The interim manager was commissioned by a manufacturer of combined heat and power plants (CHP) to fundamentally restructure its production and sales processes. In his mandate, he acted as CEO.
Numerous disruptions to the production and value chain
The customer structure of the mechanical engineering company is very heterogeneous. For example, the CHP units are supplied to the agricultural sector for biogas generation or greenhouse heating, to energy suppliers (local and district heating, heating centers, swimming pools) or to industrial companies (process heat, cooling, electricity, steam) as well as mining (mine gas generation, mine gas compression) and waste management (landfill gas generation, organic waste fermentation). As a result, customers primarily order individual CHPs.
An analysis by the interim manager revealed numerous disruptions to the entire production and value chain ("order-to-cash" process). In costing, for example, there were no appropriate specifications from the management board - and the sales department concluded contracts before all technical requirements had been finally clarified.
Phase model for the project managers
In production, the project managers were not sufficiently involved in the purchasing of the components required for the construction of the BKHW. There was no continuous process and plan coordination. An organizational chart was only partially available and the strategy for the operational departments of the divisions did not exist. In addition, internal communication was rudimentary at best.
In order to organize the processes, the interim manager developed a phase model for project execution. He organized the value chain by identifying "gates" for the project managers and defining "gate reviews" - for the following areas:
- Project plan / projectKickoff / processing of supplements
- Tracking receipt of down payment invoices
- Definition of main components
- Continuous costing control
- Determination of necessary internal expenses
- Coordination of test / acceptance / commissioning
- Documentation / handover to service
- Receivables management
New processes for materials management and production
In addition, the interim manager implemented the following processes and requirements in materials management. Requirements:
- Exclusive procurement authorization (not bypassing purchasing!)
- Determining and updating delivery times for key components
- Controlling liquidity via conditions management
- Daily scheduling of the necessary forwarding agents including packaging teams
In production, the interim manager initiated numerous processes that, above all, enabled clear workflows. This included personnel scheduling that integrated the temporary workers. He identified the production of certain components as bottlenecks and outsourced many of them to suppliers. The interface to shipping was also redefined.
Production meetings and business reviews
The interim manager introduced weekly production meetings and monthly business reviews for the materials management and production managers. The production meetings served as a coordination forum for all projects in the company. The business reviews focused on the overall progress of the project and the company's own contribution to the results. Alternatives were evaluated in the reviews and operational performance and strategic positions were linked.
Economic and organizational success
The phase model was ultimately successful in ensuring the complete and economic fulfilment of customer orders. Control through "gates" and "gate reviews" proved to be practicable, also thanks to the transparent presentation of processes and clear responsibility in the process.
The economic results following the optimization are clearly positive. Delivery reliability has improved significantly. Stock levels in production have been reduced by 65%. The material return from the CHP construction sites now supplements 95% of the material balance from the bill of materials, construction site stock and assembly stock. All critical deadlines were met without exception - to the day.
