How Zero-Based Thinking is Driving Returns

Two months is all that it took for powerful improvements to happen at a plant that engaged in Zero-based thinking. James Battocchio is an advanced practitioner for Performance Solutions by Milliken and repeatedly sees staggeringly positive results for the clients that he works with that initiate zero-based thinking.

“When we started, my client’s baseline was 0.3 percent of sales with quality rejections. Towards the end of our improvement process, the baseline was cut almost in half—0.16 percent as a percent of sales. That’s approximately 200,000 in savings. The equipment effectiveness improvement brought on another $250,00 in savings. The plant is now on track to hit it’s first-year goal of 54% OEE,” recounts Battocchio.

Despite being difficult—even impossible—to achieve, it’s hard to argue that zero shouldn’t be the goal for metrics such as employee safety or product quality. Zero-based thinking forces companies out of the traditional approach of having an acceptable, budgeted range of failure.

ROI increased significantly for this plant during the second and third year of their Performance Solutions engagement.

“Your bandwidth—and your results—get bigger. You start doing more, faster,” shares Battochio.

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Powerful Improvements

The client has earned an overall 15 to 1 return on investment (ROI) with Performance Solutions. A manufacturer’s current condition prior to an engagement is reflected in the ROI. Some client engagements with Performance Solutions have earned returns as large as 37 to 1; no engagement has returned less than 7 to 1.

Examples of performance improvements at the packaging-products manufacturer, based on a summary of plants that have reached Phase 3, include:

  • Breakdown performance improvements from 60 to 70 percent
  • Minor stops reduced by 50 to 60 percent
  • Rework reduced by 50 percent
  • Waste reduced by 80 percent
  • Equipment changeover times reduced by 50 to 60 percent.

“Changeover times have been reduced so much, they didn’t have to add another day to their plant schedule. They’re down to a five-day week,” adds Skaggs.

Future Success

The client plants are continuing their implementations, and eventually all the facilities engaged with Performance Solutions will demonstrate that MPS is now their operating system and the way they manage. Progress is tracked through a detailed scorecard that measures MPS sustainability along with metrics specific to the organization. The aggregated tally of a scorecard triggers movement for a plant from Phase 2 to Phase 3, and decreases the frequency of Performance Solution practitioner visits — a process well under way at this client.

Read one of our case studies about ConAgra Foods

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