SCG: Your expert for:
  • Lean Management
  • Lean Manufacturing
  • Lean Administration
  • Interim Management
  • Project Management
  • Process optimization
  • Training and Coaching
  • Reorganization and restructuring
  • Case Studies

Case Studies

Case Study 1: Consulting

JIT Plant / Quality Problems

Customer Problem / Current Situation:
The end customer (OEM) has not been satisfied with the quality of the JIT plant for a long time and has set the supplier to  level C (Q-H: ELP status 3) with the consequence that they are no longer taken into account in new projects or inquiries.
The end customer has recommended that the supplier analyses the situation with a cooperation partner of the SCG, who have  asked for my support, to get out of the level C status at short notice

Procedure:
Analysis of weak points:
Analysis of the entire process, starting with the cause of the error up to the corrective process.
Analysis of the organisation and responsibilities
Development of fields of activity.

Causes:
Problems with suppliers in the JIT plant have been known for a long time because the TOP 3 problem cases are subsidiaries, but these are not systematically analysed and remedied. (Inadequate cause analysis).
Missing response time for quality problems of parts in the factory.
Inadequate management agility.

In-place measures:
Implementation of fields of activity.
Optimization of the material flow, e.g. by establishing decoupling points.
Introduction of shop floor management and a transparent and consistent error correction process as well as their sustainable processing of e.g. 8D, PDCA cycles.
Organisation, clear definition and clarification of responsibilities, resources and their competencies.

Results:
Classification in B and promptly in A level as preferred supplier.

Summary / Lessons Learned:
Too little agility and the lack of a clear escalation process to the parent plant led to these problems because the JIT plant did not have the necessary resources and expertise. Furthermore, the CIP processes were optimized and the executives “sensitized” to their responsibilities.

Case Study 2: Interim Manager

Process optimization in order to increase efficiency

Customer Problem / Current Situation:
The client had been trying to increase efficiency in the production plant for a long time, but failed due to deadlocked internal structures and a lack of willingness to change. So he looked for external help. All changes were blocked by the works council, as further layoffs were feared and no significant or sustainable improvements could be seen!
Therefore, they looked for an interim operational manager to solve the problem.
How would you proceed and how would you motivate our employees?

Procedure:
Conversations with executives, employees and with the works council to understand their opinion of the current situation in the company.
Summary of my impressions and elaboration of an action plan and coordination with the management regarding the further procedure.
Presentation of the action plans to everyone involved, including the works council and clarification of the implementation procedure.
Weekly reporting (internal and to stakeholders) on the status of implementation.
(Savings target to actuals, deadlines, problems, next steps)

Causes:
Too many measures have been planned in the past, but only partially implemented. Relocation or layoffs unsettled the workforce. There were no clear concepts or commitments to secure the future of the plant. The result was a lack of trust in the management workforce.

In-place measures:
Planning and implementation of restructuring measures to secure the location (efficiency increase and cost saving programs).
Discussions and negotiations with the works council and lawyers.
Operational Excellence: Analysis and, if necessary, optimization of all operational processes as well as the implementation of the group production system.
Organizational changes / personnel adjustments including in management levels.
Daily status meeting (shop floor meetings) and weekly discussions with all managers (Gemba Tour)

Results:
Successful involvement of all employees in the restructuring program.
Total efficiency increase of 30 percent along the value chain.
Three-digit cost savings.
Example: Special transport costs reduced to 95%, overtime reduced by approximately 85%. Missing parts management / quality costs reduced 65%.

Summary/ Lessons learned:
Due to missing discipline and unclear areas of responsibility, there was a lack in the necessary competence to implement changes sustainably. The workforce became increasingly dissatisfied and fewer and fewer employees were motivated to work on changes in the long term, as the executives did not consistently support them.

Case Study 3: Project manager restructuring / interim plant management

Takeover of operational control and the introduction of restructuring measures

Customer Problem / Current Situation:
After the acquisition of three production plants (2 in Spain and 1 in Morocco) there was a drastic drop in sales, which required an exchange of management and extensive restructuring measures.
We have sales and drops in profits and cannot understand why?

Procedure:
Definition and coordination of immediate measures.
Clear assignment of tasks and responsibilities as well as prioritisation of measures in coordination with the customer.
Elaboration, concept creation, evaluation and implementation of a turnaround program.
Introduction of targets, daily reports and status meetings as well as conference calls with the management of the subsidiaries.
Introduction of a bonus system / targets regarding costs and deadlines.

