Post-Manufacturing Plant Consolidation - Capstone Realizes Considerable Capacity and Facility Utilization Improvements in its...
February 04 2019 - 8:30AM
Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:
CPST), the world’s leading clean technology manufacturer of
microturbine energy systems, announced today that following its
manufacturing plant consolidation it has realized considerable
capacity and facility utilization improvements in its single-shift
manufacturing operations.
In November 2017, Capstone accomplished a 6-month fast-tracked
project to consolidate its corporate headquarters and two-separate
manufacturing locations into a single, consolidated, world-class
facility. The original purpose of the consolidation project was to
reduce the Company overhead and operating costs as part of an
all-encompassing plan that resulted in an over 40% reduction in
operating expenses from historical levels. Other complementary
benefits quickly became evident as the Company started
incorporating its lean manufacturing philosophies across the entire
consolidation project, achieving a significant reduction of hidden
factory costs, increased capacity and overall waste reduction.
“Due to the methodical elimination of costly waiting time and
excess handling related to two unconnected manufacturing facilities
eight miles apart, we’ve been able to realize improvements in
single-shift production capacity that significantly exceeded our
original projections,” said Kirk Petty, Vice President of
Manufacturing at Capstone Turbine Corporation. “Reorganization and
rationalization of our production process flow, using lean
methodologies and following the inputs from our very experienced
manufacturing workforce, significantly decreased our lead time
needed from new products or spare parts order-to-shipment,” added
Mr. Petty.
However, the focus on reducing operating costs and increasing
efficiency did not end at the facility consolidation. “We didn’t
stop at our property line as we are now taking the same lean
methodologies and lessons learned that worked so well for us during
our plant consolidation and employing some of those ideas to select
members in our supply base,” added Mr. Petty.
Efforts are currently underway with some of Capstone’s top value
stream partners to vertically integrate processes that have
traditionally been performed at Capstone in order to reduce costs
associated with excess handling, logistics and preventable wait
time. The Company is moving the effort and process flow to
suppliers that can better maximize efficiencies and further improve
the way things had been done for years. “Changing long-standing
manufacturing processes is never easy, but great things don’t come
from staying in your comfort zone,” added Mr. Petty.
Another example of Capstone thinking beyond its factory walls is
taking place at Capstone’s United Kingdom service facility.
Historically a static spare parts depot, it is now a fully
functioning remanufacturing, repair and engine test facility
capable of providing quality spare parts and products to European,
Middle East, and African distributors in far less time, and at a
greatly reduced cost, than it would historically take having to
ship back parts to Capstone in California for rework and
refurbishment.
“The products being manufactured and remanufactured at our UK
facility meet the same quality standards as those produced at our
U.S. plant,” stated Jeff Foster, Sr. Vice President of Customer
Service. “Through years of development and facility investments,
we’ve managed to equip, staff and outfit our UK Hub with everything
needed to perform the manufacturing tasks the growing region
requires, while shaving months off of turnaround time and greatly
reducing our shipping costs,” added Mr. Foster.
“Each of these improvements are critical elements of our
strategic initiative to grow the Aftermarket Business margins to
eventually fully absorb our operating costs,” added Mr. Foster.
Finally, in parallel with these efforts, Capstone has not lost
focus on its next challenge associated with combating rising direct
material costs, freight, and U.S. import tariffs. “Like many global
manufacturers we’ve had a challenging year combating rising costs
of some of our materials, but these challenges combined with growth
in our business have opened the doors for several new vendors to
become a part of the Capstone supply chain family,” said Darren
Jamison, President and Chief Executive Officer. “Several new
vendors are currently working their way through Capstone’s supplier
qualification process and first article quality material approval
process in order to come online as new lower cost vendors this
year,” concluded Mr. Jamison.
About Capstone Turbine Corporation
Capstone Turbine Corporation (www.capstoneturbine.com) (Nasdaq:
CPST) is the world’s leading producer of low-emission microturbine
systems and was the first to market commercially viable
microturbine energy products. Capstone has shipped over 9,000
Capstone Microturbine systems to customers worldwide. These
award-winning systems have logged millions of documented runtime
operating hours. Capstone is a member of the U.S.
Environmental Protection Agency’s Combined Heat and Power
Partnership, which is committed to improving the efficiency of the
nation's energy infrastructure and reducing emissions of pollutants
and greenhouse gases. A DQS-Certified ISO 9001:2015 and ISO
14001:2015 certified company, Capstone is headquartered in
the Los Angeles area with sales and/or service centers in
the United States, Latin America, Europe, Middle East and
Asia.
For more information about the company, please visit
www.capstoneturbine.com. Follow Capstone Turbine on Twitter,
LinkedIn and YouTube.
Forward-Looking Statements
This press release contains “forward-looking statements,” as
that term is used in the federal securities laws. Forward-looking
statements may be identified by words such as “expects,”
“believes,” “objective,” “intend,” “targeted,” “plan” and similar
phrases. These forward-looking statements are subject to numerous
assumptions, risks and uncertainties described in Capstone’s
filings with the Securities and Exchange Commission that may cause
Capstone’s actual results to be materially different from any
future results expressed or implied in such statements. Capstone
cautions readers not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
release. Capstone undertakes no obligation, and specifically
disclaims any obligation, to release any revisions to any
forward-looking statements to reflect events or circumstances after
the date of this release or to reflect the occurrence of
unanticipated events.
“Capstone” and “Capstone Microturbine” are registered trademarks
of Capstone Turbine Corporation. All other trademarks
mentioned are the property of their respective owners.
CONTACT: |
Capstone Turbine
Corporation |
|
Investor and investment
media inquiries: |
|
818-407-3628 |
|
ir@capstoneturbine.com |
|
|
|
Integra Investor
Relations |
|
Shawn M. Severson |
|
415-226-7747 |
|
cpst@integra-ir.com |
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