Interim COO achieves significant improvements in electrical engineering production plant

SITUATION

The client is a subsidiary of an Austrian group with production in the Czech Republic with over 1.000 employees working in multiple shifts on site. There was a lack of transparency and trust in local management. The management of the parent company did not have a clear picture of the situation on site and was accordingly unsettled and dissatisfied. Corporate standards did not appear to be implemented. In the past few years, the Czech plant has always achieved an acceptable positive result every year, but for some time the financial ratios have deteriorated.

Country-specific culture and language obviously formed a barrier between the subsidiaries and the HQ. The position of COO in the Czech Republic had never been filled before and was previously held by the local CEO in personal union. The deployment of a consultant sent by the HQ for several months did not lead to any significant improvements

ACTION

There was need for implementation of an interim COO with departmental responsibility for production, supply chain management, purchasing, quality, lean management. Required qualification: several years of international experience in comparable positions in a production company as CEO or COO with English as the group language and Czech as mother tongue. As an interim management provider, P + P was able to present a suitable candidate to the client within 48 hours, and the interim manager started working on site within a few days.

ACTIVITIES

  • Implementation of generally applicable automotive standards and introduction of group standards on site
  • Introduction of lean management methods
  • Stabilizing and ensuring uninterrupted production despite massive COVID-related staff losses
  • After significant staff reductions in the course of the first virus wave, a few months later the workforce was increased again significantly due to increasing requests from the OEM’s
  • Practicing a “zero tolerance policy” towards employees in the event of violations of COVID preventive measures in order to prevent the risk of a production stop due to a large-scale outbreak of the virus and a plant closure by the health department
  • Development and implementation of an Andon system for immediate reaction to deviations in production output and/or quality. Monitoring, control and optimization of the respective performance and quality at the individual assembly workstations and machines/systems. Training of managers in the use and interpretation of the ‘cockpit’ available on the display/computer in assembly. Encouraging the responsible managers  to use the tool. The same applies to the visual Andon (three-color traffic light) on the machines.
  • Exchange of executives (“low performers”) in the case of insufficient active support of the change processes
  • Sparring partner and situation-dependent coach for CEO
  • Culture change in the company and behavioral change in local management from the 2nd level to the shift supervisors/masters and team leaders on the shop floor through active example and permanent correction and control
  • “Revitalization” of key employees, who threatened to slide into internal resignation, as their technical know-how and personal efforts for improvements were “stifled” by the organization (colleagues, employees, superiors)
  • Elimination of cultural resistance to change measures by explaining the meaningfulness and necessity as well as clarifying the benefits/advantages. Subsequently, consistent implementation and follow-up controls for compliance
  • Support with the SAP S/4 HANA introduction and input provider for the development of the MES system landscape
  • Cooperation and participation in negotiations with the works council and the union
  • Discrepancies in various reports are shown and the reports are correctly rebuilt together with those responsible
  • Realization of so-called “quick wins” in the departments assigned to the COO
  • Interface function (linguistic, technical, cultural) between the operational departments and the central departments in the HQ
  • Optimization of the production of series products through the introduction and structured expansion of teamwork, periodic shop floor meetings, visualization of key figures
  • Co-development of a tool for the daily control of capacity and personnel planning
  • Reorganization of the production with reduction of the assembly areas from 5 to 4 by amalgamation and dismantling of unsuitable executives, assignment of the workplace fitters from tool engineering to production and physical relocation of the quality controllers from the office to the shop floor.

RESULTS

Sustainable improvement of production KPI’s achieved during assembly improved by an average of more than 15% compared to the previous year, OEE increased to over 85% on average, quality indicator ‘internal ppm’ reduced by an average of 26% in the 2nd half year compared to the previous year and COPQ (cost of poor quality) target of 1.25% of sales.

  • Creation of optimism among executives, including the local CEO
  • Regular use/application of lean management tools
  • Follow rules and instructions more directly, improve internal discipline
  • Successfully fought against general indiscipline, disinterest and ignorance and won various executives to actively participate (change of the “mindset”)
  • Creation of transparency for the Executive Board in Austria, creation of a “basic” trust
  • Turnaround (“moving the tanker to change course”) initiated and consolidated as far as possible
  • Orderly handover and training of a successor

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the partner

Austria

Walter Pfaller

Czech Republic

Hannes Pfaller