Project Focus

Operational Excellence
Production Planning

Engagement Timeline

1-week Diagnostic
52-week Project
2-week Sustainability

Keywords

Target Operational Model
Productivity
Industry 4.0

THE OPPORTUNITES

The industrial plant is part of a multinational company and just had been passed through a team restructure.

Operational managers didn t have consensus about the operating model. The core business was the restoration and construction of industrial rolls. We observed a scenario of irregular demand and high levels of late work orders.

Additionally, due to the technical characteristics of each roll, they were running without stablished standard times as reference, thus creating a situation where managers did not have proper daily schedule control. Daily planning and performance meetings were conducted without clear goals for the team.

There were opportunities to reduce costs of goods sold (COGS) & production cycle time and to increase production throughput and so leading to an increment in gross margin.

  • Production supervisors were working without acknowledging their impact on plant results and did not have clear goals
  • Production did not have proper KPI to measure work-force performance including productivity, stops, costs
  • The lack of a database with standard times for activities held in plant would make hard to deploy the monthly production plan in a daily or weekly basis
  • COGS control was reactive. Gross margin performance of work orders was being checked only at the end of the process
  • Most of the control tools were excel based with standardization issues. ERP and other official systems data were not being used for decision making support
  • There was a gap between production and sales plans . Late work orders became routine and clients’ complaints were rising
in Gross Margin
0 %

100% increase in gross margin by implementing Industrial Digital Operating Model

APROACH AND OUTCOMES

Project focused on Throughput, Integrated Planning & COGS, supported by Industry 4.0 & Digitalization

THROUGHPUT

Defined and implemented the first activities standard times database for the plant, allowing a more assertive deployment of the production plan

Implemented a daily performance review with clear operational goals and deviations log to solve production issues and then continuously improving daily schedule control

Delivered a digital solution (Mobile App, Real Time Production Cockpit & Dashboards) to strengthen short interval control routines, thus enabling proactive supervision behaviors in the process

INTEGRATED PLANNING

Developed a production capacity planning process which included plant capacity simulations in order to optimize resources and reduce late work orders

Implemented production cycle time management enabling more collaborative and proactive interactions between production and customer services areas. This reduced significantly the number of late work orders and the average days late

Automated Operational and Executive Management Reporting & Dashboards directly connected to company’s ERP system – elimination of elimination of spreadsheets as structural tool – No Excel left behind

COGS CONTROL

Redesigned COGS control to allow proactive and real time management . Now it is possible to monitor work hours, raw materials and parts according to the budget

Developed an integrated follow up routine which includes fast analysis of work orders correlating COGS with other KPI such as cycle time and production status

Optimized workforce and equipment utilization reducing costs with contractors, gas, water and electricity