INTRODUCTION
Crop nutrition companies produce and distribute fertilizers and other agricultural inputs to optimize plant nutrition for crop production. They aim to enhance crop yields and maximize agricultural productivity.
Our Client is the largest producer of concentrated potash and phosphate and employs more than 10,000 people in 6 countries.
THE CHALLENGE
In production areas, a well-run maintenance area plays a crucial role in maintaining reliability and efficiency and maximizes productivity in a production facility. Importantly, companies must extract these benefits against a minimal viable cost.
Renoir was invited to analyse business processes and the Management Control System currently being used in the Maintenance area to understand the levels of operational performance and the impact of performance on costs and throughput.
OPPORTUNITY ANALYSIS
After a thorough 4-week analysis at 3 production plants, the following opportunities were identified:
- Labor productivity improvement
- Effectiveness of and adherence to management procedures
- Improving the efficiency of current business processes
- Reduction of supplier’s contract costs
- Organization structure
The analysis also assessed maintenance organization, processes and practices against world-class standards, which provided clarification with respect to the processes and tools that needed improvement. This included a standard set of performance indicators by which performance could be assessed and improved.
PROJECT APPROACH
The 40-week improvement project was structured around improvements to maintenance processes and management systems. The changes proposed effectively constituted a full organisational redesign for the Maintenance division. The Client and Renoir collaborated in the Focus Process®, where, to foster engagement and ownership, Management Action Teams (MATs) were set up, focusing on Planning & Scheduling, Field Execution and Standardization.
MAT members were assigned on a part time basis such that they carried out their normal day-to-day duties during the program. However, they were key in defining targets and implementing the necessary changes within their areas of responsibility. A multi-disciplinary Taskforce was assembled from staff from the Centre of Maintenance Excellence from each of the seven plant locations. A Steering Committee, made up of senior Management, met every two weeks to assess progress, provide guidance, formally approve proposals to changes in processes and systems and address any barriers to progress.
“Renoir has brought us the knowledge and methodology to extract measurable improvements. The results initially proposed were delivered and, in some cases, even exceeded.”
Director Maintenance CoE
IMPLEMENTATION
The implementation commenced with the definition of performance targets and new key performance indicators, their definition and how they were to be measured.
Development started on the changes to achieve the performance targets and after 10 weeks the procedures, controls and reports were approved. Full ownership of the project was vested in the MATs and Taskforce.
The new Maintenance MCS was rolled out at the largest site first and the TaskForce was being trained to complete the installation at the other locations. Typical activities that were carried out during the implementation included a review of all as-is management tools, improvement opportunities and new tools required.
The new standardised Maintenance MCS was being implemented. KPIs and management control system elements were introduced including planning and programming best practices. A Master Schedule ensured resources were efficiently allocated and workloads levelled. A new work order management control system was implemented. We developed the Supervisory Behaviour Profile and redesigned roles and responsibilities.
All new tools, flows and processes were built following collaboration between the MATs and Taskforce and were validated by the Maintenance Managers. Staff impacted by changes were trained and coached by the Taskforce and Renoir consultants. After the main implementation, a sustainability phase used behavioural auditing to ensure that new working practices were being trained and coached to ensure full adoption.
KEY RESULTS
4.2:1
ROI
13.8%
labour cost reduction
9.4%
reduction in contractor costs
12%
materials stock reduction value
Full organisational redesign in Maintenance
Implementation of the Maintenance MCS
CONCLUSION
Whilst it is critical that Maintenance areas properly enable output efficiency, Maintenance activities can be a significant expense in production operations. Ensuring that maintenance areas are cost-efficient helps in controlling overall operational costs, maximizing profits, and staying competitive in the market.
Whilst Maintenance functions often present good opportunities for cost optimisation, they are often overlooked for various reasons. Either the sole focus is on production, costs seem unavoidable, or the Maintenance costs itself are not clearly visible or reactive in nature. Lack of maintenance expertise may also play a role.
In this case study, through a 4-week analysis, Renoir identified and succeeded in delivering on opportunities for labour productivity improvement, effectiveness of management procedures, efficiency of current business processes, reduction of supplier’s contract costs, and organization structure.
Importantly, the systems, processes and controls implemented and the training and cultural changes achieved provide a platform for the Client to keep improving in coming years.
