University of Tennessee

Redefining the Capacity Utilization Process

CHALLENGE: Continual improvement requires real-time results. For manufacturers, having instant access to real-time production line and machine performance data is particularly important in optimizing capacity utilization, that is, the relationship between what is produced and what could be produced if capacity was fully used. Professional MBA (ProMBA) student Matthew Bouvia, a senior industrial engineer at Edgewell Personal Care Company, was part of a team tasked with aggregating capacity utilization measures. The company’s current process was laborious and yielded dated results. The team had brainstormed ways to improve the process, and being part of the ProMBA program gave Bouvia the time, support, and opportunity to address the issue while still working fulltime.

PROJECT: Bouvia’s Organizational Action Project focused on automating and standardizing data collection and analysis to improve capacity utilization.

PROCESS: Bouvia says while he knew that automating the process would be the best solution, the multidisciplinary Professional MBA program equipped him with the tools to make his idea a reality. “I come from an engineering background, so the combination of classes—strategy, accounting, leadership—all worked together to help me convince leadership to make a change.” The company’s traditional process relied on manual data collection, resulting in decisions being made using data that often was weeks or a month old. Bouvia proposed working smarter, not harder, by creating a better-informed data matrix. Basically, his plan involved replacing cumbersome processes with an automated system, which can take raw data and transform it into actionable data for making informed decisions. Laying the groundwork for the plan included tasks such as hardcore coding, designing user interfaces, and inputting data from Excel spreadsheets into a computer.

RESULTS: Before Bouvia even completed the ProMBA program his project was in the testing phase in multiple plants. Global expansion is set to begin following the pilot phase. For the company, the greatest benefit of reengineering the process has been timing. Being able to quickly analyze and understand plant utilization across the entire supply chain is critical in setting operational strategy, making short-term corrections, increasing sales, reducing inventory, and adapting manufacturing capabilities to meet long-term market requirements. For Bouvia, taking the lead on the capacity utilization process project and earning his MBA, he believes, have helped position him for success. “The project provided added value to the company and definitely increased my visibility,” he says.

Eliminating a Waste and Creating Value

Two engineers and ProMBA students partnered and formed a company that works with local, state, regional and federal governments to develop and improve infrastructure and public services. It also works with private developers, architects and contractors to develop and redevelop property throughout the Southeast.

The concept for their company was to establish a competitive edge by effectively applying Lean principles within their industry. Working with faculty members, they identified and eliminated waste and created value from the customer’s viewpoint.

Since its inception, the company has grown to 15 employees and has over $3 million in revenues. A unique corporate culture has developed within the company. Human resources are ‘pooled’ and then ‘pulled’ as necessary based on the workload, and at the end of each year, profits are divided among the employees. The ownership aspect of the entrepreneurial culture was strengthened when three employees were allowed to buy stock in the company.

Improving Production Line Capacity

CHALLENGE: Aluminum is on a roll with North American auto makers. The drive to build lighter, safer, stronger, and more fuel-efficient vehicles is fueling the demand for aluminum sheet. To keep pace, aluminum manufacturers need to be ready to regularly—and nimbly—ramp up production. Scheduling to meet demand is more efficient when the entire production workforce is trained for complete interchangeability. As Professional MBA (ProMBA) student Sempangi Jones, Human Resource Business Partner at Arconic, Inc., discovered, such flexible scheduling wasn’t an option on the HotLine, the department responsible for making aluminum sheet at the Arconic, Inc. plant in Alcoa, Tennessee. Instead of being interchangeable, the HotLine department was divided into three separate mills, each requiring a unique skill set.

PROJECT: Jones’ Organizational Action Project focused on improving productivity, eliminating redundancy, and reducing costs by cross-training the hourly workers on the HotLine.

PROCESS: In his role as an Arconic Human Resource Business Partner, Jones serves several different departments, including the HotLine. To gain a better understanding of the issues facing the HotLine supervisors, crew leaders, and hourly workers, he talked directly to the people on the front lines of production. “I wouldn’t have been able to talk to our external customers without having done this MBA project,” Jones says. “Doing this helped me understand the HotLine more…the shifts, the overtime, and how the experience was different depending on where you worked.  The program helped me understand more of the other functions of the business and then apply those learnings to better talk to my management team and internal customers.”

Through his field work, Jones saw and learned firsthand how the HotLine’s three mills essentially operated as separate entities. Skills were specific to each mill, which, among other challenges, created scheduling and quality of life issues. For example, while it wasn’t unusual for employees in one mill to work four or five weekends straight, workers in the other mills had weekends off. To schedule and work smarter, Jones proposed cross-training HotLine employees in the skills needed for all three mills, and then, working with the union to create a job title and wage for the new role.

RESULTS: For management, cross-training would position Arconic, Inc. to efficiently and cost-effectively keep pace with the growing demand for automotive aluminum sheet. For employees, cross-training would increase understanding and ownership of the entire manufacturing process. “We’re not displacing people,” adds Jones. “We need those people. Our overall headcount is capped, so adjusting what we do on the HotLine would allow us to flex. It’s a smarter way to work.”

Empowering a Goal-Aligned Team

A marketing product manager for a multinational corporation engaged in commercial and residential electrical engineering technology used the Organizational Action Project component of his ProMBA to revive sales on an established product line.

Working with mentors at Haslam, the manager refocused his sales team by instituting weekly conference calls, setting goals, regularly updating forecasts and providing product education. Younger reps were assigned to mentors, and a change-averse staff became an informed, empowered and goal-aligned team.

The manager used accounting and financial tools to maximize profitability margin for each customer solution sold. He analyzed revenues, cost of goods sold and overhead expenses to understand what each component actually cost the company.

Ultimately, these techniques helped the product line realize its potential and sales met the company’s high expectations for more than four years.

Optimizing Cargo Space

A Haslam ProMBA student who also completed a Six Sigma Black Belt certification at the college reduced shipping costs for her company, which designs, manufactures, distributes and services engines.

Working with her Haslam advisor, this student achieved a half million dollars in annual savings by assembling teams from plants in the United States and Mexico to map out shipping processes. By engaging in joint problem solving, the teams created a plan to optimize cargo trailer space and ship filters and reconditioned engines together.

The student and her team reduced days in transit and implemented satellite tracking of loads. The team identified 12 spin-off projects to implement, and the student presented her project to the company’s senior leadership and in all business units.