Clients by Review
In March 2016, Sonoco Products Company (NYSE: SON) engaged Productivity Step Change to conduct an analysis of several of our Tube & Core operations based in North America.
Prior to the engagement, I felt we had already committed to a crowded schedule of excellent internal initiatives in 2016. However, I was also intrigued by the approach you presented, and saw your analysis was aligned with our own agenda to lift the utilization of key operating assets. So, I agreed to proceed.
The outcomes were surprising. Your team identified that we were operating with lower effective utilization of capacity than we had imagined and that the opportunity to lift utilization called for change in functions well beyond the production plant per se.
You demonstrated that weaknesses in our Sales & Operations Planning (S&OP) process had resulted in holding excess productive capacity. This overcapacity caused problems ranging from underpricing, margin sacrifice and erosion of operating standards. There was a lack of definition and control concerning minimum order quantities and delivery lead times. In short, holding excess capacity had led us to a wider erosion of standards and performance.
Together we executed an 18 week focused program and the results have been outstanding. Within the time period, we have identified over one million dollars of financial benefits and can confidently move to rationalize our product portfolio, asset holdings and plant layout during 2017. We will also see an immediate lift in our direct labor productivity.
I want to thank you for your professionalism and the work of your team during 2016.
“The global economic recession at the end of 2008 only highlighted the need for the Thoresen Group to be a more commercially-minded organization. In particular, demand for our dry bulk shipping services fell dramatically, as world trade declined. We simply did not have the tools and disciplines required at all levels to consistently utilize our capacity most effectively.
Now that the Management Control System (MCS) implementation project has been completed, I wish to formally thank you for the successful work completed at the end of July, which was done with the dry bulk shipping business. The dry bulk shipping business is better equipped with a well thought out and communicated set of tools, which should enable managers to plan and schedule vessel capacity utilization more accurately and to better control its use of resources of all types across the whole operation.
In addition to the positive work done at the front end, forecasting and planning, significant work was also accomplished at the hands-on, on board level. Your consultants concentrated on designing and implementing control tools for on-board use and trained six vessel crews before the project ended.
Through the development and implementation of the MCS, Thoresen’s dry bulk shipping business has improved its capacity utilization, reduced fuel consumption and increased effectiveness in repairs and maintenance expenditures.”M. L. Chandchutha
“Early last year, I felt that we had a good handle on the improvement opportunities available to the business and that we had an aggressive plan to realize those opportunities. For this reason, I was somewhat skeptical during our first conversations. When we eventually agreed to a review to assess potential opportunities, I did not expect that you would find much that we had not already identified and planned to address. Review findings told a different story.
Results are significant. In our flagship bakery, overall equipment effectiveness was increased by more than 20% over our baseline measure. We increased capacity to such an extent that we closed two bakeries in the same region and shifted their production volumes to the flagship site. Similar levels of improvement are available in other locations where we are just completing implementations. The tools, disciplines and metrics which we now have in place across all locations will continue to guide us through an ongoing program of significant improvement.
Your team has been unrelenting in their focus and drive throughout the months of the projects we have undertaken. They have been sincere, capable and absolutely dedicated to working with us to achieve substantial sustained results. They have led by example.”Gordon Hardie
“I wanted to write to you and record my satisfaction regarding the outcomes of the several projects your company has delivered in conjunction with our managers in a number of Divisions of the Mayne Group over the past two years.
Specifically and most recently I was pleased to see that the program in Mayne Pharmacy Distribution has been highly successful in reducing inventory-based working capital by around $40 million while actually improving overall service levels to our customers. This amounts to a near 20% reduction in the capital invested in inventory and this important project was completed on time and within projected cost.
Further, the work of your teams in facilitating improved capacity, productivity and the reduction of work in progress at our manufacturing facilities in Melbourne (Mayne Pharma) and Brisbane (Mayne Consumer) has been outstanding. I believe your overall approach which focuses on management systems design and management planning and review disciplines is very effective and the standard of your consultants is generally very high.
I would not hesitate to recommend your services to other businesses or to further utilize your services should the need arise. Thank you for your valuable contribution to our businesses.”Stuart James
“The Castalloy Plant in North Plympton, South Australia is one of a number of companies that was under the operation of Ion Automotive. McGrath Nicol and Partners were appointed as the administrators of Ion Automotive late in 2004. We recognized early on that the Castalloy operation, which manufactures wheels and hubs for Harley Davidson in the United States and single and double overhead cams, oil pans and thermostats for GMH, required an operational fix and in an extremely limited time frame.
