Lean Plant Redesign — 40 Trailers of Hidden Inventory to 100% OTD
A Tier 1 automotive plastics manufacturer was hiding suspect inventory in 40 trailers behind the plant while running 82% OTD and spending $52K/month on expedited freight. A value stream transformation recovered $375K in hidden inventory, eliminated external trucking costs, and drove OTD to 100%.
The Challenge
Previous management had been hiding suspect material in 40 trailers parked behind the plant — the logic was simple: if the VP cannot see it, it did not happen. Meanwhile, OTD was running at 82%, expedited freight was costing $52K per month, and the plant was using aircraft and external trucking companies to move product 75% of the time.
The plant operated 37 injection molding presses (150-2,060 ton) and 3 mixed-model paint lines, sequencing finished goods for major OEM assembly plants. The operation managed 4 plants, 450+ personnel, and multi-site capacity planning.
40 trailers of suspect inventory were parked behind the facility — previous management chose to hide defective material rather than rework or disposition it. This represented $375K in unaccounted inventory plus $32K/year in trailer rental costs.
OTD was at 82% with $52K/month being spent on expedited freight — roughly 75% of shipments were using aircraft or external trucking companies instead of the company's own 3 trucks.
Sales quotes were too short given actual capacity and production throughput times — primarily due to wait times between molding and paint, as well as distribution and shipping bottlenecks.
Inventory days on hand stood at 14 days across SWIP, finished goods, and raw materials — far higher than necessary for the production volume.
Our Approach
We ran a 5-day value stream mapping sprint with a cross-functional team to map the order-to-cash process, then executed targeted kaizen sprints in each bottleneck area — molding-to-paint flow, distribution/shipping, and material handling.
Phase 1: Value Stream Mapping Sprint (Week 1)
Assembled a cross-functional team — assembly manager, planner, inside sales rep, injection molding machinist, distribution supervisor, two material handlers, and a design engineer — for a 5-day VSM sprint. Mapped the entire order-to-cash process and identified bottlenecks: wait times between molding and paint, distribution/shipping process inefficiencies, and quoting cycles that did not reflect actual capacity.
Phase 2: Trailer Inventory Recovery & DC Closure (Months 1-3)
Attacked the 40 trailers of hidden inventory. Salvaged $375K of suspect material through rework and disposition. Eliminated the $32K/year trailer rental. Evaluated and closed 1 of 3 distribution centers for $132K in annual savings. Began using the company's own 3 trucks instead of external carriers.
Phase 3: Material Flow & Kanban Implementation (Months 3-6)
Improved material flows through the plant and 60,000 SF warehouse. Implemented kanban systems for SWIP, finished goods, and raw materials. Established production staging 2 days prior to shipment. Reduced inventory from 14 to 7 days on hand. Executed multiple kaizen sprints in molding, paint, and distribution areas.
Phase 4: OTD Stabilization & Freight Elimination (Months 6-12)
With material flow stabilized, shifted all shipments to company-owned trucks. Eliminated external trucking company entirely — $102K annual cost reduction. Achieved 100% OTD through improved scheduling, reduced wait times, and production staging discipline. Eliminated $52K/month in expedited freight.
Results & Impact
OTD went from 82% to 100%, expedited freight was eliminated entirely, and the total annual savings exceeded $650K — not counting the $375K in recovered hidden inventory.
+18% improvement through VSM, kaizen, and material flow redesign
Cut in half through kanban implementation across SWIP, FG, and raw materials
From $52K/month to zero — all shipments moved to company-owned trucks
Combined savings from 15% manning reduction, freight elimination, DC closure, and inventory reduction
Additional Outcomes
“He walked in and found 40 trailers of hidden inventory that previous management had been sweeping under the rug. Within a year, those trailers were gone, OTD was at 100%, and we were shipping on our own trucks instead of paying airlines to move our parts.”
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