Increased Productivity & improved Quality from existing plant led to higher sales & profit
In 2005, a leading bicycle tubes manufacturer in North India experienced sharp rise in demand for its products, with the dealers wanting 10 to 15% additional supplies. But, it could neither raise production, nor install more machines because there was no free space in the plant. Also, capacity addition would take time & it would be risky to ignore dealers’ demand for that long. Moreover, capacity of extra production line would exceed expected demand - leading to under utilisation & hence higher cost per unit.
Company’s management, thus, faced a dilemma of either losing sales or making large capital investment and keeping capacity underutilised with consequential drop in profitability.
Using Industrial Engineering tools & techniques e.g. Work measurement using Video Camera, Micro Motion Analysis, Methods Engineering, Plant & Workplace layout design, work methods & practices were improved substantially, with changes made in equipment & workplace layout. Production Norms & Output Standards were established & implemented.
Monthly production increased by 22% with 16% more Output per man day.