The interim manager was repeatedly commissioned by a medium-sized mechanical engineering company in Germany as project manager for a total of 3 interlinked projects within a year. The first project involved analyzing production and logistics. Subsequently, the aim was to respond better to market requirements, accelerate delivery capability and reduce costs, among other things.
Staff shortage at supplier reduces OTD rate to just 40 percent
The internationally active company produces and sells systems for storage and conveyor technology. Standard and special machines are manufactured at the German site with varying degrees of vertical integration. Purchasing is mainly carried out in Eastern Europe. The required capacities there fluctuate between 50 and 200 percent. The fluctuating demand is covered by temporary flexible workers (temporary employment). However, this personnel is not always available in sufficient numbers and is also too expensive. As a result, delivery times are extended. The on-time delivery (OTD) rate sometimes fell to just 40 percent.
One possible solution would have been to relocate production entirely to Eastern Europe. However, this was not desired by the owner, as the company's customers strongly demanded machines of German origin.
Consultancy specializing in the Eastern European supplier market sought and found
Due to the complexity of the task, the company and interim manager agreed to bring a management consultancy specializing in the Eastern European supplier market (SCM) into the project. The interim manager acted as project manager. In close coordination with the client, he searched for and found a suitable management consultancy.
Value stream analyses and multi-moment analyses for production and logistics
To begin with, the interim manager worked with the management consultants to gain a comprehensive picture of the product range. He also used brief interviews with the division and department heads to develop a value analysis (soft facts). The consultants then analyzed the internal and external production processes and the associated logistics processes using simplified value stream analyses and multi-snapshots.
Key figures and reference values developed to measure the success of the project
All the data from 2018 (and relevant previous years) were recorded in parallel with regard to quantity structures, profit & loss (P&L) and productivity. The interim manager used this data to create project-relevant key figures and reference values to measure the success of the project. On this basis, evaluations were made in comparison to the market and the region. The consultants jointly prepared make-or-buy analyses and identified potentials.
Successfully reaching consensus on different management objectives
One of the major challenges of the project was to moderate the different and sometimes erratically changing objectives of the owner and the managing directors involved and to steer them in a target-oriented manner. Through open, direct and respectful communication, the interim manager made a significant contribution to finding a consensus in many discussions and maneuvering the project towards a common goal.
Temporary takeover of the production management
During the project implementation, the interim manager was asked to take over the production management on a temporary basis, as the current job holder urgently needed to take on other tasks within the company.
New production strategy ensures appropriate capacity utilization and flexibility
As a result, the interim manager developed a new production strategy that can compensate for major fluctuations in orders. Greater flexibility is achieved, among other things, by further developing and qualifying existing and new Eastern European suppliers. The plan for the future is for suppliers to deliver not only parts and smaller assemblies, but also large assemblies or entire modules to the German plant.
This will create flexible capacities. Depending on the order situation, the company's own production can be utilized economically and not overloaded, which was not possible with the previous high proportion of outsourcing. The additional capacity required is shifted flexibly to the suppliers. This means that the delivery times required by the market can be met and, in some cases, even undercut, which in turn represents a sales argument.
Costs in production reduced through investments in automation
The costs in production were significantly reduced through investments in the automation of series production. In order to significantly increase productivity, the interim manager recommended that the company switch production and the company to lean management methods. A decision on this is still pending.
