Cost Reduction & Improved Delivery Time For An Auto Parts Supplier

    Overview

    The SaarGummi Group is a tier 1 auto parts supplier that specializes in rubber sealing components. The Group is a global powerhouse operating in North America, Brazil, Europe, Russia, India, Korea and China. Despite being backed by a prominent manufacturer, the factory was losing over USD$2 million every month. The factory struggled to maintain a consistent standard with regular complaints on their quality and delivery services. With MTG’s expertise, the SaarGummi Group was able to reduce costs, prevent losses and improve the overall work culture. The factory managed to save approximately $50 million in 18 months by increasing its output quality and optimizing its delivery times while also reducing costs and giving employees weekly days off. The costs were also significantly reduced by minimizing redundant headcount and eliminating third-party sorting.

    Project Plan

    • Factory Location:Tennessee, United States
    • Industry: Automotive
    • Duration: 18 Months

    Challenges

    From the get-go, it was clear that the supplier would need to reduce costs immediately to even have a chance of survival. The overall morale at this facility was low as operators were working seven days a week, without time off for over 70 days. In addition, poor production control meant that they incurred high costs when expediting shipments to clients.

    Solution & Result

    MTG’s approach was to ensure that the facility follows the principles of lean manufacturing and trim excess while expanding capacity efficiently. By adopting the Kaizen approach – a Japanese concept that focuses on ‘continuous improvement’ – MTG created more efficient operations and improved productivity. Other changes included  the creation of standard work processes and factory floor layout optimization that further improved the factory’s performance. 

    Within the span of 18 months, the SaarGummi Group was able to: