Implementation of lean manufacturing on shell and tubes heat exchangers plant

Located on the industrial zone of Cassano D´adda, Lombardia, Emmegi S.p.a is a manufacturer of heat exchangers since 1975. The company started as a small manufacturer of shell and tubes heat exchangers. Nowadays, these types of products represent 10% of the earnings while air-oil heat exchangers represent the other 90%. Both products are important for the company as Shell and tubes are sold mainly to the same customers of air-oil heat exchangers, providing an advantage over their competitors. Since the beginning to 2008, Emmegi was merged to a stable European market with a demand in constant increase justifying a make to stock policy with results of 30 million euros per year. Due to the crisis in 2008, the market turned uncertain with a decreasing demand leaving Emmegi at the edge of bankrupt as it was forced to discard 5 million euros on obsolete inventories. As a recovery plan, production policy was changed from make to stock to a pull productive system in order to reduce risks and financial costs. Anyway, the company maintains the same productive line for shell and tube heat exchangers than three decades ago. Apart from that, their low profits together with their complex financial position that does not encourage huge investments on the productive line, leading Emmegi to consider discontinuing shell and tube heat exchangers production and appeal to outsourcing. In this complicated context, the thesis focuses on applying Lean Manufacturing policies in order to keep the shell and tube heat exchangers line aligned to a pull productive system, increasing profits and reducing risks. The Lean approach will imply modifications on the entire productive line by applying changes on: the productive process, layout, working stations and supply chain policies.