Causes:
Due to the high level of staff cuts, there weren’t enough clear responsibilities. After the takeover, the parent company introduced none or very few integration projects. The existing management was unable to adapt to the changes and new processes (e.g. SAP implementation) on the part of the parent company. Since the workforce in Spain assumed that all activities in Spain would be relocated, the mood and motivation were at a low point. Compliance with delivery dates and quality requirements became less important.

In-place measures:
Identification of weak points and their elimination in the organization, processes and structures.
Introduction of quality gates and processing of quality problems (Cero defects)! As well as the analysis of warranty cases.
Taking overall responsibility.
Planning and implementation of immediate measures and a turnaround plan.
Discussions and negotiations with authorities, works councils and lawyers regarding location closings and downsizing of activities.
Implementation of a new management in Morocco and the introduction of a reporting system.
Bundling processes, activities and functions in one plant.
Handing over the old facility to the owner.

Results:
Delivery backlogs were reduced to zero in a period of 3 months
Successful downsizing and rebuilding of a production facility in Spain (process organisation, structures …) with the integration of the parent company.Reduction of up to 70% of stocks.
Clarification or agreement of all open labour law issues with former employees.
Layoffs of around 40% of the workforce and the involvement of all employees in the new organisation.
The turnaround in Morocco was reached within a period of 5 months.
Training of a new plant manager (former employee of the parent company)

Summary:
The company was taken over (asset deal) but there were insufficient synergies implemented by the parent company. The local management was insecure and “overwhelmed” and loyal to the previous owner.
Inadequate safety stocks and documentation, as well as a lack of knowledge transfer, preliminary training and familiarization brought the company into difficulties. There was also a lack of experience with requirements and challenges in “low cost” countries.

Case Study 4: Consulting

Revision and implementation of a restructuring plan

Customer Problem / Current Situation
After the previous insolvency of the subsidiary, the situation in the company did not improve significantly and a turnaround plan was drawn up by a renowned consulting company that had to be implemented. We need a manager who drives the planned measures and takes the employees with them. Can you do this?

Approach / Procedure
Review of the turnaround plan and analysis of the measures
Revision of the measures in coordination with the parties involved
Weekly department-related agreement on the status of the measures and the savings potential.
Furthermore, the implementation of a “war room” with daily status meetings and shop floor management.

Causes
The lack of profitability and increasing losses forced the parent company to act. Due to constant changes in the management, the middle management was split off. The new interim manager was unable to attract the managers and therefore planned measures could not be implemented sustainably.
Das Unternehmen (In Spanien und USA) und dessen Belegschaft hatten sich auf diese Situation eingestellt, da aus dem Mutterhaus immer wieder Kaptital frei gemacht wurde.
The company (in Spain and the USA) and its workforce had adjusted to this situation because the parent company was repeatedly freed from capital.
Management measures such as the reduction of personnel as well as sending managers and operational staff into short-time work did not achieve the desired effects. Many experienced employees left the company due to the current financial difficulties and lack of prospects.

In-place measures
Concept development as the basis for the implementation of the strategy
Vision / commitment of all employees / control of implementation.
Introduction of lean principles and a project management organization
Definition of the roles / responsibilities of a project manager.
Interface clarification for the department / introduction of quality gates.
Introduction of project controlling (dates / costs) / revision of the inventory and termination of an external warehouse.

Results
Potential savings in the three-digit range were identified and measures derived from them. (Reporting every 2 weeks).
The project controlling introduced could make the cost drivers transparent
Make and buy decisions were questioned.
The project was not extended after the planned duration.
The company filed for bankruptcy 3 months later. A competitor took over the company from bankruptcy.

Summary / Lessons learned
The necessary measures were not consistently followed by the parent company. There were always significant (negative) deviations in the monthly result. Due to a lack of project controlling, the cost drivers were never clearly analysed and nobody had to answer for deviations. The management in the parent company should have reacted prematurely to inadequate management on site and contradicting information.

Case Study 5: Interim Manager Operation

Coordination of the end of series production and support for the entire relocation and closure of the plant

Customer Problem / Current Situation:
After the decision to relocate the entire production plant to Romania, the customer was looking for an experienced operational manager who was able to ensure the end of series production in terms of quality, delivery dates, resources and delivery quantities, and to coordinate the relocation and new start-ups in parallel with a team.
Customer request: We need an operations manager with experience in the
sensitivity of the situation and with people to prevent a production stop.

