Regional leader in the production of concrete products.
The largest regional producer of reinforced concrete products, due to the steady decline in financial performance and profitability of production, decided to fundamentally revise its operating and production activities.
At the same time, top management realized that there were a number of factors that impede profit generation, but could not clearly formulate them, or the focus was on technological constraints caused by an outdated production base.
In addition, past unfavorable experience of cooperation with another consulting agency forced the company to raise the question of the feasibility of further activities.
As a result, it was decided to apply to TOCTEAM for developing recommendations that can optimize the operation of the enterprise and increase the efficiency of operations.
Following the results of the orientation meeting with the top management of the company and interviews with employees, we found that the company’s activities require both transformations in the main functional areas, such as production, supply, sales, accounting, quality and reliability of production lines and qualitative system changes, aimed at synchronizing and coordinating units.
We have identified three consecutive tasks:
- Analysis of the technological base of the enterprise;
- Development and implementation of the target operating model;
- Transformation of the management structure of the enterprise and staff training.
At the first stage, we analyzed the main processes from the receipt of the order to its shipment, as well as the technical base of the enterprise, in order to assess various scenarios for optimizing the production process. According to the obtained results, we identified a number of reasons leading to a decrease in the efficiency of the enterprise, including:
- The lack of systematic costing, methods for evaluating the profitability of contracts and cost accounting system;
- The lack of a unified system of production management, expressed in the absence of formal planning and control methods;
- An inefficient system of motivation of production employees, based on piecework wages and contributing to the manufacture of unclaimed products;
- A separation of functional units. In particular, lack of information from the sales department about the workload of production caused unrealizable deadlines for the shipment of finished products, which leads to loss of contracts and reputation;
- The absence of formal processes for inventory and updating of warehouse balances.
At the same time, we did not identify technological limitations that prevent the effective organization of the production process.
After completing the data analysis, we created an operating model, the main task of which was to ensure the efficiency of operations and the coherence of individual functional units with each other. At the same time, taking into account the latest trends in production management and relying on elements of the concept of Industry 4.0, we have prepared a technical solution that provides additional opportunities in the field of operational production planning and obtaining information about the current state of the production process, based on the introduction of specialized sensors and a unique analytical information platform.
After agreeing on the operating model and adopting a technical solution to improve production efficiency, we transformed the management structure, based on the developed regulations, and train personnel in new working methods.
Now the project is at the stage of completion. All elements of the target operating model were successfully implemented in the enterprise, which allowed, on the one hand, to increase the efficiency of operations at the functional unit level, and on the other, to make informed decisions at various management levels, based on rigorous analytical data and a reliable reporting system.
As a result, company introduced a number of technical solutions that comply with the information technology concept – “Industry 4.0”, particularly:
- A unique information platform that integrates the functionality of all departments of the enterprise;
- Visualization tools of the production process;
- Technical means of control.