Cornerstone

Category: Case study

  • 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.

  • 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built-up additional finished goods inventories in an effort to improve on-time performance but slow moving items went out of date and performance did not improve.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.

  • 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 Officer

    Actions 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.

  • 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 Finance

    Actions 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.

  • 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.

  • 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%.

  • Paper manufacturer achieves 15% rise in output

    A paper manufacturer wanted to improve customer delivery while reducing manufacturing costs to compete in a developing world market.

    CornerStone Approach

    CornerStone engaged cross-functional teams to address chronic manufacturing issues, improve quality and throughput, and cut costs. A refined maintenance system improved equipment up-time, eliminating bottlenecks and a reorganised MRP (materials resource planning) system improved workflow and productivity.

    Actions Taken

    • Addressed manufacturing problems with process re-engineering teams that included machine operators, quality personnel and engineering.
    • Designed and implemented a structured System for Managing throughout the plant.
    • Delineated requirements for the maintenance system and implemented the optimised system.
    • Organised MRP system requirements and directed the implementation.
    • Trained management and supervisory staff in the use of selected systems.

    Driver Goals

    • Improve delivery performance by 98% by year end.
    • Increase throughput by 15% by year end.
    • Reduce scrap levels by 12% by year end.

    Results

    • 97% delivery performance with additional improvements scheduled for implementation.
    • Improved throughput by 15% with an associated reduction in cost.
    • Increased machine up-time by more than 10%.
    • Trained more than 120 staff on the use of maintenance and MRP systems.
    • Reduced scrap by 15%.

  • Aerospace company delivers seven times more aircraft

    A start-up aerospace company focused on the design and manufacture of high performance and speciality purpose aircraft sought to improve on time delivery.

    CornerStone Approach

    CornerStone’s analytical professionals mapped the client’s entire workflow and manufacturing processes to identify key issues affecting its ability to complete and deliver aircraft on time. Issues addressed included: an inexperienced workforce; broken supply chain; and lack of business and shop floor processes. The team designed and implemented a plan to capture prioritised improvements as well as a structured management system to track and maintain performance.

    Actions Taken

    • Re-engineered the shop floor process and workflow to include work cells and kitting areas.
    • Developed and implemented a system for managing production.
    • Re-engineered the supply chain with the ability to identify and track long lead-team items.
    • Designed and implemented a shop floor performance reporting system with the ability to track individual performances and to identify and resolve barriers.
    • Developed and implemented a front-to-back Master Production Schedule.
    • Developed production standards and dynamic productivity takt (the average time taken to move onto production of the next unit) reporting time.

    Driver Goals

    • Increase monthly aircraft deliveries to two within nine months and three within 12 months.
    • Accelerate revenue streams through final delivery and progress payments.

    Results

    • Decreased engineering NMRs by 45%.
    • Reduced wing takt time by 30 days.
    • Produced a single Master Production Schedule.
    • Increased aircraft deliveries to seven from just one in the previous year.

  • Consumer products manufacturer cuts supply chain waste

    A consumer products manufacturer facing rising costs, particularly in promotional sales, sought to improve customer service, reduce inventory and develop and implement a process to manage its suppliers.

    CornerStone Approach

    CornerStone worked with the client’s leadership to define Driver Goals and implement a system for aligning the organisation’s activities with its high level targets. Teams mapped Promotional, Sales, Customer Service and other supply chain workflows to identify opportunities to improve key indicators and to shift towards a ‘make to order’ fulfilment process. Targeted improvement projects enabled the teams to achieve cost, lead time and inventory reductions. A structured operating system served to keep the client and its suppliers on track to maintain and grow gains.

    Actions Taken

    • Instituted a goal roll-out and translation process.
    • Developed and implemented a new ‘make to order’ process for Promotional Sales.
    • Designed and implemented a managing operating system for Promotional Sales.
    • Implemented a reward and recognition process.
    • Developed a barrier identification and removal process.
    • Co-ordinated changes in the Promotional Sales process between the client and its suppliers.

    Driver Goals

    • Improve Customer Service line item fill rates to 97%.
    • Reduce obsolete inventory to near zero.
    • Reduce order lead time from than 12 weeks to 9 weeks or less.
    • Reduce inventory turn time from than 35 days to 15 days.
    • Transition from a ‘make to forecast’ to a ‘make to order’ system.

    Results

    • Line item fill rate of 90%.
    • Reduced obsolete inventory to 3%.
    • Reduced order lead time to 4 weeks for standard products 8 weeks for non-standard products.
    • Reduced inventory turn time to 15 days.

  • Shake-up boosts cement maker sales

    A major cement producing company asked CornerStone to develop a new methodology to help it increase market share during a downturn.

    CornerStone Approach

    Following an assessment, CornerStone designed and implemented a new Sales Organisation structure defined by four integrated processes in order to achieve the client’s Driver Goals and future growth strategies.

    Actions Taken

    Target account acquisition

    • Developed and implemented an aggressive Target Sales Task Force process to acquire top ranking strategic accounts (a team selling approach to acquiring new business)
    • Developed questionnaires, a knowledge base repository, account qualification tools, meeting agendas, model presentation for prospects and other tools.
    • Created procedures to standardise the process for Sales organisation distribution.
    • Generated enthusiasm among the Sales team.

    Sales effectiveness

    • Developed and implemented an effective sales process focused on growing market share while maintaining the current customer base.
    • Developed a new Professional Selling Skills (PSS) methodology training programme and delivered it to the Sales organisation in the US and Canada.
    • Developed and documented Individual Target Account Selling and Maintain Accounts processes and tools.

    Sales system for managing (SFM)

    • Created a framework to standardise forecasting, budgeting, planning, reporting and managing.
    • Designed and implemented tools for forecasting, planning and account optimisation.
    • Chartered a CRM (Customer Relationship Management) team to fully integrate the SFM process in an interactive system.

    Driver Goals

    • Add 0.9% in North America by the end of 2010 (4% in the Mid Atlantic region), without reducing price relative to the competition.
    • Attain new customers with 200,000 tons of new business.
    • Develop a more efficient and effective structure and processes for the Sales organisation.

    Results

    • Exceeded volume and financial benefit targets by 12% for 2010 and passed 2011 goals four months ahead of schedule.
    • Developed a new Sales structure defined by four integrated processes aligned to the Driver Goals and future business growth strategies.
    • Developed and delivered over 3,500 hours of training and coaching for the US and Canada sales force.
    • Distributed detailed process manuals, tools and files to all Sales force personnel.
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