Industrial Case Study
Okonite Cables, Inc.
Established in 1878, Okonite Cables, Inc. (Okonite) began producing electric cable, and is now the world leader in producing high quality, high voltage,
insulated electric wire and cable. Sales are primarily directed to electric utilities and high electric users in North America. Okonite is an employee owned
company, with 1,000 people nationally, and 157 people at the Santa Maria, CA site. Sales in 2003 were $300 million nationally, with $60 million coming
from the Santa Maria location.
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“We had a tremendous ROI using CMTC’s
expertise.”
W. Murphy Weirich
Mgr. Manufacturing
Engineering
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Issue/Needs
Okonite’s senior management wanted to increase operational efficiency
in order to reduce costs and increase bottom line profit by increasing its
overall machine utilization. Okonite opted to implement a setup reduction
program in order to reduce costs. The goal for this project was to enable
key Okonite personnel to effectively learn how to reduce machine setups,
implement successful measures for setup reduction and also to be able to
have coworkers teach each other the techniques.
Implementation Highlights
Beginning in May 2004, CMTC facilitated a machine setup reduction
project. Phase I consisted of classroom training on an overview of Lean
Manufacturing and Setup Reduction principles, tools and techniques.
Several trips to the shop floor took place to help everyone see how to
apply the classroom training to the workplace. Phase 2 was the facilitation
of Kaizen events (a concentrated training and implementation improvement
process) designed to demonstrate the applications of the classroom training
to reducing machine setups. The Kaizens spent two days on each
machine observing the setup, measuring and analyzing the work
performed and developing a new setup strategy that would significantly
reduce the overall setup time.
Improvement Description
Two machines were identified to be used to demonstrate the effectiveness
of the setup reduction techniques learned in the classroom: the Plastics
Line and the Tubular Strand Line. The Plastics Line was the first event
and Okonite personnel achieved a setup of 32 Minutes, compared to the
previous 56 Minutes resulting in a 43% decrease of elapsed time for this
setup and a 25% reduction of labor costs per setup. The Tubular Strand
Line was the next machine selected for setup reduction. Okonite personnel
achieved a 53 Minute setup compared to the previous 105 Minutes. This
represents a 50% decrease of elapsed time for setup. Both setup reduction
events achieved the project’s intended goal: increased machine utilization
by reducing the time the machine was not producing cable due to setups
for the next job. The corrective procedures have increased line productivity
and machine utilization and the operational skills of the employees.
Financial and Investment Impact
By using CMTC’s techniques, Okonite increased its productivity, reducing
Plastics and Tubular Strand Lines setup time by a combined 48% and set
up labor cost on the Plastics Line by 25%. These savings resulted in a
$235,310 increase in bottom line profit.
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