Case Study

Interim COO for Strategic Reorganisation

An experienced Chief Operations Officer supports a medium-sized company in realigning and optimizing its production and delivery performance.

By Stephan Franken

The Client

Our client is a medium-sized company that manufactures both series products that are sold via wholesalers and products for a project business with direct sales.

Production takes place in two European production plants.

The Challenge

At the request of the parent company, a reassessment of the strategic positioning was to be carried out. The review and adjustment of the operations strategy was a central component of this. Due to the lack of management expertise and the project-like character, it was decided to deploy an interim manager in the role of COO with responsibility for the production plants, purchasing and supply chain management. In addition to the strategic task, an improvement in delivery performance to an OTIF value of 93% was to be achieved operationally. A central challenge arose from the Covid-19 pandemic. Despite the disrupted supply chain, it was necessary to ensure continuous delivery capability.

The Solution

A number of analyses were carried out as a basis for developing the operations strategy. In addition to manufacturing cost comparisons, these included make-or-buy analyses, process analyses, and the recording and quantification of types of waste. Contacts were established with benchmark solution providers of IT and automation systems to design and calculate the detailed target structures.

In order to ensure the ability to deliver even during the pandemic, inventories were increased in a targeted manner. Weekly supplier coordination and individual supplier changes ensured a continuous supply of raw materials. The company's own operational capability was safeguarded by the early introduction and auditing of hygiene rules.

As a basis for OTIF improvement, all delays were documented, assigned according to cause and processed in daily production meetings. In addition, the underlying causes were identified and eliminated in weekly PDCA meetings.

The Results

In addition to adjustments to the manufacturing organization, for example, the operations strategy consisted of detailed planning for a new site concept with a payback of 12 months and the insourcing of a central purchased part with a payback of 10.8 months.

Delivery performance was continuously increased from an initial value of 86% and reached the target value after 5 months. This was made possible, among other things, by doubling the production output of a bottleneck unit.

During the Covid 19 crisis, delivery capability was ensured throughout. In close coordination with the works council and systematic workforce planning, it was possible to organize the highly fluctuating order intake in production in a cost-efficient manner. The additional inventory was reduced again after 6 months.

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