Future production state at Strömsholmen AB : - A singel case study analyzing the impacts of eliminating a bottleneck with a total cost perspective

Abstract: All producing companies strive to deliver high-quality products to meet their customers’ requirements, to a reasonable price. In order for the companies to stay competitive, it is important to have an efficient flow through the production and therefore continually analyze and develop their own production. The master thesis was carried out at Strömsholmen AB (SAB), a company which produces and develops gas springs and hydraulic springs. Their production is made by a machining hall and an assembly hall, with a component inventory in between. SAB has a plan to upgrade their surface treatment process, the current bottleneck in the production. The goal with the thesis is to point out the future bottlenecks and constraints, furthermore, propose improvements for a more efficient flow. To discover the improvements, three research questions were asked. The first question refers to map out the current production and map the production when the surface treatment is upgraded. The second question is about finding the next bottleneck in the production with an increased order stock. The last question refers to the finding of improvements and the effects related to the production performance. In order to fulfill the purpose and answer the research questions, a literature survey was conducted and a collection of empirical data. The literature survey provided a connection to the existing theory and the study. The empirical data consists of quantitative data which illustrates the current production, the collected qualitative data gives a more in-depth knowledge about SAB’s production. The data has been collected through observations, semi-structed interviews and documentation. The analyze was built upon the five-why method, to find the root causes in the production. The empirical data established that SAB has a complex material flow through the production and a big assortment of components. Beyond that, the surface treatment process was verified as the current bottleneck of the production. When the surface treatment was upgraded, seven percent capacity was available until next machine group will reach the capacity cap. In the analyze, the current production and potential improvements were compared with the existing theories. The study pointed out the value creating and waste steps of the production and how to adjust the flow according to the value creating and waste steps. Further on, future bottlenecks were pointed out, the bottlenecks could discourage the potential to increase the order stock. Two distinguished results could be established from the analysis. First of all, it would be suitable to implement flow shop for A product’s (stands for 70% of the revenue) components that have the same material flow and go through the same machine groups. This would reduce the production throughput time and enable lower stock levels and thereby decrease the inventory carrying cost. The second result is considering how to eliminate the future bottlenecks in the production, this can be done with either sub-contractors or balance the workload. Consequently, this will enable an 20% increased order stock from the production. In addition to these two major improvements, several other improvements were found during the study which will affect SAB’s potential to gain more profit. The improvements include investigate the quality of their data, start performing forecast and review the number of products and components.