A leading petrochemical industry company faced deteriorating financial performance and needed help improving its productivity. Since the leadership hadn’t viewed manufacturing as strategically critical, the basics for operational excellence weren’t in place. To rapidly turn around operations, the company needed a roadmap to eliminate waste, increase asset utilization and achieve sustained cost savings.
Altair was asked to turn around the situation with the key goal of improving of the Industrial Asset Effectiveness (IAE).
Bain collaborated with company on gathering data and carrying out a comprehensive bottom-up diagnostic in the following five interrelated areas:
– bottleneck identification and management
– total cycle time reduction by manufacturing batches
– plant organizational structure
– function and responsibilities clarification for each employee category
– maintenance shifts coverage
– maintenance management online system
– output of the process in terms of quantity produced per time
– raw material’s return
– production process control
Three main productivity improvement sources were identified and potential estimated. For each area, Altair devised a detailed action plan:
– Daily production analysis: set daily production curve as a key production stability indicator, monitoring utilization rate closely
– Plant IAE matrix: expand the Industrial Asset effectiveness indicator further to include incident matrix
– Incident prioritization matrix: introduce detailed matrix for each incident code and incident prioritization mechanism by product and machine type
– Improvement project proposals: forecast inventory to cover incidents
– Incidents coverage matrix: Identify additional safety stock requirement by calculating level of coverage
– Evaluation of the potential savings from the use of the field workers available time in other activities.
– Assessment of the potential of improving occupancy of the maintenance external services.
– planning improvement through a better relationship with the sales department
– modeling the margin loss associated with the lack of an efficient process in the schedule of some product categories
The project had a positive impact on the facilities productivity and also improved the organization and processes. Following the implementation of the action plan, there have been visible increases in all production lines of the three industrial facilities, with an overall productivity improvement by 19%.
August 01, 2007
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