📋 Case Study

Renewable Energy Gearbox Producer – Multi-Shift Gear Hobbing Optimization

Night-shift premium and fatigue-related rework inflated reported machine hour cost by 37%

🏗️ Project Overview

Introducing third shift on high-precision gear hobbing lines to meet turbine delivery deadlines

🎯 Challenge

Night-shift premium and fatigue-related rework inflated reported machine hour cost by 37%

🔧 Design Approach

Fatigue-adjusted yield factor integrated into rate calculation; dynamic shift premium tiering based on historical scrap rate bands

📐 Design Diagram

AI-generated project design illustration

📐 Key Calculations

Yield-Adjusted Machine Hour Rate

Base Rate / (1 − Scrap Rate)

Result: USD 138.60/hr (vs. USD 102.40 unadjusted)

Captured true cost of quality loss

Tiered Shift Premium

Base × (1 + 0.12 × [Scrap Rate Band])

Result: 12%–18%

Linked premium to performance, not calendar time

📊 Results

Rework reduced by 29%; third-shift gross margin increased from −4% to +11%; customer delivery adherence rose to 99.4%

💡 Lessons Learned

• •Machine hour rate must reflect output quality—not just input time
• •Shift premiums should be performance-contingent, not automatic

✅ Key Takeaways

• 1Machine hour rate must reflect output quality—not just input time
• 2Shift premiums should be performance-contingent, not automatic