Context
SME specialized in packaging produces and sells worldwide with strategic importance across various sectors.
The processes are made up of: development of new products and revision of the current ones based on customer needs, purchasing of materials, transformation, finishing (for certain product families), packaging, and delivery to customers.
Problem
Following a steady decline in profitability, management deemed it necessary to involve specialists in operations, productivity, and innovation to recover the situation and shine again as in the past.
Excessive operating costs, financial immobilization, and continual delays led to a drastic reduction in revenue and EBIT.
Improvement actions
Management chose to perform a “CT scan” of all primary processes in order to set up a roadmap based on objective evidence from productivity metrics.
By applying the SIPOC-VSM methodology, the following were identified:
- Process characterization - the adopted methodology makes it possible to document the processes for turning a lead (potential customer) into an invoice. In addition to characterizing the overall functioning (KPIs, procedures, input and output, interfaces, risks, etc.), this methodology also allows all individual operations to be schematized for all primary processes (drafting offers, developing new items, purchasing methods, etc.);
- Revenue constraint - analyzing the flow at different moments throughout the year made it possible to identify the point that defines the speed of the system and therefore where to focus efforts to increase revenue and improve customer delivery service. The staff finally understood what the generated value depends on and was thus able to reshape the operational processes based on its weak point;
- Overall performance indicators - the characterization allows the effectiveness and efficiency of the entire company to be objectively quantified using a few, but meaningful, numbers. These numbers will be used to measure the improvement of the actions implemented;
- Lead time and variability - several orders delivered since the beginning were mapped in order to understand the limits within the flow and the average and median performances. This made it possible to prioritize focusing efforts on defining the improvement roadmap;
- Financial immobilization - analysis of static management control made it possible to take a snapshot of the company’s finances, uncovering how inventories match actual demand and the potential productivity losses that affect cash flow;
- Customer and family segmentation - demand analysis made it possible to classify customers and families by value and stability ranges, so as to concentrate sales efforts with a data-driven approach.
Results
Detailed mapping made it possible to extract 48 improvement opportunities classified by importance of economic and operational impact. The improvement proposals made it possible to design TO-BE processes and create a structured improvement roadmap structured and linear.