Approach / Procedure:
Discussion of production and resource planning with the production and manufacturing managers.
Analysis of weak points and risks and in the coordination of possible countermeasures with the management.
Daily status discussions regarding delivery quantity and quality problems in addition to weekly coordination with the HR department, the start-up manager, the end customer and project controlling in the USA.
Daily employee interviews in production and with other employees across departments

In-place measures:
Clear rules regarding non-observance of safety-related requirements (occupational safety) and implementation of a working group (persons responsible for occupational safety and the HR department.
In order to maintain motivation and discipline, daily production inspections were organized and discussions were held with the production teams.
Visit to the new production site to gather an understanding of ​the current measures on site (discussion of the relocation scenarios).
Revision of the service and spare parts strategy of the machines to be relocated.
Termination of the current production manager and assumption of responsibility.
Coordination with purchasing and disposition regarding inventory changes and supplier management and comparison with the new location managers.
Interface coordination during the relocation, clarification of responsibilities.
Introduction of additional quality gates due to a systematic quality problem and management of a task force to analyze the problem and initiate remedial measures.

Results:
Due to start-up problems and returns for rework, schedules were extended by 3 weeks. The costs were only slightly over budget. There was no production stop or critical delivery situation. Specialist staff were gained to support start-up.

Summary:
The process and start-up plans were too optimistic. Quality problems of parts already delivered were insufficiently taken into account and the resources for the required rework were not available.
A lack of process and machine knowledge led to considerable start-up problems. Sampling of new parts during a relocation of the worker should be avoided. Employees in key positions should be suitably rewarded based on results using a bonus system.

Case Study 6: Interim Manufacturing Director

Temporary occupation due to illness-related absence of the newly appointed Manufacturing Director

Customer Problem / Current situation:
Due to the illness-related absence of the Manufacturing Director during the reorganization of the company, the production was left without a leader. Many quality and delivery problems were assigned to manufacturing. The interfaces in the organization regarding tasks and responsibilities were not clearly defined after the reorganization.
Despite excess stocks, there were supply bottlenecks for some products. Failure to meet delivery quantities only had consequences if complaints came from sales and management Production deviations (target ACTUAL to TARGET) due to malfunctions (scrap, rework, machine
failures, unstable processes) were nor recorded correctly and were processed either slowly or not sustainably.
Some steps / processes were not defined and time-rated, so that there were discrepancies in the Target Actual observation of quantity and resources required Unstable processes during prototype production were handed over to production due to delivery pressure and were not further optimized.
There was no cost awareness in the entire organization.
Question to the interim manager: Do you see yourself able to define and implement clear processes in the organization with the aim of solving quality and delivery problems?

Approach / Procedure:
Personnel talks with all production managers about their assessment of the current situation.
Coordination of regular appointments in production and cross-departmental daily status discussions with leaders in production (planning, control, process department, maintenance and repair).
Monthly coordination with production planning about quantities and necessary resources.
Introduction of shop floor management and end-to-end reporting.
Implementation of a cross-departmental “task force” and introduction of action plans (PDCA cycles) to reduce delivery backlogs to zero and rework to the minimum.
Revision of the organization in production and optimization of the process organization (production manager, team leader, trainer …).
Job descriptions have been adjusted / clear definition of their tasks and responsibilities in cooperation with the HR department.
Seminars for executives have been initiated / A system driver concept has been developed.

In-place measures:
Through closer coordination with planning and sales, production was adapted to market demand.
Introduction of shop floor management / daily and weekly status meetings
Introduction of a monthly production report for all production managers / areas.
Revision of the Train the Trainer concept.
Introduction of one-piece flow philosophy.
Introduction of clear processes (e.g. when starting up and handing over to production).
Revision of all quality criteria and the manufacturing processes.
Monthly meetings on the part of the controlling department about the operating result (target to actual) and the deviations / definition of measures, persons responsible and dates.
Cooperation with the process department regarding the definition of a maintenance strategy.
Coaching program for all production managers / seminars for team leaders and trainers.
Clear handover processes from development to production (from prototype to series).

Results:
All delivery backlogs were corrected in the medium term
Rework costs have been reduced by around 50%.
A productivity increase of 30% was achieved, among other things, through the introduction of lean measures.
Clear assignment of tasks and responsibilities in all departments.
Reduction of approximately 80% of overtime.
More stable processes and therefore a reduction in quality costs.
A culture change program was implemented.

Summary:
A reorganization was introduced, and structures changed, but the processes were not adapted. This led to overlap of responsibilities or ambiguities about who is responsible for what in the new organization. This led to extreme insecurity among executives, stagnation and demotivation of all employees. First the processes should be defined, and then the necessary structures and the organization follow. It is only through transparency, including costs, that employees’ awareness of competitiveness can be increased.