Background

The client company employs 5,000 people in 20 countries and is a major player in shipping and logistics.

Despite a dedicated workforce, overall profitability results were disappointing, mainly because of. significantly increased costs in general, combined with increasing competition.

The company decided to analyse and evaluate its overall organisational structure and operational processes, and engaged Mantec to help.

Analysis

In close cooperation with management at all levels, Mantec conducted a thorough analysis which indicated significant improvement potential in all departments. By involving the lower level managers an atmosphere of “let’s do something about it” spread, a positive attitude that was important for the implementation phase.

Implementation

The implementation phase of the project comprised six key areas:

Land Organisation – Redesign of organisational setup to focus more on profit and loss.

Commercial Ship Organisation – Upgrade of commercial focus from Route Hotel Manager to Commercial Head who is always on board. Reduction of management levels.

Route Closure – Analysis of current route footprint, resulting in the proposed closure of one route. Part of the project involved supporting the process to the pull-out date.

Pax Planning modules – Revitalisation of the forecast process and implementation of a “Day of Departure” tool which used data such as passenger numbers, passenger mix, and spending patterns.

Procurement – Analysis of spending to support the finding of future suppliers. Consolidation of catering suppliers. Reduction of on-board waste.

Management System – Implementation of a new operational management control system, both on ships and ashore. This improved the consistency of HQ management of routes and ships.

Results

In total, successful implementation of the project led to savings of over EUR 17 million:

• land and commercial ship re-organisation: EUR 3.5 million
• route closure: EUR 5.4 million 
• from fixed to variable manning cost: EUR 5.6 million
• optimisation of procurement: EUR 1 million
• cross-organisational continuous improvements: EUR 2.1 million

Background

The company is part of a worldwide group of over 100,000 employees working in logistics, energy and manufacturing. The company, which among many other things manufactures the world's largest container ships, has about 3,500 employees and a yearly turnover of over EUR 600 million.

For some years, despite its large internal projects, the company had profitability problems and it turned to Mantec for assistance.

Implementation

The pilot study revealed significant improvement potential in several areas, mainly in the production and supply chain management. A joint project, divided into five sub-projects, was undertaken with a target to achieve an annual improvement of about EUR 60 million. The main project and the five sub-projects were all led by Mantec project managers. The sub-projects were manned by twelve Mantec consultants and eight internal team members on part-time during the twenty months it lasted.

In close cooperation with the client, this complex project engaged in several parallel sub-projects and activities:

• management team workshops;
• process mapping in the development, production, purchasing and logistics departments;
• training sessions with operators; and
• leadership training (through approximately 100 workshops at all levels).

The project also took over management of an earlier improvement programme that the client had launched.

To steer the project and drive improvements:

• effective project organisation and management with follow-up meetings was put in place;
• clear documentation was drawn up;
• clear monitoring and evaluation systems to track improvements and ensure implementation were put in place.

Continued involvement of the client was ensured through close dialogue with senior management and the CEO in weekly follow-up meetings, and monthly steering groups with management and labour unions. Internally, client project resources benefited from Mantec methodology. At the end of the project, client project members were gradually deployed to key units and departments, to maintain the impetus of the new ways of working.

Results

Benefits to the client of this complex project have been:

• the implementation of a strong and functioning management control system which includes “Goals-Roll-Down” and appropriate KPIs;
• new understanding and consensus on leadership and its practical applications;
• increased internal cooperation and flexibility internally, which also improved the customer–supplier relationship;
• reduced absence;
• clearly mapped processes within management, development, procurement, logistics, production and administration;
• establishment of a logistic function; and
• new organisation in the development department.

The implemented improvement activities exceeded the target of EUR 60 million in annual savings and represented a project ROI of about 900%