Case Study: Leading a Successful Company Turnaround for EU Auto Manufacturer
A high-volume automotive component manufacturer was struggling to meet customer production demands for a critical part. The plant was the sole manufacturer for a specific part and shipping to OEMs, and to internal sister facilities around the world. This situation resulted in backlogs for customers, frequent last-minute scheduling changes throughout the supply chain, significant amounts of changeovers, increased overtime, high costs, as well as excessive amounts of premium freight.
CCO was called in to rapidly fix this situation after two other consultants had failed to deliver results.
The project was delivered in three phases in 150 days – with positive results beginning in 60 days.
Phase 1: Improve production line throughput
CCO implemented its Operational Excellence (OpEx) method promptly upon arrival to the plant. Diagnosis of the situation included a station-by-station analysis of each production line and interviews with management and shop floor teams. The CCO team also analyzed customer production history, maintenance processes, production planning and employee training. In order to resolve the immediate issues, CCO implemented a Scrum Board process to identify easy-to-fix problems across all plant departments and to make Sprint backlog items visible for all employees.
As CCO and the client focused on the lowest performing lines in a large manufacturing complex, the Scrum Board served as a communication, accountability and progress-monitoring tool – which is also commonly utilized the CCO OpEx method. The client’s commitment and interest grew after the first few Sprints were completed and victories tallied in the “win” column. The foundations of real improvement were being set in process, and the staff finally felt highly motivated on the production line.
Phase 2: Fix the shop floor infrastructure
Flow Model Used to Identify Maintenance Needs and Establish Priorities
While establishing a balanced line flow was the top goal of this turnaround, achieving increased velocity was also an urgent necessity. In order to understand the overall process, the existing flow of the production line was evaluated based on the previous flow parameters, and an analysis of nine months of production data was conducted.
Total Productive Maintenance (TPM) Plan Delivered
As the early improvements were noticed on the shop floor, the increased engagement among staff was leveraged to get buy-in for a TPM Plan. Operators were trained in techniques that enabled safe and timely maintenance at the operator level. Certificates were issued to operators that passed both written and skills-based training, including on-the-job performance reviews of expected TPM tasks.
Up Time Monitoring Process Installed and Standards Set
An initial forecast for throughput and defective and/or poor-quality parts was made. By week six, both of these metrics displayed progress aligned with the forecast.
Improved Spare Parts Plan Implemented
As new balance in the line was established, there was work required to establish a business-appropriate spare parts inventory. Financial goals had rationalized spare parts, and inventory cost was high. Repair times were unnecessarily long and expensive. Expedited procurement and lost production far outweighed the result of establishing the correct spare parts inventories. Even though costs in spares were added, the total cost of manufacturing dropped – to the bottom line.
Phase 3: Create shop floor velocity
With these improvements and efficiencies in place, attention turned to the primary metric of success of machine utilization (MU). MU reflected a drop by 5% in the first month, but by the second month, it had increased 25% versus the baseline. At this point, the client’s team was fully able to take control of the processes and solutions CCO had helped them establish and keep the improvements and momentum going.
The CCO team saw results beginning in just 60 days since their arrival to the facility. Key results include:
- Production line throughput increase of 60% with quality improvements also realized.
- The number of defective and/or poor-quality parts per hour was reduced by 50%.
- By implementing an improved spare parts plan, average time for repairs was reduced by 50%.
- Overtime and expedited freight were eliminated.
The impact of these improvements has had a marked effect on the operations, morale and profitability of the facility. CCO’s get-it-done philosophy allows the firm to rapidly analyze problems and work shoulder-to-shoulder with the client’s team to turn around a manufacturing operation. This approach – one reason CCO’s clients call them the “anti-consultant” — leverages superior people, processes, speed and engagement to deliver operational excellence for businesses.