Background

The company is a leading manufacturer of prefabricated houses. The market is very favourable and in order to meet the expected demand, capacity will have to double within two years – but without any increase in manning.

The cooperation with Mantec started with a pre-study to assess prospects of doubling the capacity of the production facility. The study confirmed weaknesses such as:

• low industrialisation;
• ineffective use of the production layout;
• lack of material logistics; and
• lack of management and management tools in the workshop.

Implementation

To tackle these identified problems, the client entered into a full project with Mantec aimed at industrialisation of the business. It was divided into three different areas – improvements in production, purchase outsourcing, and improvements in construction.

Production

The existing layout was revised to an industrial flow with the potential to manufacture according to “lean production” and “right from the beginning”. Production data was updated to assist management in controlling the business. A scheme of paced workflow was implemented, so as to avoid production bottlenecks. This helped the whole organisation to work, plan and coordinate activities with a clear strategy to always deliver on time. New methods for controlling production materials were designed and implemented.

In addition, production management teams were trained to lead and control the business, and deal with daily interruptions In a structured way that enabled continuous improvement.

Purchasing and outsourcing

Part components with low added value were outsourced to sub-suppliers, giving them the responsibility for delivering directly to the construction site. Consequently, quality demands (and to some extent working content) increased for existing sub-suppliers.

Construction

More stable and partly simplified methods of construction were implemented. This led to some new types of material being used.

Results

The client received a nomination for their excellent work within the LEAN-field, at the Swedish Construction Industries own LEAN-awards. Mantec were mentioned in the nomination as having been a big factor in teaching the organisation a “real LEAN” mentality.

Other benefits to the client were:

• capacity increased from 11 to 18 modules per week, an improvement of over 60%
• paced workflow helped the organisation work to a clear strategy
• a revised production layout led the way to “lean production”
• methods of production were improved, and investments better targeted.

Background

The factory, with over 500 employees, is owned by an American group that manufactures building materials. The corporate group employs 20,000 people worldwide. The factory is built around three production units – pure line production, stand-alone production, and a distribution centre (a warehouse for packing and deliveries). For a long time it had problems regarding profitability, and at the same time it could not deliver the volumes that the market wanted.

An initial analysis conducted by ManTec found several problems.

• Production managers were seldom in the production facilities, due mainly to a requirement to attend a large number of meetings.
• There was widespread disrespect for working hours and a lack of understanding of how the behaviour of individual operators affects outputs.
• There was no focus on lagging activities or action to get back to the right levels.
• Cross-functional work was lacking.
• The organisation was very good at gathering data but no action was taken on it.
• Plans did not take into account known capacity variations and real-time availability.
• The planning system was not used for detailed planning of activities, and data in the system had not been updated for several years.

Implementation

Based on the initial analysis, ManTec and the client decided to undertake a project aiming to raise productivity and production volume, reduce scrap, and increase delivery accuracy.

A management control system, created to achieve predictability in operations, was rolled out in two steps.

Step 1 – which was initiated immediately after the project started, was to institute daily deviation management based on current plans and follow-up opportunities.

Step 2 – was to ensure proactive behaviour, achieved by creating the conditions to always reach the week's volume and productivity goals, by early identification of deviations from plan (at shift level), analysing the cause and taking corrective action. In addition reality-adapted (occupancy and capacity match) production plans were introduced.

Other key focus areas included:

• planning – the design and implementation of a regulatory framework so that maximum capacity was used while avoiding overcrowding;
• introducing a structured approach to enable early identification of quality defects, rework requirements and lack of technical availability. This included embedding a problem-solving structure to help identify and resolve root causes, which greatly reduced the amount of rework; and
• increasing efficiency through measures to increase utilization (OEE) by creating more runtime, shortening cycle times and eliminating unnecessary steps. Simple rules were introduced to reduce non-value adding time.

In order to effectively improve the current workflow, it was natural to involve the operators throughout the project, to take advantage of their knowledge. Consequently changes were implemented smoothly, because the operators had an understanding of them and felt that they had influenced and participated in their design.

Results

Benefits to the client of successfully implementing the project include:

• a new management system and an operational knowledge of how to use it to take corrective action;
• greater understanding and knowledge of production;
• productivity increase of over 14%;
• reliability of supplied material increased from 16 % per unit to 97%;
• produced volume increased by 25% while quality costs fell by 25%.

Overall, the project ROI amounted to about 400%, corresponding to annualised savings of SEK 62M (€6.9M) for the client organisation.

Background

The parent group employs more than 13,000 people across Europe, of whom around 800 are in Poland where it is a leading supplier of heavy engineered products to the construction industry. Despite this very strong market presence in Poland, there were concerns that the levels of productivity were sub-optimal and that the non-productive overhead structure was inappropriately large.

