Market conditions were good and demand was high, this led to an increasing order log and problems to deliver in time. Through the development and implementation of a new management control system and improved communication productivity increased substantially.
Background
The company is a world leader in load handling solutions for the automotive and other industries, selling their own brand products globally. At the factory under consideration, where approximately 170 manual workers are employed, the market situation was good. In fact, market demand was much higher than the company could produce. As a result, order stock was continuously increasing and there was a need to increase production.
Implementation
The factory analysis carried out by Mantec identified a significant improvement potential in productivity. This potential could be realised through:
- improved production planning and manning patterns, to allow streamlining;
- improved material management and better interaction with suppliers;
- the development of man loading systems and personnel flexibility, including salaries and incentive schemes;
- the development of production time measuring and workloads;
- reduced lead time and throughput time, through reorganisation of workflow and better coordination between departments;
- the identification and implementation of Best Demonstrated Practice (BDP), Standard Operating Procedures (SOP) and work instructions;
- the development and implementation of a new management information system (to include tools and Key Performance Indicators), combined with variance reporting;
- the development of organisational and team structure; and
- supervisory management training and the development of leadership skills.
The planned production increase was also dependent on the ability of subcontractors to increase their production and meet agreed delivery dates. Consequently, during the project particular attention was paid to the subcontractor network, to ensure close cooperation and the synchronization of subcontractor production with factory production planning.
Results
A new management system, which included appropriate KPIs, was designed and implemented. A new base for standard production time was established. Cooperation and communication between management, supervisors and personnel was improved. As a result:
- total cost efficiency was improved giving a better margin per produced unit;
- production flow was more even and therefore it became possible to more readily and accurately predict overall production;
- throughput times became shortened; and
- delivery accuracy was significantly improved.
These improvements resulted in improved competitive edge for the company. In particular:
- by the end of the project, production levels reached 75 items per week, representing 85% improved production; and
- yearly results improved by EUR 4.5 million, a project ROI of 680%.
