2 min read –
How We Stopped an inefficiency worth $40 million per year
After only one visit to the customer site
Discover the story below
During a visit to a metal factory in Indonesia, we made a shocking discovery.
We were on a mission to analyze the production performance and provide recommendations.
We quickly saw major opportunities for improvement.
During four days, we spoke to 20 workers and managers, uncovering valuable insights.
We measured production cycles and asked a lot of questions.
A metal factory like this has a typical capex investment of 1 to 3 billion USD when built new.
It consists of several sections linked by different technology processes.
The environment is highly dangerous: strong electromagnetic fields, electrical hazards, extreme heat, and toxic air.
In some countries, you need a one-day training and clearance before you can enter this type of factory.
At the end of the mission, we had enough information to work on our report.
One week later, we issued a full report with lists and matrices, including:
Bottlenecks
Risk Analysis
Current status
Technical pains
Cost of solutions
Return on investment
One issue stood out among all the findings.
After several days in the factory, we noticed a 2 cm layer of metal oxide dust covering the ground.
If you don’t know, having some metal oxide dust in a factory like this is okay.
Dust always manages to leak from piping and equipment.
But 2 cm is absolutely not ok and is the consequence of abnormal material leakage.
It felt like walking on snow.
And those 2 cm were covering a significant amount of space.
90,000 square meters, to be exact.
Let’s break it down with some simple math.
That surface multiplied by 2 cm is 1,800 cubic meters.
The density of that material is 4 ton per cubic meter.
The price of that material today is about 500 USD per ton.
1,800 x 4 x 500 = 3,6 million USD
This is the $ value of the material lying on the ground.
But here’s the real problem: the factory vacuums the floor and removes the dust every month.
That means the 2 cm layer is not years of accumulation—it’s just one month of leakage!
In one year, that is: 12 x 3,6 = 43,2 million USD of wasted material.
In our mission report, we proposed a technical solution to reduce and stop that leakage.
It is an investment worth a couple of million USD “only”.
To solve a problem that loses 40 million USD per year.
40 million is below 5% of the plant’s annual revenues.
This may help explain why it was going unnoticed.
That factory has been around for 50 years.
OK, the leakage was not that bad during all those 50 years, but 10 years is a safe bet.
That’s millions of dollars lost—year after year.
Is your or your customer’s factory losing money without you realizing it?
Let’s find out together—reach out to us Cintasia for an efficiency audit today.
Time and names have been anonymized on purpose for confidentiality reasons.
PS: There is a mistake in the above calculation. It changes the number from 40 to 10 million $.
That does not change the conclusion.
If you found it or want to know what the mistake is, contact us 🙂
Source: Cintasia
Picture: Featuring Ilann Amram in the factory, walking on “snow.”