A Dutch food group had taken over the German production plants of a brand company in the milk processing industry. The post-merger integration was very slow and not very successful. Several managers had been hired, but left after a short time. The company seconded the current interim manager as technical manager in order to make the technical organization efficient and get the galloping costs under control.
Inadequacies in maintenance and process control identified
A number of challenges were revealed to the interim manager at the start of the project. The most serious deficiencies included high technical utilization losses due to a lack of maintenance strategies and a lack of coordination with production. Information systems such as SAP PM were hardly used: As a result, there was a lack of reliable key figures; key performance indicators (KPIs) were also not defined. To make matters worse, managers and employees were demotivated by the staff changes and the failures during integration.
Managers and employees involved in finding a solution
The current interim manager was aware that the restructuring of the technical area could not be implemented without the workforce and against the resistance of the employee representatives. For this reason, he attached great importance to involving managers, employees and the works council in all considerations from the outset. By holding numerous discussions, the interim manager succeeded in breaking down old structures and awakening new motivation. At the same time, he gathered knowledge about the "pain points" in technical operations.
Utilization rate increased by 20 percent through optimized maintenance
One of the first sub-projects was to effectively limit the high utilization rate losses of the production facilities. The main reason for this was "fire department maintenance": the systems were essentially repaired or serviced when it could no longer be avoided. This naturally resulted in unplanned downtime. Thanks to coordinated maintenance planning, the interim manager was able to reduce the technical efficiency losses by more than 20 percent within a short space of time.
Integrating the sites into the parent company's control systems
In the next step, the interim manager set about integrating the acquired plants into the parent company's system control. He integrated key performance indicators specified by the Group, such as overall equipment effectiveness (OEE), the degree of order planning, material rejects, stock levels or budget compliance (OPEX, CAPEX) and open orders, into the cross-location SAP system. In order to be able to document the progress of the project at any time, he added location-specific key figures to the KPI system.
The interim manager used the data to develop clear dashboards. In newly introduced daily and weekly regular meetings, managers now exchange information on the basis of easily recordable metrics. This has considerably simplified collaboration between the divisions - and quickly led to better results at lower costs.
Increased warehouse service level and reduced number of spare parts variants
A basic prerequisite for fast repairs is the availability of spare parts - and this was not the case at the German sites. In order to improve the service level of the warehouses, the interim manager's team analyzed the stock levels. Based on the results and the new maintenance concept, the missing parts and assemblies were then replenished. This accelerated necessary repairs and further increased system availability.
Standardization of materials also reduced the number of variants. This also reduced costs, partly because fewer suppliers were now able to provide larger quantities at lower prices.
Technical post-merger integration successfully completed after 24 months
After a total of two years, the post-merger integration of the technical division into the new parent company was successfully completed. Plant availability was at a very high level for the industry - and costs had fallen significantly. In addition, a new motivation had spread among the workforce and managers, which had a positive effect on employee satisfaction and motivation throughout the company.
