Rapidly optimizing the planning process to improve production efficiency and throughput using a flexible onsite/offsite delivery model
This story is for executives who:
- Need to rapidly fully align production planning across stakeholders in order to meet demand
- Are experiencing service and revenue issues as a result of an inefficient escalation process
- Believe SAP technology inefficiencies are causing their production planning issues
The Challenge
Following a successful engagement where we helped this PE-owned specialty chemicals & materials company set up a new supply chain operation post carve-out, the CEO invited Maine Pointe back.
This time, we were engaged to help with the challenges the company faced with production planning, downstream bottlenecks and escalation management. Leadership had already reached the conclusion that these issues resulted from failings within their SAP system and so initially wanted Maine Pointe to focus our attention on the technology.
Integrating business planning to improve efficiency
Maine Pointe began by mapping the company’s processes. This quickly identified that the problems the client was experiencing did not result from failings in the technology, but were the result of a lack of clear operations process. Integrated business planning was immature (level 1 on the TVO Maturity Pyramid™). Planners in each plant were carrying out the transactional steps to process an order without considering their impact across the end-to-end supply chain. In addition, plants were taking calls from planners as directives, which was causing a scramble to get to the front of the line for production.
Looking closely at processes by plant, we found some of the foundational areas of the SAP process, such as ORCI®, communications plan, and governance, were broken. The business needed to improve prioritization and develop a system for realistic assessment of time scales. Our simple diagnosis was that to change the results, the client would need to change the process. To bring about this transformation and help achieve operational excellence we:
- Facilitated a SWAT session where key stakeholders agreed goals, criteria and ownership of the escalation process
- Put together an integrated escalation process which aligned sales, plants and organization
- Created a cadence for the raw materials process (this was an area which the supply chain manager had not previously focused on). This, along with escalations, was one of the major causes of lost time in the plants
- Updated the SAP with an accurate view of plant capacity (previously the production team had been inputting 30 days regardless of true lead times)
- Developed a ‘made to stock’ road map to overcome different miscommunication regarding made-to-stock, made-to- order or both. Lack of make-to-stock was costing $millions in lost opportunities
- Developed 9-18 month and 30-60 month road maps to fix lead times and get to the root cause of the organization’s issues
In just eight weeks, production efficiency and throughput improved significantly as the business transitioned from a chaotic system to a structured, focused and accurate cross-functional process. Business planning maturity increased to level 3, with a road map in place to reach level 4.
The Results
Maine Pointe implemented its flexible onsite/offsite delivery model to:
- Rapidly drive production efficiency and throughput improvement and transition the business from a chaotic system to a structured, focused and accurate cross-functional process
- Lower requested production schedule changes by 33% and reduce unwarranted priority changes by 30% Increase integrated business planning maturity
- Develop an integrated, effective and efficient escalation process which reduced issues by 20% in the first two weeks
- Create a new culture for the business
- Free up employee time and enhance satisfaction
Lessons learned for other executives
- Technology is not a substitute for an efficient and integrated process
- Your SAP is only as good as the information you put into it
- Production issues and complaints escalation are only symptoms; CEOs need to get to the root cause