Cost out – Implementing Lean Value Streams
Company:
Miba Friction Division
Laakirchen, Austria
Information:
1B € manufacturer of high-tech composite-components for clutches and brakes in automotive and off-road applications
Period:
February 2018 – January 2021
Role:
- Managing Director Operations
- COO Friction Division
- Interim Assignment
Responsibility:
- 200 Mio € business, accountable for six global sites, 1300-employees
- In particular: the plant was the Slovak plant, about 650 employees, 65mio Eurosales
Situation:
- The plant was a metals fab shop – stamping with subsequent operations.
- EBIT and ROCE dropped below benchmarks as the plant managed a 35% upturn in volume.
- Lead times were too long, information on orders was unreliable, costs and inventories were too high. Customer relationships were stressed.
- The task was to transform the plant to a higher volume, reduce throughput times and bring transparency to the processes.
- The aim was to bring EBIT and ROCE – at higher volumes – above the benchmarks.
Challenge:
- The operations were set-up in work centers – creating waste in movement and wait times.
- SAP and scheduling software were only partially implemented with work arounds.
- The product portfolio was wide, and references had complex up to 14 routings steps.
- Delivery reliability was in the eighties versus a customer commitment of ninety eight %.
- The plant and the team were operating in ways established ten years ago.
Execution:
- While the overall operation may have been overwhelming, I recognized that there were opportunities to segmentize the product portfolio. Based on the segmentation work centers could be reconfigured into value streams to drastically reduce lead times, inventories, and costs.
- I strengthened the leadership and trained the plant team on lean manufacturing with value streams to get buy-in and excitement.
- I aligned the plant team with corporate and external resources and together we took a deep dive into analyzing the current state and based on it developed the future state.
- I tackled the most difficult part early on: realigning the organizational and reporting structures and convincing key players of the need to change.
- I attended work meetings to encourage, give tips, and expel when necessary. There were regular reviews to move the project forward, eliminate obstacles to field support, and adjust.
- Initially we wanted to separate out one value stream. Once the team realized the positive effects, they, with some encouraging and challenging, came up with another four value streams.
- Presenting the future state with EBIT and ROCE commitments to Corporate Management lead to approvals for investments.
Result:
- A proud, engaged team that finished the project within 24 months.
- Over 16 mio Euro invest with a payback of less than 2.5 years.
- Reduction of lead times by up to 95%, from 10 days to a few hours.
- Reduction in direct labor. Reduction in WIP and overall inventory by 30%
- EBIT and ROCE improvements will be evaluated after Corona distortions.
