Industrial Case Study
Precision Metal Products
Precision Metal Products, located in El Cajon, CA, manufactures human joint replacement components for the medical industry and has been in business
for over 25 years. Precision Metal Products employs 146 employees with sales of approximately $19,000,000.
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“Through CMTC efforts, we were able to increase
our sales by $800,000 in one year.”
Cecelia Salcido
Precision Metal Products CFO
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Issue/Needs
Precision Metal Products wanted to implement cost, inventory and
throughput improvement techniques with the goal of increasing
profitability from on-time delivery to customers from manufacturing
operations. Precision needed to find a solution to significantly reduce the
number of customers that were not receiving shipments on a timely basis.
Working closely with Precision, CMTC identified Lean Manufacturing
training and implementation as a solution strategy to this problem. The
successful implementation of such a system would rectify the problem
with existing customers, as well as assist in adding new customers.
Implementation Highlights
From December 2003 until April 2004, Precision Metal Products
worked with CMTC to deliver training and deployment activities to
achieve the company’s specified needs. CMTC facilitated the implementation
of improved process flows and cost controls through a Lean
manufacturing transformation program that included strategic consulting,
planning, training and workshops. The program provided Lean organization
of the shop, stabilization of processes and identification and elimination
of production waste through comprehensive training in both classroom
and hands-on implementation. Lean manufacturing techniques were
taught using Kaizen production improvement events. These concepts were
deployed and sustained through the involvement of cross-functional team
members at all levels of the organization over the course of the program.
Improvement Description
The successful training and implementation of the Lean Manufacturing
System provided the basis for achieving on-time deliveries, resulting in
the resolution of customer complaints which allowed the company to
retain a significant portion of their recurring sales that would have
otherwise been lost. Precision Metal Products was able to increase sales
by acquiring new customers as a result of their training and on time
performance. As a direct result of new customer acquisition, Precision
Metal Products hired additional staff to support the new growth. Lead
time, work-in-process inventory, defects and employee turnover were
decreased. Inventory turns, employee skills and profit margins were also
increased.
Financial and Investment Impact
Precision Metal Products felt that the successful implementation of the
Lean Manufacturing Program increased their competitiveness. An
increase in sales of $800,000 allowed Precision to retain 40 existing jobs
and hire 15 new employees. The company believes the program will
continue to pay dividends in customer confidence and new sales
contracts as the system matures.
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