FOCUS: Small Batch Blending Creates New Revenue – DFSS
The manufacture did not have the ability to accurately blend raw materials in small batch quantities and consequently the blended product was only sold in large batches of standard blends. When it was discovered that significant lost opportunities existed by not supplying smaller customized batches, a Design For Six Sigma (DFSS) team was assembled.
The team was chartered to understand the causes of this issue and implement solutions to ensure small batches of blended chemicals could be accurately measured and combined for this potential new market. Various DFSS tools were applied including VOC and DOE. As a results, the team:
– Developed the capability to produce custom blended formulations in quantities required by customers and the market place.
– Supplemented the current process and measurement systems in the manufacturing facility to support the increased demand.
Typically, DFSS has provided at least a one sigma gain in quality at launch over previous designs. This is a major improvement over other methodologies. Additionally, DFSS conservatively decreases time to market by at least 25%. A more typically seen reduction in time to market is 25%-40%. Cost savings due to total resources utilized, which is highly correlated to time, is in the 20%-40% range.
A new revenue stream from custom blended batches was enabled and is projected to add over $50 million in incremental revenue the first year. Additionally, engineering costs were reduced by over $200,000 annually.
* Due to nondisclosure agreements, the organization referenced in this example cannot be disclosed.