Nicolet Plastics routinely looks for ways to lower costs and reduce lead times for its customers. A 3-piece part was manually assembled in annual quantities of 500K with a 6-week lead time per batch. Nicolet’s in-house automation specialist suggested a cost reduction initiative that would also decrease the lead time by weeks.
The customer had a consistent high demand for the part and manual placement of inserts posed a bottleneck for faster throughput. A fully automated process was suggested and implemented by the in-house automation team. The investment had to pay off quickly for the move to make sense. Fortunately, automation is always the right move for a high-volume part with a multi-year life cycle.
Automation was successfully implemented, and the lead time was reduced by 4 weeks for a release of 50,000 assembled parts. The automation project had just over a 1-year payback with savings of $177K per year. Since manual labor and cycle times were reduced, the piece price was cut in half. Consistent on-time delivery is another benefit of this automated assembly.
- Piece price reduced by 58%
- Total savings per year: $177,000 (500K EAU)
- Old lead time: 6 weeks
- New lead time: 2 weeks (1 wk. manufacturing, 1 wk. in transit)
- Automation ROI realized in: 12-13 months
- Consistent on-time delivery