PPC Insulators
One of the biggest projects carried out by Management Systems is in CERAM ČAB, a.s. and its mother organization CERAM Group, Frauenthal Keramik AG, Wien and trade organization CERAM Handels GmbH Wien. Since 2001 the former insulator division Frauenthal Keramik AG is a part of PPC Insulators group, which was established by joining with Porcelain Products Company, Inc. (USA).
Characteristics:
CERAM ČAB is specialized in manufacturing and sale of porcelain insulators. Manufacturers of high-voltage electrical devices, operators of transmission and distribution networks and railroads belong among its major customers. PPC Insulators is currently the largest manufacturer of electrical insulators in Europe and second largest in the world.
Task:
Manufacturing of electrical insulators is characteristic with surplus of manufacturing capacity, customer concentration, fact that supply exceeds demand, very high level of competitiveness and introduction of products from new materials.
Strategy of PPC group is based on continuous improvement of all business processes (Operational Excellence). Emphasis is laid on productivity improvement, effective cost control, defect rate and working capital decrease and throughput increase.
Management Systems designed and undertook program of productivity improvement with emphasis on the abovementioned measures. Program name F1 emphasizes speed as one of the decisive advantages against competition. Project F1 started in fall 1997.
Spoločnosť Management Systems navrhla a realizovala celopodnikový program zvyšovania výkonnosti s dôrazom na horeuvedené sledované ukazovatele. Názov programu F1 zdôrazňuje rýchlosť ako jednu z rozhodujúcich zbraní boja s konkurenciou. Projekt F1 sa začal realizovať na jeseň roku 1997.
Method:
Together with management we used the method of independent evaluation to asses the performance of business processes. As a next step we carried out intensive training of middle and executive levels of management. Training was oriented for use of modern problems solving and process improving tools and methods. Afterwards the reengineering of key processes was carried out. The goals were to increase efficiency and prepare these processes for implementation of new information system. Our team cooperated with plant management to define requirements for this new system and helped to choose the winner of the tender for the system supply. Project of strategy formulation and creation of the new measurement system was carried out with use of Balanced Scorecard and Policy/Objective Matrix.
Significant improvements in decisive performance measures made the CERAM ČAB, a.s. the best plant in the group. Consequently the Frauenthal Keramik AG management decided to invite Management Systems to cooperation in areas of strategy formulation, creation of measurement system and efficiency increase in other plants as well. We lead the projects of formulation of CERAM Group restructuring strategy in 2000. Afterwards the project of sales strategy formulation for CERAM Handels was carried out. In 2001 we lead the project of strategy definition for new company PPC Insulators in Atlanta.
Results/Recommendations:
CERAM ČAB, a.s. management focused on following main measures. The goals for 1998-1999 are listed in the middle column. The achieved goals at the end of 1999 are listed in the rightmost column.
Project | Goal | Achieved Results |
---|---|---|
OTD | increase to more than 95% | 98.2% |
Manufactured volume | 15% increase | 35% increase |
Defect rate | max. 14% | 10% |
Lead times | 7 weeks | 4.2 weeks |
Working capital | 25-30% decrease | 56,6% decrease |
The abovementioned are the most important measures. Except those the project had numerous indirect gains: change of attitude and employees's motivation increase, change of management style at both executive and middle levels, increased quality of information used by management, overall plant appearance and more.
Further cooperation:
Currently the cooperation of PPC Insulators and Management Systems is still running. Management of the new group decided to use Six Sigma for business process improvement and efficiency increase in all manufacturing plants. Pilot project is carried out in CERAM ČAB since 2001. Management Systems as a local partner of Air Academy Associates, Inc., one of leading Six Sigma providers, is taking part in project solving. Two of our consultants are currently working as Six Sigma Experts (Black Belts) in CERAM ČAB. One of our senior consultants is providing project leadership as a Six Sigma mentor.