Miba implements successful optimisation project with Wassermann

More than a third lower material stocks in production and 20% lower process costs for order processing - that is the result of an optimisation project that Miba carried out jointly with consulting company Wassermann AG at the Laakirchen production location.

Miba is an international corporate group that produces technologically demanding and heavy-duty drive components. Miba's products are bush bearings, sinter moulded parts, friction linings and coatings that are used in planes, trains, ships cars and power plants. At 12 locations around the world around 2,900 employees work and generate annual revenue of most recently €312 million.

Miba plays a role in international markets that are characterized by intensive competition and constant structural change. The customers are well-known manufacturers of engines and vehicles and they have the highest possible demands for product quality and on-time delivery. In order to strengthen competitiveness and secure profitability, Miba needs value-added processes that can be planned securely and are cost-optimised.
During the optimisation project at the Laakirchen location, a varied project team systematically collected all of the potential improvements along the whole value creation chain. Miba brought a professional partner into the boat for this. Wassermann AG stood out as a result of its homogeneous consulting approach that combines operational excellent, management consulting and IT consulting and thus creates solutions from a single mould.

The whole value creation chain in view

The challenge was active production planning and control at the location. In addition to the actual business management ERP application this required a variety of additional information in the Excel spreadsheet software.
In addition, the company also used a weekly planning grid that no longer met the requirements for flexible production. Another challenge was the large number of interfaces in the downstream organisation. The workflows for capacity utilisation also no longer met the requirements for cost-optimal and secure on-time production.

It was essential to work through the paradigms of the planning logic so that the planning could keep up with the quickly changing business environment. The aim was to accelerate the throughput times, optimise capital tie-up in inventories and to raise the productivity of the whole downstream organisation. They also wanted to strengthen planning security and on-time delivery.

The operational excellence method

Together with the experts from all of the affected corporate departments, the consultants from Wassermann used the homogeneous approach of operational excellence to set a new basis for the company's production processes. The focus of this approach was the complete value creation chain itself. The product structure, organisation, processes and IT systems were designed such that the value creation chain could work as well as possible.

Inventory reduction as the first step

As a result of the challenging economic development in 2009, the initial aim was to reduce the stocks of preliminary, semi-finished and finished products and therefore the capital used in the production process. Noticeably lower process costs are also the be achieved in the accompanying order process. There were also plans to improve on-time supplier delivery to maintain the company's market position. Finally the aim was to network the primary production supply chain closely with the sales and procurement activities and to thus increase the service quality.

Problem analysis workshop

At the start of the project there was a workshop to analyse the value creation process. As part of this analysis of the current situation, the team also checked improvement measures that were already collected in a current analysis within Miba. During the joint work with Wassermann consultants it became clear quickly that these were mostly symptoms arising from seven deeper causes.

Integrated system approach

As a result of the analysis the project team established a system approach for global operational excellence: The supply chain organisation, lean production elements and the use of SAP were integrated into a homogeneous concept. The project team used this to define objectives, guidelines and the associated methods.

Two key project points were the redesign of the order process in SAP - in particular the production planning and control - and introducing a supply chain management organisation. This included the planning scheme with the relevant workflows and the associated modification of the master data and customizing the SAP application. At the same time it was necessary to create the relevant requirements in the operating organisation and to support the transition with change management measures. The planning processes for supplying spare parts were also redesigned using SAP and thus integrated into the production processes in the desired way.

Without massive preliminary work effective inventory monitoring was introduced as an initial, immediate measure. This quickly resulted in lower inventories with the relevant, economic advantages - achieving the initial "quick wins".

In a further step the company involved its external logistics service provider in order to optimise the IT integration. This resulted in improving the interfaces and an appropriate modification to the processes used.

Targets achieved and exceeded

After the initial analysis, the project team established ambitious objectives: 35% lower inventories in production and 20% lower process costs in order processing. In April 2010 these savings objectives were met and it was even possibly to slightly exceed the goal for reducing inventories. This delighted the project manager at Wassermann AG because "we are measured by the objectives we set and our consulting fee depends on the success demonstrated."

Matthias Gattinger, Supply Chain Manager at Miba explains: "We now control the whole value creation chain with our new supply chain organisation. We have increased on-time delivery and thus make an important contribution to our customers' satisfaction."