Aerospace & Defense Case Study
Ceradyne, Inc.
Ceradyne, formed in 1967, develops, manufactures and markets advanced technical ceramics for defense, industrial, automotive/diesel and commercial
applications, including ceramic armor for military personnel and vehicles. In recent months, Ceradyne’s body armor products have been widely publicized
for saving many military personnel lives. Customers include the U.S. Department of Defense, Lockheed Martin Missiles and Ford Motor Company. The
company employs more than 400 personnel at two Irvine, California locations. Annual sales in 2002 were $61 Million.
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“Sales have now increased 65% and productivity
25% due to CMTC’s “hands-on” expertise and
deep commitment to our success.”
Al Gerk
Director of Operations
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Issue/Needs
In 2003, as the conflict in Iraq continued to escalate, demand for Ceradyne
products increased dramatically. In order to meet the high volume of
demand, Ceradyne needed to rapidly identify ways to increase production
and address the capacity issues. Addressing these issues would allow
Ceradyne to increase revenue and meet the demands of their customers.
Implementation Highlights
CMTC’s team of consultants recommended starting the hands-on implementation
of Lean Manufacturing with a core Lean program called ‘5S’.
The goal of the 5S approach is to establish an effective workplace with
well-organized and standardized work procedures. These processes are
designed to improve efficiency, work organization, quality, safety and
housekeeping by using the 5 methods of Sort, Set in Order, Shine,
Standardize, Sustain, and a new addition by Ceradyne, Safety. With the
collaboration of Ceradyne personnel, CMTC designed and facilitated a
program that included a combination of classroom training and hands-on
implementation in the production areas. Tasks included Sort to eliminate
unnecessary items from the workplace; Set in Order to focus on efficient
and effective storage of tools and materials; Shine to thoroughly clean the
work area; Standardize to implement best practices in the work area; and
Sustain, a critical part of the program that deals with maintaining the
improvements. At Ceradyne’s request, a special emphasis on Safety was
added, thus making the program ‘5S+Safety’. A major success of the program
was that Ceradyne formed teams in the production areas that took
ownership of the processes.
Improvement Description
The 5S implementation proved successful and created a new line of
production procedures that reaped benefits with an increase in productivity,
along with better operations and working environment. By increasing
production levels and maximizing capacity, Ceradyne was able to meet the
increased demand and deliver its products on time and on budget.
Subsequently, the 5S approach improved job efficiency while defining a
new set of health standards and better work environment.
Financial and Investment Impact
Results in the Hot Press department firmly established the benefits of
5S+Safety when productivity increased by nearly 25% within the first 3
months after implementation. The 25% increase in productivity translated
to a 65% sales increase and a 14% increase in employees due to the
successful deployment of 5S technique. These benefits are expected to
continue in the Hot Press area and expand into the other production
areas as 5S+Safety becomes a standard for manufacturing at Ceradyne.
Cost savings from the three major production areas currently using
5S+Safety have been projected by Ceradyne management to exceed
$900,000 annually.
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