Background

The company is a privately owned manufacturer of food products, the biggest in Scandinavia within its niche. To make better use of its production resources and adapt its cost situation to the market conditions, ManTec was hired as a partner in a far-reaching improvement programme.

Analysis

An initial study performed by ManTec identified improvement potential in the following areas:

• utilization of work time and manning;

• planning and production norms;

• leadership;

• machine utilization; and

• material flow.

Based on the initial study, ManTec helped to create a change programme which focussed on the weaknesses in these areas of operation and developed leadership skills to enable modernized, pro-active management of the business.

Main focus areas

Together with management, ManTec established a number of sub projects which used the tools available in Movex Enterprise Resource Planning to set and achieve specific goals for six main focus areas.

Main planning, detailed planning, material administration, system support/tools

Goals: to create tools and working routines for planning, procurement, production, supplies and finished goods.

Machine productivity

Goals: to increase the value adding operation time (time in production with a saleable product); create conditions to enable more predictable production output; develop a better basis for production and maintenance planning.

Operating procedure

Goals: to find more efficient use of the personnel resource, consequently lowering manning intensity. This would also give a better foundation to manning and production planning during seasonal variances. In practice, manning reduction was also created through better use of planned production time, more optimal planning and the production of a reduced number of articles.

Management system, goals, organisation

Goal: to install a working control deviation vs. goal attainment system so that different leaders were able to access appropriate tools to more efficiently steer and follow up on their operations.

Internal accounting

Goal: to assess the possibilities of both simplifying and improving the methods of recording and analysing material costs and changes in stock levels.

Leadership training at all levels

Goals: to reach a common understanding and acceptance for the need for change, and supervisors’ role in the change process; train leaders in the improved management system and in deviation handling. Clarifying leadership roles and reinforcing management in their roles as leaders of daily operations was vitally important to the success of the project.

Results

Owner and management view on the change programme was that ManTec worked as catalysts, which meant that it was the company itself which owned the development process, while ManTec acted as coaches and leaders in the development of the new systems and routines. Headline benefits to the company have been that:

• Productivity increased by more than 20%

• All leadership levels now have better control over planning and production

• Cooperation between operators and middle management has improved dramatically

• Yearly savings equate to an ROI of 190%

Background

The company, more than 100 years old, had many deeply entrenched routines and traditions. Although it made multi-million DKK investments over a period of about two years, these investments were primarily targeted at the technical aspects of the business, developing factories and operating equipment. Management decided it was time to examine organisational structures, business processes and efficiency, and turned to Mantec for assistance.

Implementation

The basic strategy of the implementation project was to involve the client, to create ownership of the changes which were made in production. This has resulted in the coordinator, middle managers, supervisors and other key personnel gaining extensive knowledge of the systems as they were developed and implemented in the production areas. An operational management system has been established, including measurements of Overall Equipment Effectiveness (OEE) for relevant equipment. “Board meetings” in all factory departments have been instituted, together with an improved planning tool and the creation of a culture based on information and cooperation between departments. On top of that, a management development programme has given managers a better understanding of their own resources and behaviour, and a realisation that increased cooperation between all departments is vital for success.

A system of reports for the board of directors has also been implemented – these regularly take the pulse of the production department and thereby give the client increased peace of mind on “where we are”.

Results

There were a number of benefits to the client of successfully implementing the Mantec project, both quantifiable and non-quantifiable. Directly quantifiable benefits have been:

• a yearly saving of DKK 11.6M, exceeding the project target of DKK 11M;
• project ROI of 250 %
• productivity increase of 23%
• overtime reduced by 15%.

Other, less quantifiable benefits include:

• OEE implemented on primary production lines
• reduction of waste and higher yield on final products
• KPI’s established for all levels and areas
• better cooperation between technical department and production
• higher productivity in the technical department, and reduction of support from external suppliers
• better control of work orders in the technical department
• PTA established.

Eighteen months after the project was completed, the client held two audits and found that productivity was 30% higher than it had been when the project started. In addition, the company now has a strong culture of continuous improvement.