At a Glance
One of Renoir’s clients felt that its Engineering and Projects division offered significant opportunities for operational excellence and invited Renoir to support them in their endeavours. After analysis, the objectives for the Project were formed:
- Develop a fit-for-purpose Management Control System to improve operational efficiency and interdepartmental interfaces across the organization.
- Improve data and information flow to ensure better decision-making.
Key Results
Planning compliance
↑ 100%
Vendor Delivery Compliance
↑ over 120%
Unnecessary Purchase Receipts
↓ 70%
Parts Per Million (PPM)
↑ 70%
Inventory turn
↑ 38%
Goods Receipt Compliance
↑ 77%
Background
The client is a research-driven manufacturing company with four divisions – Engineering & Projects, Steel & Pipes, Electric Vehicles and Renewables. The oldest is Engineering and Projects (E&P), under which Renoir was engaged to work together for one of its projects. Catering to both domestic and international customers, the client is a leading manufacturer of melting and refining furnaces in India.
The Challenge
The client wanted to be future-ready by improving systems and processes to kick-start operational excellence drives across the organization. The client felt that its Engineering and Projects division offered significant opportunities. After an initial discussion with Renoir, the objectives for the Project were formed:
- Develop a fit-for-purpose Management Control System to improve operational efficiency and interdepartmental interfaces across the organization.
- Improve data and information flow to ensure better decision-making.
The Project went through 8 weeks of Focus Process® covering 8 departments, starting from Marketing, Sales, Design, Planning, Production, Procurement, Stores and Dispatch.
“Operational excellence is basic hygiene of any organisation and no strategy can be executed until the organisation is excelling in operations. With this project, we have laid a milestone for consistent alignment of capabilities and internal processes with the customer value propositions as the core.”
Head of Operations
To validate these opportunities, Renoir started by mapping the ‘As-Is’ end-to-end work order processes with overall lead times taken by each department. This helped to understand non-value adding activities in the entire process and define a scope for improving lead times.
Based on the findings of the process and management control systems reviews with the various departments, Renoir then conducted multiple data studies to validate and quantify each opportunity. It was evident both from the As-Is process reviews and the data studies that there was a clear misalignment between departments which was resulting in increased work order lead time.
This led to departmental firefighting with no one person or department monitoring the end-to-end process. Material availability also was identified as one of the major reasons for delays. Apart from materials, there were other contributors to delays. Delays in planning and design (in releasing drawings required by procurement which in turn affected materials availability) also played their part.
Looking to improve your operational efficiency?
What We Did
To ensure all identified opportunities were realised, the following activities were undertaken by Renoir:
- Work order planning: Streamlining end-to-end planning of work orders to ensure inter-departmental alignment.
- Short interval control: Re-structuring of the Planning department to create a section within it to monitor the progress of the end-to-end work order cycles and to escalate all delay issues at short intervals.
- Project Coordinators and improved planning system: Within the Planning Department, Project Coordinators were assigned for one vertical which will typically has 10-15 work orders at a time. To assist the project coordinators, an improved planning system was designed to capture all the activities required for dispatching an order and which also covered material planning.
Implementation
A total of 46 new system elements were designed and implemented across the entire value stream to ensure that opportunities identified during Focus Process® were covered. Two-person taskforces in each department and full-time support from Renoir consultants ensured that initial concerns from the various departments were addressed at the earliest and subsequently ensured ownership. The implementation phase involved the entire organization from shopfloor to board level.
As such, this phase involved the grassroots level of skilled and unskilled workers and covered top management. Initiatives like inventory optimization, work order costing and 5S were implemented with the full support of senior management, which, in turn, eased the change management effort.
To improve skill levels, a set of training sessions were carried out involving approximately 100 staff from middle management. Training sessions included:
Communicating with Impact
PDCA and Root Cause Analysis
Problem Solving
5S
Failure Mode Effect Analysis
Lean Manufacturing
Six Sigma
In the Procurement Department, multiple systems were implemented relating to vendor management and buyer performance management. Weekly departmental performance reviews with the Department Head were installed and were based on objective KPIs. Regular reviews with the vendors are now undertaken to evaluate their performance using one of Renoir’s tools.
The Results
Improved vendor delivery compliance was significant following implementation and has increased Procurement’s level of service to Production.
The major gap identified during the Focus Process® was a lack of alignment between departments resulting in various types of delays at different stages during planning and execution.
The project with Renoir helped in streamlining departmental communication for improved end-to-end planning and encouraged team working culture within the organization. As a result of improved planning and elimination of non-value adding, work order lead time reduced, and material availability improved to all time high.
“No organization can remain competitive in the marketplace without excellence in its operations. The project with Renoir has laid a strong foundation for us in this area.”
Joint Managing Director
Strengthen inter-departmental collaboration and contractor compliance.
