduction in a China factory without automation Case study

Topics: Cost Reduction, Management/Turnaround

Renaud Anjoran

Renaud Anjoran

15 years experience in China.
Partner, China Manufacturing Consultants.
Worked with hundreds of factories in China.
Certifications: ASQ CQE & CRE; ISO 9001 & 14001 lead auditor.
Author of well-read blog, Quality Inspection Tips.

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