After acquisition of a competitor operations were physically moved and merged. Project aimed at realising potential synergies.
Background
The company, a major player in maintenance for railroad operators, has repair shops located throughout Sweden. After the purchase of a competitor, it merged operations and physically moved into the largest shop. It then contacted Mantec for help in increasing profitability and taking advantage of all possible synergies.
Mantec performed an initial analysis, which identified three key problem areas where improving performance would significantly impact the bottom line:
- cultural, organisational and managerial problems had arisen after the acquisition and merger of the companies;
- communication to the organisation regarding objectives and goals was poor;
- consistent cost control was lacking.
These shortcomings created an environment where subjective opinions, often groundless, governed over objective facts.
Implementation
With the assistance of Mantec, the company drew up a project designed to tackle the shortcomings in both the management process and the manufacturing and planning process.
Management process
A new management information system would not only give an overall view on the present situation and make cost and project control possible, but also reduce communication problems because the organisational structure of the company would become clearer. Key measures for this part of the project were:
- the structure of the organisation was made clearer and more distinct. Responsibilities and authorities were revised in order to gain improved steering and control capabilities;
- Key Performance Indicators were identified to control critical cost drivers;
- enhanced system support was put in place, which made frequent follow-up and deviation control possible;
- special follow-up meetings were introduced between managers and staff on a daily basis, between managers and unit managers twice a week and between unit managers and the managing director once a week; and
- personal training and coaching of managers in their daily routines including follow up meetings was conducted.
The effect of these measures was to encourage a change in behaviour, which had to be accomplished in order to focus on correcting deviances from plan.
The Manufacturing and Planning process
Since operators on the shop floor are the core of the company, a thorough analysis of the manufacturing and planning process was imperative if improvements were to be made. Key measures for this part of the project were:
- clarifying the output of requirement specifications;
- defining quantities needed based on planned production;
- establishing clear and distinct interfaces between areas and processes; and
- problem solving and taking advantage of improvements in planning and preparation areas.
Results
The main results of the project implementation were:
- a clear, distinct organisational structure with a logical chain of command was successfully created;
- a system of continuous and frequent follow up of operations was installed, making it possible to take timely corrective actions; and
- visions of routines, long and short- term goals were unified across the company.
The combined effect of these three improvements has been to increase productivity by 15%.
