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Transforming an unprofitable product to a profitable one
Posted on April 28th, 2017 by Matt Weber in Chemical Manufacturing Excellence
An agricultural and herbicide company had a product in their portfolio that was struggling. The solvent had been losing market share and its negative margin had attracted the attention of management. If manufacturing costs could not be reduced, then the company would likely need to stop making the product. They needed a solution quickly.
The paper “Solution Story: Turning an Unprofitable Product into a Profitable Product “ introduces us to Jorge Martin*, a process engineer who needed to cut the solvent’s manufacturing costs by improving an inefficient production process. In short, the product was taking too long to make and required too much energy. Martin targeted the stripping process as the key step in reducing energy costs. And to optimize it, he knew he would have to calculate the enthalpy of the pure and mixed components in the solvent as well as the plant’s heat capacity. These calculations would give him insights into how to produce steam more efficiently and reduce wasted energy.
Martin used Knovel to find data on the key substances used in the solvent’s stripping process. With Knovel’s search feature, he quickly found many references to the information he was seeking — and that it was much easier than looking it up in a book. Knovel provided both the data and the interactive equations that allowed him to make the feasibility calculations quickly. Martin was also able to get the data he needed to calculate an optimized level for the plant’s total heat capacity. Once all the calculations were complete, Martin and his team were able to develop a new, optimized model for the stripping process.
By relying on Knovel, Martin and his team were able to reduce cycle time by 32%. This in turn reduced conversion costs, resulting in overall manufacturing process improvement and reduced the product’s standard cost by 23%. This then allowed the sales team more flexibility in negotiating prices with customers. As a result, sales increased, the company maintained its competitive footprint in the market and the solvent began generating profits.
Read the case study to learn more.
*Name has been changed to protect rights to innovation
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