Production strategy

‏‍Differentiated application of production philosophies generate high customer satisfaction and a healthy bottom line

The production strategy clarifies which production philosophies should be used in production. Often, different philosophies can be applied to the same production, with beneficial results. One example is Make to Stock LEAN component manufacturing, and an agile philosophy in the assembly department, where customer-specific orders are assembled.

Differentiated application of production philosophies

The results:

  • A production set-up that gives a competitive advantage
  • Ability to react quickly, when required
  • High productivity where needed in the supply chain
  • Qualitative and quantitative ”make or buy” foundation for decision-making
  • Basis for optimising the production footprint

Companies experience that demands on their production infrastructure are changing, being differentiated, and perhaps even globalised. 4IMPROVE analyses and identifies the current production roles and requirements, and assists with designing and implementing new, competitive production strategies.

Typically, production involves different roles in different factories, and often the same factory – full-scale benchmarking, ramp-up, prototyping and laboratory production. In addition, many companies experience a change toward “high mix/low volume”. A classic challenge is represented by a reduction in delivery capacity, an increase in delivery times, and a decrease in the bottom line as the business grows in volume and complexity.

This is often because there is a tendency to treat all customers and product lines equally, both in terms of production, but also system. Significant improvements can certainly be achieved by differentiating the company’s production philosophies. This might be done by differentiating the customer order decoupling point, so production capacity becomes aligned with the customer’s needs and wishes.

Case | Grundfos | Increases productivity and postpones capex
Case | Hjertecentret | Data-driven, coordinated planning leads to historically low cancellation rate

OEE: Optimising machine utilisation

Increase capacity, postpone investments and save on expenses

Improving OEE is a competitive alternative to investing in new production equipment when there is a need for increased capacity. Optimising with OEE tools occurs through involving and training employees. In doing so, human competences are enhanced simultaneously with machine optimisation, and these changes become rooted in the organisation.

Machine stoppages mean lost output – OEE is the answer

The results:

  • Significant improvements in production equipments’ throughput
  • Correct fact-based measurements and the baselines
  •  Competence-development for employees
  • Visibility and the establishment of a culture of improvement, based on OEE measurements
  • Postponement of investments

OEE is a performance measurement that measures the effectiveness of production equipment, relative to its maximum capability. Lost time is divided into categories, as illustrated in the diagram below:

A project is usually split into these 4 phases:

  • Establishing the correct measurement and baseline
  • Employee involvement, e.g. through competence-building
  • Identifying potentials, e.g. via a Parato approach
  • Structured establishment of continuous improvements

4IMPROVE offers tools for simple, user-friendly data collection targeted towards the analysis phase.

Case | Elopak | Increased OEE achieved through focus and training

Increased productivity

Improved employee performance: ”work smarter, not harder”

Typically, 50% of employees’ working time is used on non-value-creating activities. Via a greater focus on non-value-creating activities, together with an analysis of the company’s flow, 4IMPROVE can help to increase the productivity of the company by 20-30%.

Create the possibility for improved employee performance

The results:

  • Increase in output by 20-30% by reducing non-value-creating activities
  • Improved coordination of people, machines and materials
  • Focused planning, and improved management and control on the shop floor
  • Anchoring methods, and focusing on continuous improvement of these methods
  • Increased competence and decision-making powers in the organisation

In an average company, employees are only productive for 50% of their working hours. This lack of productivity is primarily caused by lack of materials, waiting for colleagues, or waiting for a machine to be reprogrammed.

Empirical data from analysis of productivity:

Projects are usually separated into 4 phases:

  1. Analysis of how working hours are used
  2. Employee involvement, e.g. via upgrading competences
  3. Identification of potentials via, e.g. a Parato approach
  4. Structured set-up of continuous improvements
Case | JELD-WEN Northern Europe | Systematic improvements save millions
Case | Enemærke & Petersen | Assessing potential saves a million kroner
Case | HiFi Klubben | Pressure testing how the shops operate
Case | Enemærke & Petersen | Productivity project optimises building management and reduces time-wasting

Yield: Utilising materials

Materials are often the largest expense, and must be used optimally

Utilising materials is essential for the company’s ability to earn. Quality, machine commissioning, tools and nesting are amongst those factors that have direct influence on utilising materials most efficiently in production.

Create the possibility for improved employee performance

”Any processing is a systematic destruction of a good raw material”. A well-planned production operation transforms raw materials into finished products with minimal waste, and the fewest possible detours in the course of production.

The results:

  • Reduced costs in both raw materials and processing operations
  • Environmental awareness regarding use of the earth’s resources
  • Increased output from the company’s collective production capacity

4IMPROVE provides a structured overview of the sources of poor material utilisation, and provides efficient solutions.

