The welding industry has seen, as have many other industries, an increase in competition as well as a stronger focus on quality and service levels. This also has a knock on effect through out the supply chain including with suppliers. Our Customer is a global player in the supply of repair and maintenance equipment to the manufacturing industry. To remain a World-class supplier (quality, service levels, increased productivity and secured cost savings) our customer required a 'step change' in Supply Chain efficiency and a new way to manage its business internally. They required a shift in culture at every level in the organisation involving the creation of robust and transparent work processes. These would need to be supported by the development of a management system that enabled the business to accurately measure performance and motivate staff in sharing best practices in a learning environment.
The Company turned to Magma Projects. Magma Projects' track record in delivering Project Management expertise in delivering improvement programmes with defined bottom line results coupled with true customer centricity was a key factor in this choice.
By using Magma Projects expertise in developing one regional site, our customer is now rolling this project out to other parts of the global organisation.
Magma Projects approach:
>To analyse all processes, work methods and current business initiatives searching out 'non-value adding steps' and other inefficiencies.
>To create an atmosphere for change at all levels in the organisation
>To design and implement a new organisational structure creating a proactive, action-based culture.
>To define and install 'Key Performance Indicators' (KPI's) to monitor performance, and a Management Information System that would monitor all essential activities, ensure actions are taken and results achieved.
>Backlog orders (orders overdue) reduced with 50%
>Delivery performance improved from 75% to 95%
>Lead time for delivery of A products reduced to 0 days.
>Lead time for the returns process reduced from 30 days to 5 days.
>Labour productivity improved by 30%
>Established a consistent way of working
How to meet the challenge:
Magma Projects joined forces with internal Project Managers spending five weeks analysing all company activities to identify issues and challenges that could be impacted, how these could be improved, and defining the positive impact on business goals. The project team engaged all levels of the organisation through interviews, workshops and observations of day-to-day operations in order to get a full and accurate picture of the current state. The outcome of this analysis formed the basis for a solid Project definition. The global project was collaboratively managed and carried out over a 18 month period.
The analysis concluded that critical changes were needed in four key areas:
>Supply Chain - Implementing a new supply strategy and redesigning the supply chain, across logistics, production warehousing and supplier management.
>Organisational Design - Transforming the organisational design to focus on service delivery and the cost effectiveness of customer service functions.
>Performance Management - Creating a performance based culture, where review and challenge of Key Performance Indicators had become a part of the daily activities.
>Management Information System - Installing a management information system with clearly defined roles and responsibilities and a robust structure for planning, controlling and reviewing performance.
A 'Change Programme' was initiated that would develop, design and implement changes, taking into account organisational differences in various regions and countries so that a rollout of the initiatives would be smooth and efficient.
Magma Projects worked together with a 'Task Force' of hand picked individuals chosen by the customer . This team worked together with the Magma Project Managers across the business delivering the changes and ensuring the end results.
Magma Projects supported this work stream as a 'Facilitator'. A new supply chain strategy was defined that moved the warehouse from a 'push to pull' environment. Later in the process Magma Projects assisted in the implementation of this strategy by training and coaching key people who were directly affected by these significant changes.
Redesigning the organisation:
Magma Projects and the customer thoroughly reviewed the objectives and effectiveness of all business functions using proven tools and methodologies. The group determined the true level of resources required and improved business processes to ensure stretching service goals would be exceeded. It was critical that the transition to the new organisational design went smoothly, as maintaining service levels were critical. Magma Projects ensured that this happened by supporting, training and driving key players during the implementation phase.
Performance based culture:
Through workshops and review of all processes, the team identified what was driving the business. Key performance indicators were developed and installed to monitor performance and people were trained in what actions should be taken to continuously learn, improve and most of all deliver results.
Information management system:
To compile all changes a management information system was needed so to drive the organisation on a daily basis. The system that was developed ensured that processes were monitored at the right frequency and made sure that actions were taken when needed to drive performance. Only by working closely with management, guiding them through the development of a rigorous system was it possible to create a culture where plans are made and reviewed, and people take responsibility for the actions that are laid upon them.