Taking over operational responsibility for the supply chain as part of an interim vacancy for a leading company in gearbox manufacturing for the commercial vehicle industry
as Interim Supply Chain Manager
Information about the Client / Employer
Company Type:
International Mid-sized Company
Industry:
Gearbox Manufacturing / Mechanical Engineering for Commercial Vehicle Industry
Size:
- Revenue: approx. 130 Million Euro in the affected plant
- Number of Employees: 530
Situation at the Client:
- Supply Chain Manager suddenly left the company
- High rate of missing parts in production
- High downtime due to missing parts on production lines
- Unclear cause for production stoppages due to missing parts
Information about the Mandate
FRAMEWORK PARAMETERS
Role:
Interim Supply Chain Manager
Period (Duration):
02/2023 to 08/2023 (6 months)
Area of Responsibility:
- Operational responsibility for 175 employees within the Supply Chain
- Budget responsibility of 5 Million Euro
- Responsibility for internal logistics, missing parts management, operational purchasing, inbound and outbound logistics
- Responsibility for raw material and finished goods inventory
- Responsibility for outbound to customer; delivery date adherence
- Customer escalation for major clients
Assignment
Main Task:
- Analysis and corrective measures for significant production stoppages caused by missing parts
- Ensuring smooth supply of assembly value streams
Sub-assignments:
- Analysis and identification of causes for production stoppages due to missing parts
- Analysis and elimination of inventory shortages / ensuring reliable material disposition
- Ensuring on-time delivery to customers
- Realignment and stabilization of the Kanban system for in-house manufactured components
- Realignment and stabilization of C-parts Kanban with external service provider
- Restructuring of fragile and error-prone picking processes into value streams
- Implementation of solutions for undefined material movements with frequent search operations
- Elimination of planned orders without customer reference that lead to high inventories without demand
- Analysis of production capacity limits and appropriate communication to customers
- Elimination of costs for special transports (road and air) due to production backlogs caused by missing parts
- Restructuring of production control by implementing reliable capacity planning instead of gut feeling
Measures
- Development of a detailed, digital key performance indicator system for recording logistical disruptions (Pareto)
- Quantification and qualification of logistical disruptions in terms of frequency, duration, and cause
- Visual, digital, graphical representation of disruption parameters
- Implementation of permanent inventory for critical components
- Analysis and elimination of causes for constant inventory discrepancies
- Implementation of a secured Kanban supply JIT for production with in-house manufactured components
- Reorganization of cooperation with C-parts suppliers to ensure JIT supply
- Ensuring complete picking into value streams through digital and personalized processes
- Cleaning up planned orders without customer reference to reduce inventory levels
- Analysis and alignment of own capacity limits; communication of capacity limits to (OEM) customers and their demands Revision of delivery schedules with the customer
- Analysis of costs for special transports
- Stabilization of assembly capacity by focusing on weak points in individual value streams
- Identification of limiting machines and equipment, introduction of an 18-shift model for limiting machines and equipment, establishment of external, extended workbenches
Achievements
- Reduction of the number of downtimes in value streams due to missing parts by 51%
- Reduction of the duration of downtimes in value streams due to missing parts by 60%
- Reduction of special freight costs by 43k per month or 42% per month
- Reduction of WIP in relation to finished goods by 82%
- Reduction of inventory levels for raw materials, WIP, and finished goods by 1.45 million euros
- 60% reduction in rework in final assembly
- 28% increase in output in final assembly
Special Challenges
- No recording of reliable key figures regarding production downtimes due to missing parts
- No recording of causes for production downtimes due to missing parts
- There is no capacity planning or the own production capacity is unknown
- Mentality of: Decisions based on gut feeling > missing KPIs
- Top management prefers increasing inventory levels instead of addressing the root cause of problems
- We’ve always done it this way – Management decides based on gut feeling and not on facts
- High employee turnover in critical areas
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