For those unfamiliar with manufacturing processes, operations are often envisioned as a fast-moving conveyor belt with workers and products in constant motion. However, if management oversimplifies its understanding of current operations, setting strategies and goals that overlook operational capacity, it can lead to severe issues such as shortages, delays, or quality degradation. Given the diverse environmental factors and complexities of manufacturing processes, driven further by the diversification of products and heightened specification demands, oversimplification is not an option.
Understanding the Context
This complexity applies to the optical industry as well, where our client faced increasing pressure to swiftly introduce a wider variety of products to the market. Beyond incremental improvements, a comprehensive restructuring of operations, including factory layout and workflow optimization, was necessary. With over 90% of its products exported to North America, Europe, and other global markets, the client aimed to proactively address diverse market demands by establishing a new plant and operational framework.
Step 1: Prioritize Make-or-Buy Decisions
Once a factory site is determined, the first step is deciding what, how much, and how to produce. Limited resources—whether personnel, time, or budget—must be directed toward core, high-value competencies. A thorough make-or-buy analysis was conducted to evaluate whether to produce materials, semi-finished goods, or finished products in-house or source externally. This process defined the necessary investments in equipment and processes, subsequently determining the required space for the new facility.
Step 2: Streamlining Material and Information Flow
After defining the production space for each process, the next step involved optimizing the flow between processes. Ideally, workflows move towards a completed product, but defects or rework can cause reverse flows. While reverse flows themselves are not inherently problematic, their overlap with regular workflows can create bottlenecks, reducing productivity. We separated regular and reverse flows and designed layouts to prevent overlap. Additionally, production orders and logistics information were aligned with these workflows for cohesive management. This approach was applied both within and between processes.
Step 3: Line vs. Cell Production – Tailored to Product and Process Needs
The traditional conveyor-based line production is ideal for high-volume, low-variety manufacturing. However, as markets have diversified, the cell production model, which accommodates varied product portfolios, has gained prominence. For the client, hundreds of SKUs were produced across two lines. By analyzing process steps for each product, we categorized operations into individual, grouped, and consolidated processes. Each process was then assigned the most appropriate production model—line or cell—to balance efficiency across the system.
Step 4: Managing Demand Variability with FGI-Based Production Planning
A stable production plan is crucial for optimized operations in the new facility. By analyzing three years of monthly sales data for each SKU, we established inventory levels aligned with seasonal trends. For major, long-life-cycle products, higher inventory levels were maintained to ensure rapid turnover, while irregularly ordered items were produced on a spot basis to meet annual demand. This pragmatic approach balanced stock availability with production efficiency.
Results and Impact
Through strategic operational optimization, the client achieved a production capacity capable of doubling assembly output within the same plant footprint. This established a robust infrastructure to support long-term vision execution. Additionally, a system for ongoing internal improvements was implemented, strengthening the client’s global competitiveness.
The client’s leadership remarked, “This initiative strategically aligned the company’s vision with process-level improvements, engaging everyone from senior management to shop-floor workers.” Team members noted, “This optimization journey has transformed 40 years of fixed assumptions about production, enabling integrated improvements from planning to purchasing, production, and shipping.”
Today, the client continues to launch premium products and operates an efficient system capable of producing diverse models with minimal additional investment. For organizations considering plant expansions or new layouts, it is essential to begin by reviewing current operations to determine what and how to optimize.
For those unfamiliar with manufacturing processes, operations are often envisioned as a fast-moving conveyor belt with workers and products in constant motion. However, if management oversimplifies its understanding of current operations, setting strategies and goals that overlook operational capacity, it can lead to severe issues such as shortages, delays, or quality degradation. Given the diverse environmental factors and complexities of manufacturing processes, driven further by the diversification of products and heightened specification demands, oversimplification is not an option.
Understanding the Context
This complexity applies to the optical industry as well, where our client faced increasing pressure to swiftly introduce a wider variety of products to the market. Beyond incremental improvements, a comprehensive restructuring of operations, including factory layout and workflow optimization, was necessary. With over 90% of its products exported to North America, Europe, and other global markets, the client aimed to proactively address diverse market demands by establishing a new plant and operational framework.
Step 1: Prioritize Make-or-Buy Decisions
Once a factory site is determined, the first step is deciding what, how much, and how to produce. Limited resources—whether personnel, time, or budget—must be directed toward core, high-value competencies. A thorough make-or-buy analysis was conducted to evaluate whether to produce materials, semi-finished goods, or finished products in-house or source externally. This process defined the necessary investments in equipment and processes, subsequently determining the required space for the new facility.
Step 2: Streamlining Material and Information Flow
After defining the production space for each process, the next step involved optimizing the flow between processes. Ideally, workflows move towards a completed product, but defects or rework can cause reverse flows. While reverse flows themselves are not inherently problematic, their overlap with regular workflows can create bottlenecks, reducing productivity. We separated regular and reverse flows and designed layouts to prevent overlap. Additionally, production orders and logistics information were aligned with these workflows for cohesive management. This approach was applied both within and between processes.
Step 3: Line vs. Cell Production – Tailored to Product and Process Needs
The traditional conveyor-based line production is ideal for high-volume, low-variety manufacturing. However, as markets have diversified, the cell production model, which accommodates varied product portfolios, has gained prominence. For the client, hundreds of SKUs were produced across two lines. By analyzing process steps for each product, we categorized operations into individual, grouped, and consolidated processes. Each process was then assigned the most appropriate production model—line or cell—to balance efficiency across the system.
Step 4: Managing Demand Variability with FGI-Based Production Planning
A stable production plan is crucial for optimized operations in the new facility. By analyzing three years of monthly sales data for each SKU, we established inventory levels aligned with seasonal trends. For major, long-life-cycle products, higher inventory levels were maintained to ensure rapid turnover, while irregularly ordered items were produced on a spot basis to meet annual demand. This pragmatic approach balanced stock availability with production efficiency.
Results and Impact
Through strategic operational optimization, the client achieved a production capacity capable of doubling assembly output within the same plant footprint. This established a robust infrastructure to support long-term vision execution. Additionally, a system for ongoing internal improvements was implemented, strengthening the client’s global competitiveness.
The client’s leadership remarked, “This initiative strategically aligned the company’s vision with process-level improvements, engaging everyone from senior management to shop-floor workers.” Team members noted, “This optimization journey has transformed 40 years of fixed assumptions about production, enabling integrated improvements from planning to purchasing, production, and shipping.”
Today, the client continues to launch premium products and operates an efficient system capable of producing diverse models with minimal additional investment. For organizations considering plant expansions or new layouts, it is essential to begin by reviewing current operations to determine what and how to optimize.