Background
The client is a medium-sized owner-operated engineering company. Staffed by 600 employees, the enterprise generates sales of roughly 120 million euros. Its main products are testing facilities to measure the performance of automotive powertrain and running gear components. In recent years, revenues from services, spare parts and training have increased significantly. Major clients, such as car-makers, garages and testing organisations value both the quality and the performance of the company’s innovative products.
Since the modular design allows the products to be configured to each customer‘s specification, product complexity has been increasing rapidly and software management is growing in importance. Expectations of greater flexibility have forced down order cycle times and more complicated production planning smaller batch sizes and frequent product changes have reduced productivity. Responsive-ness has been achieved through investment in machinery and additional work in process. These factors, and rising material costs, have had a negative impact on returns.
When observing the core processes, a growing number of issues could be identified within the entire value chain – from distribution to assembly. Duplication, rework and mistakes were becoming common. Staff and manufacturing productivity was steadily declining.
In day-to-day business, management tended to react to problems rather than working to prevent them. Ad-hoc solutions were used to fight problems, but not their causes. A systematic mechanism to foster permanent improvement did not exist. The majority of executives had developed their skills within the organisation and acquired expertise as needed. Leadership and management qualities were largely self-taught to the best of the managers' knowledge and abilities.
Key performance data either did not exist or was rarely deployed by executives to provide early warning indicators or to actively control areas of responsibility. Plan/ actual comparisons of productivity, quality or performance were not carried out systematically or regularly. Gut instinct often replaced objective, data-based decision-making.
The Challenge
Subsequent to initial talks with T.A. Cook, company management decided to instiate a change process throughout the whole organisation. The first step was to identify and assess existing potential for improvement and to develop concrete recommendations for action. The next phase was to implement solutions and to monitor the change process.
The target was to achieve a sharp increase in productivity of 25% and to reduce operational costs by 7-10%. To this end, it was necessary to redefine structures, processes and operating procedures in manufacturing, assembly and logistics. A management control system based on key data was called for together with thorough management training and coaching to cement understanding and accountability.
T.A. Cook took on the task to accelerate the change process and develop and implement lasting solutions with management and staff.
The solution
Within the scope of the reorganisation project “FIT 2007”, the engineering company and T.A. Cook conducted an initial, detailed analysis of the organisation to identify and assess potential for improvement.
To tackle the factors identified in the analysis, the team designed an extensive reorganisation project to increase productivity and reduce costs with the aim of:
• optimising organisational structures
• optimising core processes in production planning and control, procurement and purchasing, assembly planning, layout design (manufacturing) and material flow (supply chain)
• reducing work in process
• reducing purchase costs
• broadening executives’ skills and knowledge through training.
• developing and implementing a management control system.
Over a nine-month period, five consultants worked on site with staff to implement said objectives and successfully introduced the concept of change to the engineering organisation. This collaborative engagement resulted in more stable work processes, performance-driven leadership and management as well substantial improvements in communication between departments which positively influenced earnings and motivated staff to continue with the change process.
Client benefits
By initiating the change from a functional organisation structure towards integrated processes, combined with an optimised material flow, T.A. Cook achieved an increase in productivity of around 25%.
Core processes in planning, purchasing and logistics were optimised and order leadtimes were reduced by 30% improving greatly the ability to respond to customer demands. An 8% reduction in operating costs contributed significantly to reducing overall unit costs.
For more information contact:
Rupert Clark
Marketing Manager
Direct: +44 (0) 1183 260 229
Mobile: +44 (0) 7792 926 696
r.clark@tacook.com |
Case Study Download »