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Case Study

Safeguarding the site thanks to lean value streams

Increasing efficiency and reducing costs at a valve manufacturer

A well-known manufacturer of premium valves wants to strengthen its top position in international competition. Securing the location in Germany has top priority: with hard targets for the entire operations area and with the support of ROI-EFESO, a plant location is completely repositioning itself as the factory of the future. 

Challenge

A manufacturer of premium fittings uses ROI-EFESO to bring the processes and structures of a plant to a new performance level. The ambitious project goals cannot be achieved via a bottom-up approach with on-site optimizations - a complete realignment of the traditionally grown, functional production structures is necessary.

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ROI-EFESO approach

The project team combined a comprehensive complexity reduction initiative with a value stream-based design of production and logistics processes - achieving maximum reduction in manufacturing costs. Zero-base dimensioning of indirect functions and their integration into the value streams resulted in lean overhead.

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Lessons learned

The early development of a target image of the "lean factory of the future" makes the dimension of the need for change transparent. In addition, employees should be intensively involved and qualified in the application of lean principles.

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ROI-EFESO success model

The focus on a value stream-oriented and lean production structure and its consistent physical implementation on the store floor proved to be key success factors in the project.

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Challenge ROI-EFESO approach Lessons learned ROI-EFESO success model

Target: bring the OEE above 85%.

Ambitious goals for a high-performance plant

The brand has achieved a high level of recognition worldwide with quality products "Made in Germany".  In order to continue this success story with further chapters, the company management decided on the far-reaching restructuring of a German plant site. To this end, it formulated clear objectives: Manufacturing costs as well as inventory lead times were to be reduced significantly, with the aim of achieving an overall equipment effectiveness (OEE) beyond the 85%. 

In addition, it was necessary to meet the already high and increasing customer demand, i.e. to realize rising volumes with the capacities already available. The aim was not only to increase employee productivity by 25%, but also to raise the level of service and delivery quality in the plant to a new level - for example, by significantly increasing the proportion of products manufactured without defects. 

To realize these and other results, the plant management brought ROI-EFESO on board as an implementation partner. A joint project team with production and logistics experts examined the processes in the plant from the store floor to the boardroom.
 

All direct and indirect functions in the plant are being redesigned.

Complete realignment of plant structures

At the start of the project, the team was confronted with a particularly complex task in which three strands of action had to be reconciled: 

  1. Ensure and increase customer satisfaction, especially via service levels, delivery quality and a shorter time to market through an improved industrialization process.
  2. Improve all key ratio & efficiency KPIs, such as manufacturing and quality costs as well as inventory levels and lead times. 
  3. Implement a far-reaching transformation process together with all employees. 

Naming the goals for each individual subarea was the easy part. A greater obstacle lay in coordinating these three strands of action simultaneously during the implementation of measures so that the best possible result is achieved in the end.

Doing the right things – and doing things right.

Four modules for simultaneous improvements 

To meet these challenges, the project team combined a comprehensive complexity reduction initiative ("doing the right things") with a value stream-based design of production and logistics processes ("doing things right"). In doing so, it not only achieved maximum reduction in manufacturing costs. The zero-base dimensioning of indirect functions such as quality, maintenance or logistics control also led to lean overhead. Their integration into the value streams further improved the cost position. 

The team divided the overall project into several modules, which were implemented largely in parallel:

Module 1: reduction of complexity

  • Identification of the main complexity drivers in production and logistics, e.g. non-completed relocations, products with low value-added content, grown supplier relationships in the plant network, simple manual production processes. 
  • Based on this: definition of future core competencies, portfolio streamlining, optimization of intercompany supplier relationships, improvement of discontinuation management.

Module 2: new plant structure – concept for realignment of production and logistics processes according to lean manufacturing principles 

  • Reconciliation of requirements from central supply chain management to the plant: make-to-stock, make-to-order, differentiated service levels, integration of new projects. 
  • Definition of future value streams and development of a plant segmentation concept, e.g. segments for complex high runners, simple high runners, low runners. This included the allocation of operating resources and personnel capacities to the manufacturing units. 
  • Definition of control points, stocking levels, delineation of push-pull control.
     

Example for a definition of future value streams

Module 3: : increasing efficiency in indirect areas

 

  • Identification of waste potential in functions such as maintenance, logistics, quality, toolmaking.
  • Quantification of potentials through zero-base approach and ROI-EFESO benchmarks.
  • Definition of approaches for reorganization and integration into the manufacturing segments, incl. re-dimensioning of the required capacities.

Module 4: organizational development and qualification

  • Development of the plant organization, derived from the value stream and segmentation concept.
  • Creation of a management and target system for controlling the autonomous units.
  • Creation of requirement profiles for segment leaders and reflection with the status of qualification.
  • Definition of new role descriptions and derivation of target group-specific qualification programs based on these.

 

Parallel to the concept development and the physical change of the plant structure, a comprehensive and stringently controlled program for the implementation of structure-independent measures with fast payback / ROI was set up:

Making the need for change transparent

Even in the early project phases, the following procedures and experiences proved to be important levers for implementing the goals:

 

  • The early development of a target image of the "lean factory of the future" makes the dimension of the need for change, especially in the physical processes in production and logistics, tangible. This target image proved to be an essential reference point for the structured concept and implementation planning of the factory. The lean reference also provided important indications of complexity drivers and starting points for reducing or avoiding them altogether.
  • Transformation management and leadership are crucial to the success of the project. The intensive involvement of employees and their parallel training in lean principles enables a high level of acceptance of the jointly developed solutions and motivates them to participate. In addition, a convincing commitment and statement by the management team to the target concept dispels reservations and prevents compromise solutions.

The image of the "factory of the future" sharpens the eye for the essentials.

Using experience from best-practice plants

The focus on a value stream-oriented and lean production structure and its consistent physical implementation on the store floor proved to be key success factors in the project.

 

The conviction of managers and employees for the future concept and its successful implementation was achieved through visits to best-practice plants, a highly experienced team of consultants, and intensive communication between all players in the transformation process. As a result, the valve manufacturer was able to achieve the goals set - and optimally prepare the plant location for future challenges in international competition.