Ergonomics, Efficiency, and Cost Savings

Small Manufacturing Example

Dan MacLeod

www.danmacleod.com

July 25, 2006

Introduction

This case example is based on the financial benefits over a 10-year period at a small die cast operation in central Ohio.  Its products are electrical components of the sort that could easily be relocated to Mexico or China.

Currently, this facility has incorporated more ergonomics improvements per capita than most other facilities that I am aware of.  In fact, it is difficult to spot any employees in the classical bad working positions like bending down to get parts or reaching overhead.

The plant also has a very nice success story in terms of costs and benefits.  Undoubtedly, these effects have occurred throughout many operations, but the advantage here is that this facility is small, i.e., only about 100 employees.  As is often true, causes and effects are more visible in small facilities and plant-wide successes easier to document. 

Summary Costs and Benefits

Breakdown of Benefits
 
   

Comments on graphs

The plant produces electrical fittings and has a large die cast operation.  Total pounds of zinc cast per employee in this case is a good measure of productivity.  The actual numbers are:

1995       10,100 lbs     200 employees

2006         7,800 lbs     100 employees

The absenteeism and turnover reductions are related in part to other factors, primarily the economic downturn in the past number of years.  However, one of the work areas with the highest absenteeism and turnover was in the hot die cast building and involved repetitive lifting of heavy loads.  These rather undesirable jobs were among the first to be addressed.

Breakdown of Costs and Benefits

More details on the specific improvements are provided on the next few pages, but the summary costs and benefits can be summarized roughly as follows:

Investment Costs

Hopper Loading Systems (2)                               $120,000

Packing Stations (17)                                               42,500

Tumbling Material Handling System                        330,000

Total One-Time Costs                                 $492,500

Annual Savings

Labor                                                               $1,200,000

Workers’ Comp                                                    410,000

Absenteeism:                                                        300,000

Turnover:                                                         not available

Total Annual Benefits                            $1,910,000 +

Examples of Improvements

The equipment changes were a combination of ergonomics, lean manufacturing, and automation.  At this level, these strategies are often intertwined.  The following are brief descriptions of the most important improvements.

Packing

In the past, packing was done in a different area and the assembled products were brought to that area in bins with a forklift.  As part of a lean manufacturing strategy, the plant decided to relocate the packing into the assembly area.  To achieve this goal, the plant needed to do two things:

  1. Reduce the physical and time demands on the assembly employees by eliminating the manual loading of bins, which was accomplished by using the loading system described above.
  2. Raise the completed parts up to an appropriate work height.

Of special note, plant engineering decided that purchasing inclined conveyors was too expensive, so they built their own for roughly $400 using an I-beam, an electric motor, a belt, and a modest amount of steel supports.

                  

Above left:  Homemade, inexpensive inclined conveyor to bring products up to working height. 

Above right:  Packing station.  Features include automatic counting system, cylinders to push product boxes into position, and a two-tiered packing station to reduce arm motions when loading product boxes into shipping boxes.

Hopper Loader

The most unique innovation at this site is an automatic hopper loading system.  The tasks it replaced were the common ones of manually loading a hopper, as shown in the following photos, with strain on the arm and back.

       

This hopper loading system was conceived and built by plant personnel.  In addition to saving wear and tear on employees, it saved 5000 sq. ft. of floor space, which enabled assembly cells to be placed in a room that was otherwise too small.  Moreover, eliminating the need to load hoppers enabled efficient packing of the product in these cells. 

Parts from bins in a racking system (A) drop as needed into a conveying system (B) to a loader.  The loader runs almost instantaneously along a monorail (C) to fill the various chutes leading to machines (D).

Tumbling Automation

The final major improvement was in the tumbling portion of the die cast area.  Previously, each load of cast parts had to be lifted 12 times in the process of being tumbled.  Sketches of two of those lifts are shown here, obviously in a manner with a high risk of injury.  This area especially was a source of high workers’ compensation claims, absenteeism, and turnover. 

These tasks were automated.  Part of the system is shown in the photo below.  This system was the most expensive investment of those described here, and also yielded the highest return in savings.

Automated sorting and handling system

Other improvements

Variety of other standard ergonomics improvements, including lift tables, turntables, anti-fatigue matting, etc.

Ergonomics Synergy

“We tend now to look at ergonomics as more a part of a systems approach to continuous improvement than just a tool to improve safety.  We didn’t start out that way, but rather we morphed to that realization. 

“The lean concepts of waste and flow, the quality concept of continuous improvement, and the ergonomics concept of wasted motion/poor motions as part of the same drive for competitive advantage in cost and service excellence.  These tools and their applications are synergistic, not independent strategies!”

— Plant Manager

Comments

Standard accounting systems often have a hard time taking into account longer term perspectives as well as cost avoidance factors such as workers’ compensation costs.  Consequently, it can be helpful occasionally to take a step back and make additional calculations such as those here.

As mentioned at the outset, most plants have implemented changes that have yielded the same types of positive results.  The difference in this case is to a great extent that the plant is small and the effects of process improvements more measurable.  In large operations, there are often so many variables that it can be difficult to sort out which changes are related to which financial savings.  Additionally, in this case, virtually all of jobs in this facility have been affected, not just single work cells or departments.  So again, measurements are more meaningful than usual.

A few other positive aspects of this facility are:
  • Senior management is especially skilled in good communications with the workforce and in promoting change.
  • The engineering/maintenance team is unusually creative. 
  • The unionized workforce is involved.