Case Study
PCB Manufacturer, a first-generation entrepreneur was facing issues with High COGS (Cost of Goods Sold), poor Procurement and Store Management
PCB Manufacturer
The Challenge
- Wastage of material during production
- Rework
- High COGS at 83%
- Delayed production cycle due to lack of planning
- Due to lack of maintenance of machines, breakdown cost and production loss was high (nearly 24 days cumulative in a year)
- No Stock Valuation (Raw Material / WIP / Finished)
- Off Cut count was huge at 10%
The Solution
- New and updated machines were introduced
- Semiskilled and unskilled work outsourced to labor contractor to reduce production cost
- Bulk purchase of standard material introduced to save cost of production
- Shift pattern initiated to increase production
- AHT & TAT calculated for each
- Preventive maintenance schedule created
- Stock tracking sheet is created which is base for stock valuation and procurement
- PCB designer was involved for minimizing off cuts
The Outcome
- Sales is increased by 22-25% annually
- COGS is reduced to 72%
- Net Margins increased from 8% to 15% in 8 months
- Additional products introduced
- Machine breakdown time reduced drastically to 8 days
- Dead stock or off cuts were reduced by 3%