The Challenge

AG Hair began manufacturing hair care products in Vancouver in 1989. Since then, the brand has grown to become the largest independent manufacturer of hair-care products in Canada. Known for their meticulous selection of natural ingredients, AG Hair creates a new standard of beauty.

In 2017, AG Hair moved to a brand new, state of the art 70,000 square foot manufacturing facility.  Recently, AG Hair mobilized their entire manufacturing facility to meet the demand for sanitizing solutions to support health organizations during the COVID-19 pandemic. With the success of its new “Hands Free” sanitizer line, AG Hair launched AG Body Care in 2020, adding to its offering of high-quality hair and body products.

To support its current and future growth, AG Hair engaged Propel Solutions for a 17-week project to conduct a review of its end-to-end manufacturing processes to improve the flow of inventory, from production to finished goods, with the objective of aligning processes in the Research and Development, Supply Chain, Production, Warehousing, Maintenance, and Quality teams.

The Objective:

The project was conducted within a 17-week period and included the following activities:

  • Capacity Analysis: Propel conducted process observations in each of the areas to identify areas for improvement. Our consultants conducted a thorough analysis of manufacturing and production lines to identify plant capacity, as well as to identify key process constraints. Through the analysis, Propel identified an additional 60% of production capacity opportunity.
  • Warehouse and Inventory Management: Propel completed a comprehensive review of existing warehouse and inventory management processes. Over 70 ideas for improvement were identified though process mapping critiques, process observations and stakeholder engagements. A new warehouse layout was created based on ABC classification, designed to improve the flow of finished goods through the receiving and picking process.  Inventory controls were established through the implementation of ABC Cycle Counting. Additionally. service levels were established for all order types to ensure consistent service delivery for AG Hair’s customers.
  • Lean Production and Improved Asset Deployment: Propel designed a Pull Production System to improve the production and scheduling process. Minimum and maximum quantities of inventory stock were defined, and a Kanban system was established to trigger production based on customer consumption. In addition, improvements were made to the process of assembling finished goods by moving to Straight Through Processing, increasing throughput by 30%.
  • Development of a Resource Plan and Management Toolkit: Propel worked with the AG Leadership Team to develop a Resource Plan to manage staffing based on monthly sales forecasts. The plan provides management with visibility into staffing needs and minimizes risk of scheduling issues due to unavailable resources. Additionally, Propel developed a comprehensive Management Toolkit with Key Performance Indicators (KPI’s) to measure success on a daily, weekly, and monthly basis. Structured communication paths were established to create problem solving behaviours across the areas, allowing for continued improvements.

The Results

The Operational Excellence Project provided AG Hair with the data and tools to achieve process improvements through the implementation of Lean Manufacturing principles. Over 30 Method Changes were developed to improve the flow of products, from procurement to order fulfilment.

As a result of the process implementations and Management Toolkit Installations, AG Hair is positioned for continued growth. Management is more engaged with their teams through Daily Huddles, enabling management to proactively predict and identify potential problems, instilling a culture of continuous improvement that is consistently striving to deliver value!