Processing industry & raw materials
Stable processes, low operational costs and sustainable investment planning

ConMoto redesigned the maintenance and implemented value-oriented maintenance for an internationally operating German chemical group. The project was based on our MaintenanceScoreTest^©which helped to analyze the maintenance and asset management maturity level of ten major plants. Within the scope of a well-structured process, our consultants calculated the deviation from best practice principles in cooperation with the client’s cross-functional core team.

Subsequently, they defined and prioritized the relevant design elements of optimization and detailed the implementation schedule for the business case. Several roll-outs were conducted and finished within a scheduled period of approx. four years.

On average, the following results were achieved at the respective production sites:

• Reduction of the fault rates by 30 to 70 percent
• Reduction of the urgency rates by 20 to 40 percent
• Reduction of the external service cost shares by 10 to 25 percent
• Improvement of maintenance cost rates by 12 to 20 percent
• Standardized KPI system including a well-aligned plant and cost structure as well as performance management
• Sustainably improved reliability engineering and asset management methodology

ConMoto optimized the workstream of a metal-producing company within the scope of a profit improvement project. Internal analysis had shown a slow, but continuous decline of the company’s earnings. The project included the production, maintenance, general services and investment planning units. The general objective was a sustainable increase of the EBIT by increasing revenue and significantly reducing costs within a time period of two years. The most important underlying targets were improving productivity as well as eliminating technical breakdowns and waste.

Optimization of all workstreams

A well-structured analysis of the four work streams production, maintenance, general services and investment planning covered the significant fields of action: structure, segmentation, and standardization of production or maintenance strategy as well as the continuous improvement of plants within the scope of maintenance. As for general services, the project screened inter alia logistic procedures and the facility management. Within the scope of the planning process, entire investment projects, R&D initiatives and the engineering were scrutinized.

Following the EBIT potential analysis, the project team moved on to a detailed implementation plan. The following key milestones were reached:

• Implementation of maintenance management and establishment of maintenance strategies for key aggregates
• Introduction of integrated maintenance planning
• Definition, optimization and implementation of procedures and key figures at shop floor level
• Optimization of logistics: reduction of transportation routes and effort
• Bottom-up implementation of all result improvement efforts including employee motivation and training
• Assurance of sustainability by implementation of a value-oriented organization

Project objectives exceeded

By detailed planning and stringency of implementation paired with a consequent bottom-up approach, the ambitious project objectives were even exceeded. Within the time period of two and a half years, a sustainable increase in profits by more than 65 million euros was attained, more than 20 million euros of which may be attributed to maintenance. Therefore, the EBIT doubled.

The starting point of the project was a significant decline of the supply capability for the aftermarket at a manufacturer of car batteries. Previously, the stock had been reduced in order to cut costs, which was also achieved. Unfortunately, the reduction of the stock range from eleven to eight weeks lead to a decline of the supply capability rate from 95 to 75 percent during the winter months.

The company had reduced their stock without considering planning and production processes. The stock range and structure became insufficient, whereas the balance between client requirements on one hand and the production and logistic systems on the other hand could not be kept.

Weaknesses identified quickly

Within the scope of a short but intense analysis, ConMoto identified six weaknesses of the production and logistics systems:

• Incorrect forecast controlled the operative system
• Product diversity at a very early value creation stage, resulting in a two-level distribution structure including a high variety complexity
• 100 percent push delivery of the storages due to incorrect forecasts
• Long lead times and lack of production flexibility lead to capacity shortages during peak periods
• Unrealistic promise of 100 percent next day delivery to all customers
• No integration of suppliers an no/incorrectly planned project figures

Five problem solving approaches

For problem solving, ConMoto uses best-in-class methods. The following five main levers were identified:

1. Delivery times according to customer requirements: Instant delivery for about one third priority customers, delivery times of up to five days including confirmation of delivery date at assignment, individual delivery times depending on availability for non-standards
2. Correcting statistical deviations by subsequent differentiation of product variations and exact planning of orders
3. Inventory management according to the pull principle including statistically verified reporting and safety stock; pre-production for peak periods
4. Production management according to the pull principle based on re-order levels including a trigger point directly before final assembly
5. Lead time reduction by optimization of production processes and inclusion of suppliers

Project results

• Increase of delivery speed by approx. 20 percent to 97 percent
• Reduction of inventory by 45 percent
• Decrease of lead time by more than 50 percent