Aussie Company ASC Saves $4,000 Per Employee with Process Improvement
The company told Adelaide Now that they had achieved savings of $7.5 million since launching a new business process improvement group in 2009. That works out at over $4,000 for every employee of the company.
ASC is Australia's largest naval defence company with nearly 2,500 employees. The company began the process improvement drive in the face of worsening economic circumstances around the world, basing their efforts around lean and six sigma principles.
To begin with, ASC targeted the Collins submarine program, as this was the highest cost area of the business, and the findings shocked managers at the company.
General Manager Andy Keough said labour was identified as the first focus, as this made up a major portion of spending.
"Quite disturbingly, in August 2009, we found about 30 per cent of the time was what you would call efficient time, 70 per cent of the time was determined as lost time. We needed to determine why we were losing that time," he said.
The company found that many of the inefficiencies revealed by the program were very straight forward to fix. For instance they found that often the required tools for a job were not at the right place at the right time.
"They would get a half or a quarter of the way through the job, and all the materials required weren't there," Keough said.
Before the process improvement drive, ASC believed employees were approximately 30% efficient; after 18 months this had risen to 75%. The target is to take this to 85 per cent by the end of this year.
After this initial success, the program is being expanded, with Tim Hosking heading up the expanded drive. Hosking arrived from Ford, where he led a similar process improvement program. He now leads a team of nine people working specifically on training the ASC workforce in its principles.Continued on the next page