Improving changeovers to increase profitability: Story of a 26% improvement

In manufacturing, improving changeovers is frequently one of the biggest levers to increase profits. Changeovers are easy to ignore because they don’t carry the emotional impact of a critical machine breakdown that causes the whole factory to grind to a halt. However, long changeovers typically represent the largest recurring source of loss in the factory, consistently draining your time and money every single day, week, and month. 

Optimizing changeovers can have a big positive impact on unit economics. Shortening changeovers gives you back that lost production time so you have more capacity to sell on your existing machines. Alternatively, control over changeovers give you flexibility to reduce batch size and increase your flexibility to respond to demand, expanding the market you can serve. 

While changeovers plague manufacturers of every size, we were recently impressed by the story of a small manufacturer who achieved tremendous impact through tackling changeovers: 

This family-owned job shop manufacturer uses 9 CNC lathes and  7 CNC milling machines to cut and finish metal pieces for the auto industry. Operators set up each machine for specific orders multiple times per day. 

Delays in changeovers from one job to another were killer for this shop. Long changeovers caused problems because as the delays added up, they frequently did not finish all jobs during the scheduled shift and had to run expensive overtime. 

They wanted to address this challenge, so they clipped Guidewheel sensors on their machines and also brought in a consultant to do a Six Sigma project for operational improvement using the Guidewheel platform. 

The first focus area was to reduce changeovers, using Guidewheel to track the duration of changeovers and run-time for every shift and machine. They were able to identify operators that have the most success with specific products, which allowed them to cross-train and improve the overall performance across the entire team. The visibility in Guidewheel also helped them make decisions about which machines allow the fastest changeover for each product. Based on this information, they designed a change over training through which operators prepare in advance a “changeover kit” including all material and tooling needed for a change of model. Lastly, they applied 5S methodology to ensure that all tools and material needed for a quick changeover have a defined location and are always visible, to avoid wasting time searching.   

In just three months, they were able to decrease lost production time during changeovers by 26%, a savings of $41,765/yr. Given the size of the shop, that is a meaningful improvement straight to the bottom line. 

Even better, the team now has the right tools through Guidewheel to ensure they can maintain the improvement into the future. Real-time visibility and alerts allow them to catch any slips, and also identify even more ways to improve. The team is using Guidewheel daily to closely monitor their operation and build even more on those savings. Every morning, the plant manager checks the OEE for each of their machines in Guidewheel. He finds out if there were unexpected problems to address them immediately. As an added bonus, gaining visibility through Guidewheel into which products are the most time-consuming to build has helped them price their products accurately. 

Their example shows how changeovers can be an opportunity for immediate wins in your journey towards operational excellence, allowing you to immediately improve profits while developing the habits that will help your team systematize excellence and data-driven decision making for the future.