Operational Excellence

Implementation of Lean Manufacturing

A BU of large American chemical company had tried to keep its competitiveness up by a series of cost reduction projects over the last 5 to 10 years. All business functions had been squeezed, and the latest initiatives had shown diminishing returns and a negative impact on employee morale.

Having implemented Six Sigma in the early 90’s, senior management believed there was still a lot of non-value added activity, and realized the key to success was to engage all employees in a non-threatening improvement program. Having heard of successes at other companies, the company started to look at Lean Manufacturing as a philosophy to do things differently.

Implementum was involved from the early stage of the process to help identify the improvement potential and set up an implementation organization for the manufacturing units in Europe, up to the actual implementation. The focus was on uptime, yield, delivery time, and inventory reduction. The roll-out was “event-based”, through dozens of “Kaizen Events” where different teams tackled specific issues. In this way, the entire organization was engaged, trained and energized, and changes were implemented on the spot. 

Several events focused on workplace organization and 5S, others on visual management (by implementing “Andon” systems), others on change-over time reduction (using SMED techniques), others on pull-systems and flow, and others on simplification of administrative processes. Each event had an event leader, while the Implementum consultant worked behind the scene to help with preparation and training.

After about half a year, consultant support was gradually reduced and newly appointed Lean Champions took over the further roll-out of the program. One of the Kaizen teams won the company quality award for improving the change-over time of an entire chemical plant by 50% - which created so much free capacity that a €90 million expansion project could be postponed for several years.

Supply Chain Transformation for a Powder Coatings Manufacturer

A Powder Coatings manufacturer was facing declining profits and stagnating growth, while their main competitor pursued an active take-over strategy acquiring small players in different regions. 

To better understand how to compete, the company identified 3 different customer needs segments: one where the basis of competition was the ability to supply non-stock items at an acceptable leadtime, one where availability and next day delivery was the key, and one which was about high volume, low cost fit-for-purpose products. 

The issue was that the company had been addressing all segments with a “one size fits all” approach, leading to lead-time issues for non-stock products, and uncompetitive costs and over-service in the other segments. Being able to compete on the right basis would mean a significant business opportunity: the non-stock segment could easily grow by 30% if delivery times were reduced to 5 days.

Implementum assisted the client in this analysis, and to align the asset base (the company had 6 sites in Europe) with specific customer needs segments. In the future, each site was to focus on a specific segment. A 5 day order-to-delivery process for non-stock items was defined, based on a best-practice from one of the sites, and a European Sales & Operations Planning process was introduced. At all the sites, Lean Manufacturing techniques were used to improve the flow of product and reduce inventories. The overall business impact was a €4 million PTOI improvement and a 20% working capital reduction.