The integration of lean manufacturing principles with simulation modeling is widely recognized as an effective approach for evaluating, analyzing, and optimizing industrial processes. This study examines opportunities to reduce operational costs, processing time, material waste, and scrap rates associated with the manual cutting process of air-conditioning (AC) insulators at the Saudi Air Conditioning Manufacturing Company (SAMCO). Currently, five workers perform manual cutting operations based on the surface-area specifications of various AC units, using predefined measurement scales. This labor-intensive process results in an estimated annual labor cost of approximately USD 60,000 and requires extended working hours to meet the daily production targets. To address these challenges, the study employed a comprehensive methodology that incorporated time study analysis, simulation modeling, lean manufacturing tools, supplier selection and evaluation, and technical and economic feasibility assessments. Based on the analysis, the study proposes automating the cutting operation by acquiring two insulation-cutting machines. The results indicate significant operational improvements, including annual cost savings of approximately USD 36,000, a projected payback period of 10 months, and a118% return on investment within the first year. Overall, the proposed automation strategy enhances production efficiency, minimizes waste, and supports sustainable manufacturing practices.

Keywords

Lean Manufacturing, Simulation Modeling, Payback Period, and Air Conditioning Manufacturing