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Cost saving plan saves millions
An aviation services and ‘green’ aircraft business came to CornerStone to reduce its costs and cycle times and improve customer service after its processes and systems became overloaded following rapid growth.
CornerStone Approach
CornerStone analysed the business to determine the key drivers of costs and lengthy cycle times and developed an action plan to address issues. A focus team managed overall productivity improvement activities.
Actions Taken
- Implemented a system for engineering management to ensure the correct drawings were released on schedule, allowing operations to complete its work with minimal delay.
- Developed a new planning process, allowing for alignment with baseline engineering planning and removing the need for ad hoc on the floor production planning for each individual aircraft.
- Redesigned the kitting of materials process, eliminating non-valued direct labour activities by providing materials to the aircraft production team in required amounts and on time; also eliminated lost and damaged materials.
- Implemented a new production control process that aligns activities across production shops, insuring the right things are built when required.
- Designed and implemented an integrated master schedule that tied all work together, including planning, kitting and production. Implemented systems for workshop management and to support the integrated master schedule at executive level.
Driver Goals
- Increase production of ‘green’ aircraft by 25%.
- Reduce custom cockpit and cabin installation hours by 20%.
- Attain a 97% customer reliability schedule.
Results
- US$12 million (£7.97 million) in cost savings from reduced hours spent on each aircraft.
- Additional annual margins of US$3.5 million per aircraft.
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Baker improves on-time delivery
A large commercial bakery needed to improve its ability to deliver complete orders on time to its retail customers in order to avoid performance penalties and/or lost business. The client had built-up additional finished goods inventories in an effort to improve on-time performance but slow moving items went out of date and performance did not improve.
CornerStone Approach
Following a thorough assessment, CornerStone determined that the Scheduling team was not planning the correct stockkeeping units (SKUs) and volumes to meet customer demand. Additionally, customer requirements were not well understood. Management needed to gain better control of schedules and manufacturing execution. There was no easy solution. Success could only be achieved through rigorous application of basic fundamentals: understanding customer requirements; identifying order patterns and volumes; minimising schedule variance and, therefore, SKUs.
Actions Taken
CornerStone partnered with client teams to develop and install new processes and systems that were focused on the timely manufacture of the correct product through:
- Installing an MABD (Must Arrive By Date) audit to insure that goods met the criteria in customers’ SLAs (Service Level Agreements) and correcting 75% of the destination criteria to match SLAs.
- Issuing production schedules 48 hours in advance instead of seven days. This allowed for adjustments to the schedule while keeping the changes ‘invisible’ to Manufacturing and reducing the likelihood of incorrect sales circulating.
- Categorising and managing the inventory based on: Make to Stock, Make to Order or min/max.
- Implementing a daily review of the schedule status, this facilitated timely adjustment to maintain customer requirements.
Driver Goals
Improve on-time complete customer order delivery, while reducing finished goods inventory levels.
Results
- Reduced finished goods inventory levels by 35%.
- Achieved zero penalties for poor performance.
- Achieved 98% fill rate (up from mid 80s %).
- Achieved 95% on time delivery.
- Gained a better understanding of customer service needs and levels across the organisation.
- Improved inventory management.
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Paper company reduces unplanned engineering downtime by 60%
A world leader in papermaking was facing a significant amount of unplanned engineering downtime. This reduced the availability of all main assets, disrupted assets from realising their production targets, and ultimately caused significant delays and product waste.
CornerStone Approach
Cornerstone identified asset utilisation as the key driver to attack engineering maintenance. It then thoroughly analysed and mapped the client’s entire production workflow and engineering processes to pinpoint all key issues that negatively affected asset reliability. Subsequently, it analysed the maintenance routines and strategy, audited a number of maintenance shuts, involved all key personnel in the analysis of its findings and then developed a solution that focused on:
- Identifying “the right maintenance jobs” (and frequency)
- Developing a structured approach ‘to do the right jobs right, first time’.
CornerStone worked with us to capture cash quickly by implementing new processes which are ensuring sustainability of our improved cash position.Chief Financial OfficerActions Taken
- Developed a maintenance strategy and maintenance routines.
- Designed and installed a system for planning all maintenance works and managing them on the shop floor.
- Developed and installed the maintenance planning tools, controls points, KPI’s and reports to allow for transparency, visibility & accountability.
- Developed and installed continuous improvement and knowledge management system to ensure that key learnings after each maintenance shut would result in improved performance.
Driver Goals
- Maximise asset utilisation
- Reduce unplanned engineering downtime
- Increase works completion rate while maintaining strict safety and keeping the costs under control
Results
The unplanned engineering downtime has been slashed – and sustained – by almost 70% on the bigger assets, and by 10% to 15% on smaller assets.
- Works completion rate increased from 60% to 95% while maintaining safety levels.
- Maintenance routines and work completion on-time provided improved reliability, smoother start-ups and thus increased machine availability and reduced overall product waste.
- Improved knowledge management and staff morale.
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Lean office practices save super yacht manufacturer millions
A super yacht manufacturer required an overhaul of its finance and customer service processes in order to meet increased customer expectations.
Cornerstone Approach
A detailed analysis identified opportunities to improve performance by reducing non-value-adding work and more proactively managing process performance. Rapid and measurable financial results were realised by:
- Applying Lean Office Principles;
- Consolidating functional work groups where possible; and
- Implementing structured Lean Management Systems – process metrics, daily meetings, visual displays, etc – to focus work group performance and increase management effectiveness.
Lean was a very effective improvement process that constructively stretched everyone’s thinking to move us out of the comfort zone.Director of FinanceActions Taken
Cornerstone partnered with the client’s teams to:
- Define and implement new processes to increase organisational capacity and productivity
- Formally share site best practices across the organisation; and
- Consolidate functional work groups to improve flexibility through scale and standardisation.
Driver Goals
Reduce North American Finance and Customer Service costs by US$3 million (£2 million).
Results
- Identified US$3 million in cost reductions with US$2.7 million realised and a clear plan to achieve the remainder.
- Trained organisation to in Lean Office Principles and sustaining methodologies.
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Yacht re-fitter on track to double sales
Yacht re-fitter sought to increase market share in a growing market. Cornerstone was asked to assist in determining the cause of recent sales losses, define a new, optimised Sales and Marketing process, and achieve Sales goals.
CornerStone Approach
CornerStone conducted analysis of the client’s Sales and Marketing function, including understanding internal and external customer processes, defining opportunities for improvement, designing and implementing new procedures to maximise sales, and putting structures in place to support increased volume and ongoing growth.
Actions Taken
- Interviewed more than 310 dealers on customers’ views of the company, analysed and summarised findings, and developed a strategy for change.
- Developed and implemented a new Sales office structure that included territory and staffing models for optimal territory management and a System for Managing and continuously improving the offices.
- Developed roles and responsibilities for Sales professionals and a new sales calls procedure to new and existing dealers.
- Designed and implemented a training programme for Sales professionals.
- Developed tools for gathering dealer feedback and competitive intelligence.
- Created a closed loop feedback mechanism to respond to dealer issues.
Driver Goals
- Increase sales 15% above field plan.
- Double sales over next 5 years while maintaining profitability rates within +/- 3 points of long-range plan.
Results
- Increased sales over current year field plan by 15%; on target to double sales over the next five years.
- Created Sales management structure focused on selling as opposed to administrative tasks.
- Trained all Sales office personnel in new roles as well as the new process.
- Exceeded plan for the addition of new dealers to the network.
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Ice cream maker does more with less
One of North America’s leading ice cream manufacturers sought to create a more demand-driven and efficient operation in the face of rising competition. CornerStone was recruited to develop a reliable demand forecasting model, analyse the client’s product portfolio and pricing, and implement production, resource, inventory and planning systems.
CornerStone Approach
CornerStone analytical professionals conducted a Discovery and Design process that identified and detailed the key issues, the specific approach required to achieve the desired results and the projected benefits. Teams were assigned to prioritised projects and redesigned critical processes.
Actions Taken
- Developed and implemented an enhanced production planning inventory control process that supported more accurate demand forecasting.
- Developed and implemented a project rationalisation and prioritisation process focused on critical projects, including those related to the enterprise resource planning system, production planning, capacity optimisation and scheduling.
- Reengineered the equipment utilisation, maintenance, changeover/set-up, sanitation and scheduling processes.
- Developed labour efficiency models for direct and indirect labour.
- Redesigned the distribution model to optimise inventory positioning, movement efficiency and transportation channels.
- Conducted a SKU (stock-keeping unit) rationalisation determining profit contribution, consumer demand, pricing, channel and portfolio breadth and content.
Driver Goals
- Achieve 97% peak period (April-August) customer service levels.
- Reducing inventories by 12% by year end.
- Reduced landed costs by 2.5%.
Results
- Achieved customer service levels of 95% during the project and on track to reach 97% target by year end.
- Reduced inventories by 12% with an additional 10-15% targeted by year end.
- Reduced landed costs by 3%.