This organization is a make-to-order (MTO) business of approximately 100 employees and $10 million in revenue. They had had two successive years of loss and were still going in the wrong direction.
Solutions to Complexes:
Sheets of Paper Eliminated
% On Time Shipment
Hours of Human Effort
$ of Annual Savings
Leading Indicators of Complexes
A new hire going into final assembly takes 6 – 9 weeks to reach a good level of production.
Turnover in final assembly in the previous year was over 100%
Shortest time on job: Four hours including onboarding session of 1.5 hours…they went for lunch and didn’t come back.
Longest service person that resigned: 17 years
Sales bids on projects and the bids are time sensitive
A project bid worth over $200,000 missed the quote deadline
An ERP solution had been purchased several years before
Implementation was over triple the expected cost and late
Employees were using other tools to get around the system
Sales order entry was not using the configuration tool which was a central point for purchasing the solution.
Root Causes of Complexes
Contacting some of the former employees, we discovered that the boss (owner) tended to yell at people and continually change the production plans during the day (sometime within an hour of day shift start up). People don’t like chaos.
The sales bid process goes through several departments and is heavily reliant upon paper-based information and people-based prioritization. Engineering was a major bottleneck.
Found that some paper got ‘lost’, misfiled, ignored, etc.
Lots of ‘politics’ between the sales and engineering management and people within the departments
The ERP solution was highly customized…basically to make it work like the old system. Lack of knowledgeable project management and proper vendor controls. No investment was made in education for the selection team nor was organizational change management considered important.
Solutions to Complexes
The boss is not allowed on the shop floor. Turnover rate dropped to 17% and most of that was due to new personnel not being able to perform the job function adequately. The production manager is managing production and the master scheduler is able to provide accurate ship dates and input into the sales quotation cycle
Engineers were given new Personal Management Objectives based on prioritized throughput.
Eliminated the politics (terminated one engineer that didn’t change)
Engineering manager became ‘acceptance point’ for work coming into the department and produced a schedule of tasks for completion
Re-implementation of the ERP solution
Proper project controls (on time and on budget)
Investment in ERP conceptual education for all salaried and shop supervisory personnel.
Communication strategy launched to assist with organizational change management
This organization is now profitable, does not miss date deadlines on bid opportunities and utilizes the ERP solution as intended.
Average cost of producing a sales quote and resulting sales order has dropped by 24%.
Win / Loss analysis is now enhanced with reason codes being attached to each sales bid recorded.
For more information contact Emercomm via email: firstname.lastname@example.org