OMS is a family owned business and supplier of top-quality steel products for use in manufacturing in the beautiful Pacific Northwest.
They have operated in Portland, Oregon since 1956, with dedication to provide both quality products and exceptional service to their customers in the manufacturing industry.
Their goal was to realize significant savings by focusing on high impact areas over a one year period. The owner knew he would be able to improve the business’ throughput and needed Collin to help break the status quo.
Fixed and concreted machinery, dangerous manufacturing process, fixed ideas of management
Cashflow issues due to variating amounts of inventory within factory
Long setup times leading to high risk when prices are set based on market demand
Information flow to and from customer too long
We started by analyzing the current state and reviewing material flow at each position. We were then were able to establish a redesign goal based on a key strategy of “putting the steel rolls back into raw stock.” This is unheard of in the industry; once you put a 30 ton coil of steel on a line you run it. OMS does not do this now.
Their requirements were based on demand of 70 pallets per shift. They were initially able to achieve this with 3 full-time packagers. We focused on improving safety and ergonomics, reducing the space needed for the process, and reducing the number of personnel needed to meet demand. This was all possible by reducing the setup times and designing equipment to “put the steel back”. This allowed OMS to manufacturer to true demand and make available “half-coils” for other unique cutting and slitting needs.
Finished goods inventory was reduced by creating a quick changeover system and reducing lead-times. We also focused on office functions to eliminate errors, redundancies, and the waste of processing in order to speed up the flow of information. The demand for quicker responses came due to the factory putting away the steel and not occupying manufacturing time to “run the steel out.” This freed the sales staff trying to sell cut sheets that no one really wanted. Instead, they could get on the phone and get real orders for customized sheets. In the end, the customer sees the capacity and inventory for each machine and can initiate orders as needed—true order-to-demand.
We were able to perform packaging and slitting with personnel in the same area. The 70 required pallets per shift that originally needed 3 dedicated personnel could not be completed with only 2 people. OMS was able to increase capacity per shift in order to shutdown the third shift, saving the costs that went with it. Finally, the square footage of work areas was reduced by half.
These improvements allowed OMS to gain more control and stability of cashflow while matching their pricing with the movement of the commodity pricing. They were able to build a new raw material warehouse with direct rail spur, further reducing costs while increasing their ability to respond to ever smaller and more profitable orders.
This streamlining of processes, along with shorter lead-times and improved information flow, resulted in $2,968,000 per year savings for OMS.
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