Analytical approach: reviewing processes, stocks and waste containers as well as data on procurement usage and scrap, are good sources for fact-based knowledge of options and challenges.

Employee involvement, and demonstrations: in close cooperation with employees, sources of waste are identified, and the effort is prioritised according to importance. Quite often, recognition of wastage occurs in this process, and alters the fundamental thinking in production.

Holistic approach to quality development

Development with the focus on quality optimisation goes beyond realising quality goals

A holistic approach to quality development, with sustained focus on performance, will typically include product and process development, process preparation and operations, as well as management systems

It is essential to understand what “quality” means, before preparation begins. 4IMPROVE works within all current principles in quality management and leadership, but has equally extensive experience with material-optimisation based on yield/mass balance approach.

Quality development consists of both process and management-based efforts to ensure customer and business-oriented process performance

The results:

  • Uniform, stable processes to ensure customer needs are met
  • Trained employees
  • Improved product quality

Practical line of approach

4IMPROVE works on quality projects, and typically departs in the following:

  • Business-focused: quality assignments should be viewed holistically, and work in harmony with business, so neither customer satisfaction nor overall quality goals are compromised: “it has to be worth the effort”
  • Process-focused: product quality is the result of a series of sub-processes that must be undertaken in order to realise the product. To achieve good quality, these sub-processes must be managed
  • Practical approach: Quality management tools are characterised by their ease-of-use, so that the tools are applied practically, rather than being theoretical models. “It needs to work in reality”
  • Management and focused tools: Efforts and management elements  are prioritised in accordance with the Pareto approach. The tools are adapted to suit the challenge, before implementation and following-up.
Case | Lindab | Fewer errors and greater job satisfaction

Complexity Management

Create insight into the complexity of your product range, and identify unprofitable customers and products

Shifting market conditions, differentiated demands of products and services, and increased competition and globalisation are just a few of the factors that give rise to growing complexity in the supply chain. 4IMPROVE works with complexity to increase profitability, whether the aim is to reduce costs, maximise on complexity in the form of customised services/products, or pricing initiatives.

Increased profitability via targeted initiatives that focus on the complexity in the supply chain

The results:

  • Reducing complexity by maximising usage of standard components and services
  • Overview of profitability for product programmes, services and customers
  • Setting up factory-preferred services, which form the basis of differentiated SLAs
  • Phasing-out or re-design of non-profitable products/services
  • Reduced capital being tied up in stock
  • Scalability and configurability

The foundation for profitability is a good overview of customers, products and services, that clearly show when earnings are created and lost. The choice of improvement methods in any given case depends on the relationship between profitability and complexity in the individual service or product range. One example is a need for product simplification in the form of standardisation, consolidation of suppliers, or pricing, that takes complexity into account.

The company’s expenses level correlates directly with the complexity of the supply chain. Complexity Management is thus a direct way to a significant increase in earnings. 4IMPROVE is experienced within: simplification of management tasks/systems, re-design of product portfolios (module-based access), establishment of product configurators, intelligent clean-up of product programmes, etc.

Case | DOT | Clarity on expenses provided the basis for profitable growth

Meet our specialists

Production & Distribution

Ernst Kildegaard
Senior Management Consultant
+45 40 42 48 40
ek@4improve.dk

Ruben Sørensen
Management Consultant
+45 25 72 36 25
rs@4improve.dk

Jens Arvad Johansen
Senior Management Consultant
+45 40 42 45 50
jaj@4improve.dk

Thomas Brams
Senior Management Consultant
+45 22 63 68 22
tb@4improve.dk

Jørgen Nørmølle
Partner
+45 40 36 44 30
jn@4improve.dk

Mathias Juul Pedersen
Management Consultant
+45 21 82 68 21
mp@4improve.dk

John Johansen
Partner Emeritus
+45 51 20 41 97
jj@4improve.dk

Nis Kampp
Director
+45 22 10 08 22
nk@4improve.dk

Erik Gärtner
Senior Management Consultant
+45 28 45 10 18
eg@4improve.dk

Bo Dencker
Managing Partner
+45 40 75 39 99
bd@4improve.dk

Thomas Thiel
Senior Management Consultant
+45 23 43 29 50
tht@4improve.dk

Brian Vangsgaard
Senior Management Consultant
+45 20 60 75 88
bbv@4improve.dk

Svend Aage Hansen
Independent Contractor
+45 23 21 36 32
sah@4improve.dk

Mathias Juhl
Independent Contractor
+45 30 26 22 02
mtj@4improve.dk

Bo Wang
Independent Contractor
+45 51 51 76 68
bwa@4improve.dk