Recognizing the situation we were faced with, and the speed in which improvements had to be identified, realized and sustained, you were engaged to initially conduct a review of the operation and outline an approach to assist in the fix and delivery of these outcomes within a three to four month time frame.
Castalloy now has systems that ensure that everyone is involved and everyone is accountable for measuring and managing the day-to-day operation of the business. Together we have implemented a management and culture change and we now have more capable leaders that measure and manage productivity. Most importantly, we have a sustainable approach for the business to go forward. The magnitude of the results achieved by all, and delivered within an extremely brief time frame, has enabled a rigid go forward plan for the business. All the performance indicators are showing improvement. Some represent the best the company has achieved in recent times.”Michael Tamasi
“The Operation Division has been undertaking an intensive review of its business activities over the last 12 months to ensure that the best practice business outcomes are achieved in a deregulating grain industry environment. This letter details progress to date and the achievements of the review which have been undertaken with you.
To date the programs have delivered savings of over $9.5 million per annum and places the company immediately in a more competitive status with the grain industry. The industry stakeholders are demanding more accountability and this review has certainly delivered such.
The Operations review has seen projects undertaken at the Company’s four grain terminals, including the metro Grain Centre and its head office based departments. The purpose has been to review the existing operations and introduce new systems and processes to reflect improved work place efficiencies. The future is about better planning work, better scheduling work, better measurement of work and taking the corrective action to achieve the desired results.
Together with you, our management team has worked through several core parts of the business and one surprising outcome has been the development of our management team during the process which was not anticipated. This is one effect which is most valuable; we now have a better focused management team which is more experienced.
Another result has been the development of a logistics modeling tool which has improved logistics planning and introduced a far more disciplined approach. However, the most significant outcome has been the business improvement which reflects cost savings and improved productivity.”Colin Tutt
“After careful consideration it was agreed to engage your company to conduct a review of our mining operation in Stawell. The purpose of this review was to identify improvement opportunities to enhance the mine’s capability to increase ore mined and treated. Upon the completion of the review and the potential presented to us it was agreed to engage your company to conduct a project spanning 24 calendar weeks (130 man-weeks) to review and redefine the procedures and processes within the mining, milling and engineering disciplines.
The project has enabled a total refocus of our management systems which provided our people with clear responsibilities and accountabilities. This resulted in a 13% increase in ore mined and a 20% increase in ore treated. During the project it became very obvious to us that the ability and knowledge of your consultants enabled them to integrate with the people which assisted with the speed in which the results were achieved. The tools that we have derived from this project enabled us to make a significant change to the operating culture.
Due to this impact another project, for a further 12 calendar weeks (30 man-weeks), focusing on establishing operational standards and the restructure of mining, milling and maintenance, was commissioned. This has seen a significant reduction in hours used whilst maintaining ore mined and treated levels. We accept that now we have all the tools and systems in place it is our responsibility to capitalize on the excellent opportunity that has been created going forward.”Kevin Wilson
“Overall I would say that there almost seemed to be a little bit of magic in the systems that were introduced. That is, whilst the improvement in results (an almost doubling of efficiency in some areas) exceeded our expectations, it also seemed a little disproportionate to the interventions made and the changes implemented.
Perhaps this is because we under-estimate the true worth of the basic tasks of management – measuring the things that count, following up on those results and then taking corrective action – and doing this every hour, every day, every week.
We now have systems that propagate this basic process right up through the organization, so that everyone is involved and everyone is accountable. We have more capable leaders that don’t find it old fashioned to measure and manage productivity. But most importantly, we have a sustainable approach because the critical elements of the process are an intrinsic part of what we now do.”Russell Scott
“I would like to thank you and your dedicated team for helping create the beginning of a business transformation in our supplier relationship project. We set ourselves a target of reducing our household claims costs by $1.2 million per annum and to put in place a foundation for the future.
This has been achieved, and more. We have questioned our existing relationships with service providers and developed our own database to track all purchases. This allows us to identify the category and types of spend.
We are putting into place relationships with suppliers that meet the demands of the nature of the goods and services supplied for each category of goods. This gives us a combination of the best price and service for our claimants. It also introduces new processes and methods to ensure our competitive advantage.
Your focus on practical implementation has brought about necessary behavioral changes to our company as well as transferring knowledge to our people. Our business, like many others in Australia, is being challenged to run leaner with higher service levels. We chose to work with you due to the back-to-basics approach you offer versus the theoretical solutions of other firms.”Ian Norris
“As you are aware in October 2002, after carefully reference checking your firm’s performance with a number of companies, MaxiTRANS decided to engage you to undertake a review of our manufacturing facility in Ballarat. The purpose of this review was to identify process improvement opportunities and increase production capacity utilizing the existing resources. In addition to this, we were keen to ensure that we extracted the full benefits of our recent capital upgrade expenditure.
The 26-week implementation program was completed on time and on budget, with the targeted savings and benefits being achieved.
Accordingly I would like to take this opportunity on behalf of the company to thank you and your staff for completing this assignment in such a professional manner. I was very impressed with the way your team worked with our management and shop floor employees to ensure that the improvements were introduced in such a way that they were sustainable and that our employees took ownership of them.
The formal weekly progress review meetings were also a good idea and effectively removed any roadblocks before they became an issue.
From our point of view your company has enabled MaxiTRANS to achieve significant improvements in profitability and production levels.
As a result of this success outcome we were keen to undertake a similar process review at our Panels manufacturing facility at Hallam, which was successfully completed in June 2003.”Michael A. Brockhoff
“The project spanned almost all areas of Financial Shared Services, covering Financial Accounting, Statutory Reporting and Performance Reporting. Your people brought a level of analysis and detail to both understand and control this complicated environment.
The improved systems and procedures have ensured that the communication and management process has improved dramatically.
Before we installed our new Finance Productivity Management System we had difficulty managing our delivery performance and our resource requirements in relation to our key deliverable. We had a focus on technical competencies and a lack of proactive management
of the resource allocation.
As a result of the systems installation and behavioral change program there has been a
dramatic change in management behavior and focus. The people out on the floor are actively working on solving their problems, know what these problems are costing and are constantly improving performance.
Overall, I am very pleased with the results of the project. Your people worked well with our organisation, understood our culture and delivered real results.”
“Alcoa Australia engaged your company to assist with our worldwide initiative, ‘Cost Challenge’, to drive down costs by $1 billion globally. We at Alcoa also recognize that we are very good at planning but not so at execution.
Your company commenced with a business review, and as a result of the review, Alcoa engaged you to assist us in the realization, and more importantly, the execution of the opportunities that were identified during the review phase.
The objectives of this phase, which had a 22-calendar week duration, was to:
(1) Standardize work Management processes
(2) Standardize Management review and reporting
(3) Centralize roles
(4) Rationalize resources
The project focused on three service areas of our business namely Technical, Chemical and Engineering.
I am extremely impressed in the way you go about business and your degree of commitment and dedication of your staff in delivering the agreed outcomes.”
“I want to let you know how pleased I am with the results of the project to date.
In July this year your team presented a proposal to improve productivity in our workshops by at least 15%. After 16 weeks of development and implementation at our Welshpool and Wacol workshops we have achieved productivity improvements of 25% over last year’s base and this was achieved on lower overall workloads.
We now have a system that allows us to match our resources with the workload demands and a system that integrates the functions of shop floor, project management and engineering.
The training provided to our employees in the new system has been invaluable in providing the confidence to accept the changes.
Specifically, we have seen a significant reduction in overtime and contractor hours worked and in indirect unproductive time expended.
As a result of these improvements the bottom line has improved significantly and the additional cashflow generated will give a payback for the project of approximately 9-12 months.
I would like to commend you on the selection of your team to assist us in the project. They have been unwavering in their focus, drive and dedication to the task and their positive energy has provided intangible benefits for some of our senior management.”
“This assignment was clearly challenging in a number of aspects but your team made good on your commitments and helped us move further, faster than we could have done by ourselves. Your focus on the operational rather than the theoretical was one of the reasons you were awarded this assignment and on this score you truly delivered.
The project has undoubtedly contributed to our bottom line and the sustained productivity gains had added real impetus to the turnaround of our financial performance.
Finally, any consulting assignment ultimately relies upon the efforts of the individuals working on the project. Your team excelled.”
“I would like to confirm my appreciation of the achievements recorded for the Laverton plant project.
The objective of this project was to inculcate a fundamental change in the plant culture. Required outcomes included:
(1) Effective planning processes in the maintenance and operational areas.
(2) Improved understanding and consistent application of procedures by maintenance and operational personnel.
(3) Measurement of outcomes.
(4) Visibility of outcomes.
The project achieved its objectives, implementing an efficient and effective planning process along with performance measures which cascade from the business plan. Measurement of outcomes is greatly improved and it is now much easier to track performance and identify improvements in a range of plant parameters. All of this contributes to the cultural change required for ongoing prosperity in our business.
The investment has been justified, providing a pay‑back within the six-month duration of the project.
The recent extension of the project to cover the supply chain process and the technical/engineering support function confirms our confidence in the services provided by your company.”Murray Winstanley