Case Studies for E-Merge
A furniture factory; aligning management to the improvement effort
The factory leadership asked for growth funding. We used our improvement expertise to do a diagnostic and found huge opportunities for improvement. It also transpired that the factory is in financial difficulties, and that an improvement is necessary to turn it around. A turnaround plan was then developed, that focused on two areas:
A marketing and strategy plan to refocus the company.
A process or operational improvement, using Lean principles.
The strategic/marketing plan focused on adding more customers over time, to move the company away from the concentration in one big customer, a large furniture retailer. Other areas of the plan focused on clarifying management roles and responsibilities, ensuring operational measurements are in place and ensuring management improves employee satisfaction.
The improvement of processes was done over a four week period, improving the flow of the production line, removing waste and mapping the processes to aid production planning. Training was provided in daily and weekly production planning, visual management boards were implemented, and factory operational staff could work towards demand at a glance. Work areas and factory were cleaned up using 5S, with gains in employee satisfaction and increased space for better production layouts.
Production capability doubled. Resource utilisation improved, as production planning ensured “just in time” stock allocation. Quality improved as work got standardised.
Feedback from MD:
“Firstly, since E-Merge’s involvement we now utilize our factory space in totality, there is no waste of manufacturing space. Our labour is highly productive and we experienced 100% increase in our capacity. Quality of our products has increased as it is a high priority of our business. Our inventory turn around time has also improved with at least 7 working days. Thank you so much!!”
A Telecommunications provider of Wireless POS equipment to merchants: sometimes you do not fix the broken processes!
The product of this company enables merchants to make credit or debit card payments. We got involved to assist the company with improving its service delivery. Using our unique diagnostic tool, it soon became apparent that this company also suffered from cash flow problems. The problems were varied:
Customer data records inaccurate.
Revenue assurance in a shamble.
Processes not captured and followed.
Network data records not accurate.
The solution followed two routes:
- The debtors’ book showed alarming age analysis trends, and the first priority was to clear this, with a secondary aim of fixing customer records. Debt was collected and old debt written off. The company did not have the requisite resources or capability to make this happen; we therefore provided interim resources to ensure success. We provided the job specs and interview questions to enable the company to fill the gaps in their capability, in the mean time we cleared the debtor’s book and collected large sums of revenue. Credit management processes were captured along with a policy for future use.
- The process improvement also followed a unique approach, in that we did not waste any time to improve the existing processes. We focused on a new technology, and designed a Lean process from the ground up. The new product was then used to replace the old technology, as a first wave, and then to sell new services as a second wave. Network and customer data records now formed part of the new process steps, standardised work ensured quality and speed of delivery.
This company was about to be sold by its shareholder, as it needed additional funding every year. The improvements helped them to return to profitability over the six months needed to deliver the projects. A lot of training was done to ensure sustainability, starting with executive committee members, then management, ending with supervisors and staff. Employee engagement levels improved with customer satisfaction, ensuring long term success.
A PABX installer needed a turnaround; proving that it is never a process problem, but always a purpose problem!
The PABX (Private phone systems for business offices etc.) installer asked our help to improve the time taken to install systems. They were working on a target of 14 days, which was then hovering on 28 days, causing lots of problems with customer escalations and cash flow. Our diagnostic showed the problem very early: They were measuring for efficiency, rather than effectiveness. Efficiency measures focus on what the business do, effectiveness, measures what is important to the customer. All the internal sections had measurements to measure their portion of the installation process, all adding up to 14 days. But none of this focused on the customer’s required date. Now most business customers required a new system when they move premises at the end of the month, and asked for this long in advance. Technicians then work on the turnaround times, pitched up when the building is still in progress, or previous tenants did not move out yet! Month end escalations of missed installations resulted in extra staff being hired.
We changed the measurement immediately to meeting of customer’s required date. Work was then scheduled accordingly, with the operational mantra of completing today’s work today. Now, this was a difficult change, as the management was convinced that this change will move the already poor delivery times of 28 days to even worse levels. The results, however, was astounding, as they moved closer to a 100% of meeting the customer required date:
Installation times dropped to 9 days on average.
Customer satisfaction highest ever.
The people doing escalations were not needed anymore!
Employee satisfaction rose, as they started to work together to satisfy customers!