Challenge
Our client, a world leader in the field of engineered capital goods for energy and telecoms, was struggling with production reliability at all stages of the manufacturing process. These reliability issues were leading to last-minute changes in the production schedule, and these were having disastrous knock-on effects, such as extra line stops for unplanned product change-overs, ever-shrinking time slots for equipment maintenance, falling output, overtime, increases in work-in-progress and shortages of product
carriers as they were having to be used to store unfinished orders.
Demand was increasing strongly; therefore, production had to be brought under control in order to generate reliable Right First Time (RFT) output at sufficient levels. In addition, there was constant pressure from HQ to improve the cash flow by reducing headcount and working capital.
The production shift supervisors and maintenance management team were seen as the critical group of staff that needed to turn the situation around. Axisto was called in to work with the shift leaders to create a focussed and high-performing team within the production and maintenance
leadership group that would drive performance forward.
Approach
Together with the operations management team, we chose to focus on the production supervisors first and to include maintenance later in the programme. As each of the supervisors had a very different vision of what he was trying to achieve, our starting point was to create a detailed, tangible, operational vision of production: what it would look like, how it should be run, how the roles of the operators, supervisors and production leaders should be defined in terms of their responsibilities and accountabilities. The focus on roles, responsibilities and accountabilities was paramount; these were defined for everyone, right down to the lowest level in the organisational structure. The vision was also quantified, with the ambition of increasing reliability in order to hit the following year’s budget of producing 25% more output. In the work sessions, we agreed what was already working well and where improvements could be made.
Based on this input, we co-created an implementation plan and a project governance framework. This approach generated a lot of energy and a strong desire for change. There was also a dawning realisation that this was a big task to take on.
To get buy-in from the various shifts and functions, people needed to see that current problems were being tackled and that their jobs were being made easier. We got things started by focussing on the shift handover between the supervisors. We installed a Performance Management Framework (PMF), whereby each shift’s performance and issues were being recorded and discussed. This allowed us to start managing with factual data. It soon became clear that the labour planning was ineffective, with insufficient
and inaccurate information around skills and availability of people. In addition, the data was starting to highlight that equipment reliability was having a major impact on operational performance.
This was the starting point for the maintenance work stream. As the production supervisors made a start on improving the labour planning tools and process, the maintenance team assessed the way they worked. Axisto helped them to understand what a world-class maintenance standard looked like and how it operated. The maintenance teams were able to measure themselves against this
benchmark. Individual team members gained many new insights and began to understand what they would have to change in order to make improvements in their own area. Just as production had done, the maintenance teams created an operational
vision of how they were going to run their department as well as an implementation plan detailing how and when they would make the changes.
Historically, the production and maintenance functions had tended to blame each other as issues arose. The two functions now realised that they needed to work together to move forward. Therefore, in joint sessions, they integrated their individual visions and implementation plans. Together, they agreed their joint Key Performance Indicators (KPIs). They then agreed the KPIs that each function would need to achieve in order to meet the shared operational targets. This reconfirmed that both
departments existed to deliver high quality products On Time In Full (OTIF) and at the required output levels.
Embedded in the project was a focussed team development programme for the supervisors. They were very clear on how they wanted their highperforming team to work. However, getting there proved to be a genuine struggle. A major development was made when two supervisors were moved into another role and a new supervisor was hired. This was seen as the defining step that enabled the team to start to grow.
Results
It was noticeable that the atmosphere in the factory had started to change from one of finger-pointing to a more constructive one of cooperation and joint responsibility. By working more collaboratively, people at all levels, from shop-floor workers to departmental managers, had started to trust each other rather than blame each other.
The plant’s performance began to stabilise and improve. Strikingly, halfway into the project, the annual production output was ahead of budget and payroll costs were below target. The experience gained from being part of the Axisto project led many of the employees to recognise the potential for further improvement initiatives both in their own departments and in other support departments, such as logistics and product design.
- Production output increased by 30%, well beyond budget.
- The cost of poor quality was reduced by €3.5 million.
- Payroll costs were reduced by 20%, well beyond budget.
- The factory was awarded the accolade of being the best factory in the global division.
The deep-seated change in attitudes within the functions and their staff has led to an on-going culture of improvement. On a recent visit, it has been possible to see that the momentum from this intervention has continued, and the effect has moved across a wider part of the organisation as the process has touched other departments and processes within the business. The project is now seen as having been a very necessary catalyst for change, which has continued to be nurtured by senior management in the business.
