Reducing pre-production lead time and cost through value stream mapping and the cut-to-box system: A footwear industry study

Abstract

This master's thesis explores how Value Stream Mapping (VSM) and the innovative Cut-to-Box system can enhance efficiency and reduce costs in the pre-production stages of footwear manufacturing. Conducted at a Footwear Company in Istanbul, Turkey, the study examines pre-production challenges and optimizes processes using VSM. By identifying and eliminating waste, VSM helps reduce the overall cost of pre-production, aligning with lean accounting principles. Lean accounting focuses on supporting lean manufacturing by providing accurate, timely, and understandable financial information. This helps companies to make better decisions through continuous process improvement. To address the complexities of pre-production operations, the study implements a comprehensive value stream mapping system, optimizing existing processes. Simultaneously, the Cut-to-Box system, based on cellular manufacturing, introduces innovation to warehouse layout, effectively streamlining operations. Key findings include a reduction in lead time from 21.43 days to 16.79 days (21% improvement) and significant decreases in changeover, transfer, and waiting times. Workforce optimization reduced pre-production personnel from 27 to 21. The total monthly mileage dropped from 6 km to 0.55 km, marking a 91% reduction. The study also highlights substantial cost reductions, a key aspect of lean accounting. The average cost per unit decreased by 21%, from $ 41 to $ 32. Material costs were reduced from $ 2,400 to $ 2,123 per month, and conversion costs dropped from $ 5,800 to $ 4,364 monthly. Consequently, the value stream profit increased markedly from $ 300 to $ 2,013 per month. The non-productive rate reduced from 30% to 4%, while available capacity improved from -7% to 14%. This research underscores the importance of continuous analysis and optimization in pre-production, offering valuable insights for organizations aiming for operational excellence and profitability in the footwear industry. By integrating lean accounting metrics, this study provides a holistic view of the benefits of VSM and the Cut-to-Box system in enhancing both efficiency and profitability.