Case Study 5
Detail of Major Contract

1. Original predicament

The company was suffering from the dual effects of life in a highly competitive market and ineffective management. To make matters worse the staff lacked essential skills and there was no plan to rectify this. The work place was disorganised and the records were inaccurate. Sales orders originating from its largest customer were suspect in content and the information was materially and continually altered by the customer in the run up to delivery. The supporting service equipment was below the capacity of the machinery and the manufacturing ability was constrained because of it. The shift patterns did not allow the most efficient use of capacity and scrap rates were high. There was no planned maintenance and machinery breakdowns caused missed delivery times and excessive overtime.

2. Suggested solutions

The product range needed be changed to allow goods to be sold in different markets to achieve better margins. Extra resource was to be recruited to develop new markets, new processes and new products. The production staff knowledge shortfall needed to be ascertained and proper training plans implemented to remedy the situation. A skilled trainer was to be recruited who also had to ability to improve production efficiency. The plant and equipment services needed to be surveyed to ascertain the correct capacity required to achieve better utilisation of machinery. The plant and equipment needed complete overhaul, a planned maintenance schedule needed to be issued and controls implemented to ensure it was followed. The whole of the production and storage areas were to be reorganised and improved to facilitate better workflows and ease inventory maintenance. A series of standards were to be issued into the production area for each item manufactured so that units could be measured against a norm. All production was to be monitored and recorded by quality of product.

3. Results

The additional technical sales resource was recruited to steer the organisation in the direction of more profitable products in new markets. A comprehensive programme of sales product development was discussed and agreed. New types of manufacture and assembly were proposed and agreed. This broadened the range and increased the chance of acquiring new business. Both the quality of production and the standards within the factory were raised substantially by setting a series of targets for each unit type manufactured. The workflows were streamlined within the production area. Systems were introduced on to the shopfloor to monitor and record production. Administrative systems were also implemented to ensure that critical data was rapidly fed to management. The production area was completely overhauled to present a better working environment and a new inventory recording system introduced in the warehouse. The capacity of the services was ascertained together with that of the production requirement from each machine and plans were prepared to rectify all shortfalls. These plans were approved, extra services installed and a significant upgrade in production capacity delivered. Additional training and production management skills were recruited to reinforce the drive for improved shopfloor skills and reduced scrap levels. Extra engineering capacity was recruited to supplement the need for planned maintenance and reduced machinery downtime. The impetus for change was driven to the heart of the organisation and reinforced by the decision to achieve British Standard accreditation. This was successfully completed and working practices were improved throughout the organisation. The whole exercise was a very great success.

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