Major delivery backlogs at the customer, the threat of line stoppage, no overview whatsoever of production and warehousing and a defective, non-meaningful ERP system.
All these points led to the deployment of a task force at an automotive supplier in autumn 2019, initiated by a large German OEM. As part of this task force, we quickly gained insight into which internal causes led to these problems. In addition to obvious underdeliveries, there were also numerous incorrect deliveries, as well as many a complaint due to incorrect or missing sub-components on the finished parts. The feedback on the customer complaints, as well as the clean data transfer and acknowledgement of the IT mandates, were also a frequent cause.
The lack of regulating processes as well as a non-maintained ERP system and a great deal of new, untrained employees intensified the pending disaster. However, in its function, the task force was allowed to have only an advisory influence on the supplier’s management. The ultimate decisions continued to be made by the management. We reported to our client (OEM) continuously about the current status, the developments, proposed measures and the effects. A few improvements were immediately adopted, such as the complete inventory, the new structure in the field warehouse according to the FIFO principle and a time-limited control function for the arrival of the finished parts in the storage area. However, other points, such as toughening up the SAP system, an access-controlled production plan and forward-looking purchasing activities or transparent customer communication were consistently ignored by the management. Owing to constantly growing costs due to special trips for parts deliveries, acquisition at short notice of raw materials and additional purchase parts that were not budgeted, as well as rising complaint costs, the company’s situation worsened and it had to register for insolvency at the start of 2020.
After the takeover by the insolvency administrator, we ended our mandate as part of the task force and we assumed interim management at the same location with new objectives. Based on the insights gained up to that point, a clear list of measures was presented directly to the insolvency administrator and the customers. The core task was to bring the company onto a stable path as quickly as possible, in a target and results-orientated manner.
The company produces one and two-component plastic parts for the automotive sector, some of which are finalised on the machine or in assembly with various additional purchase parts such as clamps, seals or clips. Since, as with so many other companies, the firm was built only on one business area, everything had to be done to supply the customers punctually again and, above all, in the right quality.
Due to the poor basic data available to us, the available periphery could not be used. Together with a highly competent partner company, shadow planning was set up in a very short but intensive time that was based on independently programmed databases and Excel files. This data was collected in the shortest of times with the entire staff by inventory of the stocks and storage sites of all the raw materials, additional purchase parts as well as semi-finished and finished parts. At the same time, cycle times on the machines were verified and assembly times were determined in order to create a sensible, access-controlled production and assembly plan. Based on this data, it was possible to plan the required resources for the machines as well as the assembly and warehouse employees. Once the necessary stability was achieved, the personnel were integrated into the new process landscape. Control processes were introduced, such as a daily shop floor meeting, rejects and complaint meetings and the daily PPG (Purchasing-Production Group). As part of the shop floor management, various clear-up activities took place.
Parts that could no longer be used were disposed of and floor markings and other visual features that are actually normally present were installed. Together with the colleagues on site, various optimisations and improvements in efficiency and process reliability were identified and implemented. Thanks to forward-looking planning, sufficient raw materials and additional purchase parts were acquired in order to work off the customer backlog with a full team during the time when everything around the company stood still due to coronavirus measures. The finally recovered, outsourced products and tools contribute positively to increasing the depth of value creation at the location. To receive the investors accordingly, a final housekeeping was carried out at the location, which is now running in a controlled manner. Our mandate is thus slowly coming to an end and we are now hoping for a quick takeover by an investor who will lead the site into a positive future.