The group’s largest factory in Poland, with around 600 employees, was chosen for the project because it encompasses both of the two key manufacturing processes as well as a substantial back-office support organisation.

The plant comprises two completely separate manufacturing units — one long established, the other brand new — together with a small, secondary processing unit and extensive office accommodation.

Implementation

A pre-study was carried out across all areas of the factory site to determine areas of opportunity and estimate the potential that could be realised through a Mantec programme. It was agreed, based on the pre-study output, to engage in a productivity programme that would cover both of the factories and all support and administration areas and would include a restructuring of the organisation.

Before the programme, responsibilities overlapped and managers at all levels were generally very passive. Reorganisation was the key element in developing an integrated, dynamic management team with clear roles and responsibilities, and it was this group, working with Mantec, that drove the changes throughout the plant.

In the older factory, which is “process line” based, there was a three-way approach to increasing productivity:

• streamlining of the production crew on each shift
• instituting fewer changeovers
• instituting faster changeovers

The “perfect production cycle”, which was developed with the sales department, substantially reduced the number of changeovers — and, therefore, lost production time — by fixing a monthly cycle of production.

In the newer factory, where the work could broadly be described as “batch-based manual work”, a complete and integrated management control system was developed and installed in conjunction with the plant manager and his team.

To support the two factories, an entirely new system was developed for maintenance in conjunction with the (newly appointed) manager. This resulted in a 38% improvement in productivity whilst at the same time external sub-contractor costs were reduced substantially.

Finally, the support and administration functions were streamlined and consolidated: many employees who had previously been in the office building moved out so they were closer to the factory floor and thereby became more integrated with the business.

Results

As a result of the programme, productivity in both factories increased by 40%. In addition, overall overheads were reduced by 30% in labour cost terms.

At the end of the programme, a day-long presentation — including factory tours in small groups led by managers — was made by the management team to the divisional Chief Executive, the Chief Operating Officer and many plant managers from around Europe.

For the board members present, it was the proof they needed that, important though the financial benefits were (with a return on investment of 470%), their most fundamental goal had been reached — the plant now had managers who were active, dynamic, focused on performance and worked together as a real team.

Background

The company, which develops, manufactures and markets laminated flooring, has a leading position in both the USA and Europe and a turnover of more than 3 billion EUR 335 million.

One unit manufactures laminated flooring and has 150 employees of which 120 are in production. For a long period of time it showed low profitability, and eventually its figures dipped into the red. Analysis showed that this was caused by high levels of material scrap and low productivity.

The company believed it needed help in developing and implementing an action programme to drive the manufacturing unit back into profit, and turned to Mantec for assistance.

Analysis

Historically, the company directed its attention to volume. Cost awareness was low. But as volumes have deceased it has become necessary to shift focus to cost efficiencies, for example by analysing material yield and productivity. However, the company lacked a powerful goal steering methodology to help them undertake this type of analysis.

Implementation

With the help of Mantec specialists, a task force was put together comprising the production manager, the controller, the manager of production technique and the two central foremen. They met each morning to go through the previous day’s actual output, and sought explanations for unfavourable variances and any problems encountered.

By doing so, their mutual understanding increased and they were able to build a collective view on what problems needed to be eliminated to increase profitability. They created an activity list that focused on actions which could be implemented quickly.

Parallel to this task force activity, a goal steering process was worked through which included the following elements:

• setting KPIs for OEE (Overall Equipment Effectiveness), material yield and productivity;
• organising the structure and frequency of meetings for both hierarchical and cross functional follow-up;
• preparing follow-up reports with KPIs and activity lists for the respective business units within the organisation; and
• cascading goals from the production manager down to shift teams, and creating plans to connect the starting point with the goal.

When these elements were in good shape, management moved from the task force to the line. This was achieved by setting up meetings between shift leaders and production leaders (daily), production manager and production leaders (two to three times a week), and between the cross functional groups such as production leaders, production technicians and maintenance staff (weekly).

Two other clear benefits for the company were noted during the course of the project. Firstly, supporting functions became indirectly goal-steered, because of the ’pull’ from the operational functions. Secondly, the company shifted focus from ’how to invest´ to how to solve problems´, and this resulted in smaller investments but increased workflow and continuous improvement. When analysing and solving the problems a great deal of importance was attached to establishing a methodological working method according to the cause-effect principle.

Results

All solutions big and small were successfully implemented. The project paid for itself many times over before it was even complete. In particular:

• Scrap of direct material reduced by 50% 
• Productivity increased by 30%
• Profitability during the project period of about 6 months accrued to EUR 1.7 million