Creating a plan to keep the supply chain firing on all cylinders
This Fortune 200 leader in power solutions has a number of complementary business units around the world, grossing revenues in excess of $20bn.
As part of a strategy to build a more agile and competitive manufacturing footprint, the organization transferred their alternator production to Eastern Europe. While the new site became one of the most advanced facilities in the world, the significant investment in capacity and modernization did not yield the expected benefits.
A planned production increase revealed a number of supply chain and staffing issues which significantly constrained output, resulting in extended lead times and an inability to meet customer demand. The CPO asked Proxima to run an urgent Health Check to identify the causes of these issues.
We deployed a team of commercial and operational supply chain specialists to Eastern Europe where they undertook an initial three week health check. The Health Check focused on diagnosing the root causes of the failures and identifying potential solutions. The team worked very closely with Production and Logistics managers, reporting into the Supply Chain Director.
During the Health Check, our specialists visited key sites, conducted workshops with the leadership and operational management, and reviewed the scheduling, forecasting, communications flows, operating methods, and inventory holdings to build a baseline of activity.
We then carried out value stream mapping, demand planning, and reviewed KPIs for the incumbent suppliers. These findings enabled us to identify the points of failure, including: lack of warehouse strategy, non-optimal warehouse layout, limited system usage, undocumented processes, and no 3PL provider. Following this, we built an actionable recovery plan.
Outcomes and Deliverables
Proxima produced a comprehensive report with a prioritized pipeline of actionable initiatives resulting from the diagnostic phase, and a recovery plan for the capacity shortfall. This found significant scope for supply chain improvements, focused on improving service, increasing reliability, and reducing end-to-end costs.
We also created an implementation plan (phase 2) which enabled leadership to understand how to prioritize these short term initiatives.
- Rapid three week Health Check with detailed analysis and fault diagnosis
- Immediate remediation actions and recovery of capacity shortfall
- Assessment of wider operational and commercial efficiency
- Prioritized improvement plan and outline of more strategic future improvement ideas
After a review by senior leadership, Proxima was engaged to conduct phase two of the review: an intensive 12 week period of activity, working within the existing supply chain structure on actions to improve performance quickly and with minimal investment.