The client is an international player in the production of plastic furniture. It has a large stock of molds, partly used for in-house production (50%) and partly loaned to third party suppliers (50%). The choice of outsourcing 50% of production helped being flexible and keeping a just-in-time logic, with low inventory levels.

However, the market situation, with significant fluctuations in demand and numerous uncertainties related to the supply chain, forced the company to start an in-sourcing process for some molds. This created the need for greater visibility into mold data to guide the decision-making process.

Client needs

Balancing mold saturation. The primary need was to measure the saturation of molds, given their real - not theoretical - production capacity, avoiding decreases in time-to-market and enabling more accurate planning for new mold CAPEX. The goal was to guarantee a minimum inventory throughout the year for more strategic productions, while ensuring some more capacity in case of unexpected demand increases.

Supplier performance evaluation. Lack of data on supplier productivity and quality of service did not allow for objective performance valuation. Furthermore, lack of visibility into the value chain, was driving non-informed selection of which mold to in-source from third-party suppliers. The supplier selection was mainly guided by experience and know-how from few senior executives, who built relationships over the years with various strategic suppliers. However, retirement of some of these people and absence of database with supplier historical performances, increased the information asymmetry in the supply chain management.    

Late delivery risk mitigation. One of the most impacting risks for the business was represented by delays in the delivery of critical parts from suppliers, causing assembly lines to stop. This was resulting in decreasing OEE, time-to-market and revenue opportunities.

Solution benefits

Identify losses in performance. Through our platform the client can monitor the performance of each mold by tracking the actual cycle time. By observing aggregated data on a monthly basis, it is possible to have various insights. In general, access to outsourced mold data has made it possible to discover tooling inefficiencies, which could be addressed in order to increase productivity. Moreover, it provided critical insights for the client in-sourcing strategy

Balance saturation and identify critical issues in the supply chain. A saturation analysis was essential to reduce risks related to under capacity which, in case of demand increases, could lead to stock-outs and production stops. The analysis of mold data highlighted that, despite an average saturation rate lower than 50% in the last 6 months, some molds went close to work full-capacity in certain months. This situation typically happened in conjunction with a very discontinuous production in the adjacent months. Collecting data on capacity and saturation allowed to collaborate with suppliers in finding ways to do a better planning, avoiding unnecessary mold duplications and CAPEX increases.

Calculate late delivery risk. By analyzing mold data, the client could determine which purchase order was suffering a high late delivery risk. Furthermore, visibility into the value chain allowed to observe which supplier started working very close to the delivery deadline, exposing the client to potential risks of disruption.

Redesign the supply chain. Adding KPIs such as mold efficiency ratio, mold saturation ratio and supplier delivery risk, allowed to improve performances in managing the supply chain, boosting collaboration with suppliers. The client set the basis for enabling a better sourcing strategy, improving resiliency of suppliers and solving bottlenecks in the outsourced production.

Overall, the project resulted in a 5% increase in the mold efficiency ratio, a 30% reduction in downtimes, a 5% reduction in the cost of the supply thanks to a data-based negotiation. Moreover, the client reduces disruption in the value chain, despite the very volatile demand.

Results

-30% Downtimes
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+5% Mold efficiency
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-5% supply chain cost
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Better supply chain resilience

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