Background

The company, a global leader in the production of storage systems employing approximately 150 people, markets and sells products worldwide to both private consumers and business customers. For several years, the company fought rising losses. Operations were in need of comprehensive rationalisation and control instruments and management systems required strengthening.

Implementation

The project started with a preliminary study by Mantec, reviewing and analysing the whole company – including the sales offices and subsidiaries in Europe – over a three-week period. Based on this analysis, a number of subprojects were defined and the work of change started.

The key focus areas were:

• carrying out ABC analyses and calculations for customers and products (ie analysing the range of customers and products into groups which have different levels of significance, and which should be handled or controlled differently). Based on these analyses, both customers and products were consolidated, a process which increased the profit margin significantly;

• carrying out an analysis of suppliers and purchased material, as a result of which new contracts were negotiated and certain suppliers replaced. In addition, changes were made to material specifications;

• changing the organisational structure of the company, dramatically reducing both direct and indirect personnel costs, which had rapid positive cash flow effects; and

• implementing systems for operations control, which involved:

The organisation’s motivation for change was supported by training in the form of theory and a number of workshops. Similarly, the company was able to take ownership of the change process, and secure continuous improvement, because project work was managed through a project team.

Results

The project resulted in lasting behavioural changes and implementation of a number of new systems and working methods. As a result, costs were reduced and income increased through:

• increased profit margin, based on consolidation of customers and products; 
• reduced costs for material purchased and freight; and
• reduced costs for direct and indirect personnel.

The company achieved positive cash flow even before the project was completed. After its completion, the company was able to report a positive result for the first time in several years.

BACKGROUND

Established in 1973, the company is a major Indonesian textile manufacturer with a combined throughput of 3.3 million metres per month. Mantec was invited to help turn around the looming downturn threatened by massive increases in operational costs and market saturation due to the increased surplus of Chinese textile exports.

Mantec undertook an initial analysis, looking into the overall business algorithms – systemic, operational, and behavioural – and identified potentially considerable improvements in the areas of productivity, quality and logistical efficiency.

IMPLEMENTATION

The project approach was primarily centred on increasing throughput and quality. This was achieved by fulfilling the installed capacity, reducing downtime, improving quality and reducing levels of rework. Major factors included fine-tuning support systems, from sales, planning, and purchasing to shipment.

The focus on support departments was centred on reinforcing departmental and interdepartmental communication. Comprehensive training of forecasting within Marketing was also conducted. Tools for better control at the point of execution were installed. Manloading was also developed and installed, looking into the effective utilisation of labour resources per section and department. Planning accuracy, based on realistic material availability and production lead time, was improved.

Other key achievements of the project were:

• strategic and operational goals were carefully broken down into sets of activities in such a way that everyone understood what they were responsible for;
• a control system was introduced to enable accurate forecasting, effective planning, proper and realistic allocation of resources, and timely and accurate feedback and reporting;
• behavioural profiles were transformed into measurable activities for specific accountability. This included development of effective supervisory behaviours; and
• a culture of continuous improvement was embedded, because instead of providing inflexible, rigid solutions, Mantec created, trained and reinforced teams geared towards continuous and sustainable quality improvements.

RESULTS

Overall, results have surpassed original expectations, particularly as the teams trained by Mantec continue to find new and refine existing improvements. Most improvements have been generated through increased throughput and quality, measured by a newly developed productivity measurement scheme that relates output to production hours.

Additional monetary improvement was generated by:

• eliminating 28.75% of set-up time; and
• reducing the coal-fired boiler overhaul time, thereby reducing the fuel consumption of oil boilers.

A total of USD 1.1 million annualised savings was achieved. The project has already generated an equivalent of 388% ROI in its first year of implementation.

Background

A European leader, this supplier of injection-moulded packaging needed help to transform the UK factory. Loss-making for many years, there was concern local management lacked the depth to turn their business around.

Implementation

Detailed analysis revealed low levels of productivity caused by: poor planning (too many changeovers, lack of cooperation with other departments and scheduling clashes); ineffective shop-floor supervision and insufficient attention to changeover times. Underlying these problems was a management group lacking the skills and vision to change.

• Discipline was introduced into the planning process with a formal weekly cycle of meetings and activities
• Performance monitorng was developed and installed to identify and make public any variations from plan
• Carefully structured inter-departmental meetings were established to force communication and cooperation
• A SMED (single minute exchange of die) programme was instituted—this reduced average changeover times by more than 60%

Behind the day-to-day activities, there was a programme of management development—devised in close collaboration with the group CEO and headquarters HR function—to build an effective, local team of managers.

• Workshops were held where theoretical concepts could be intimately linked to the practical demands of the business
• Intensive one-on-one coaching was conducted with all members of the team
• Group HR leadership initiatives were incorporated into the development programme

Results

The anticipated financial results were delivered through improved productivity (+12% in moulding +22% in printing) and material yield (15% reduction in scrap).

More important for the long-term success and growth of the group, the UK platform was stabilised with a management team that could justify further investment in the UK market.