BACKGROUND
Our Client is a chemical-textile industrial complex that produces purified terephthalic acid (PTA), polyester, resin polymers and filaments for PET packaging. With a production capacity of 700,000 tons per year, the company supplies a significant part of the polyester chain in South America.
THE CHALLENGE & ANALYSIS
Renoir was invited to analyse processes and the management control system of the company’s Maintenance, Logistics and Procurement areas to understand the current levels of operational performance relating to costs and output.
The analysis identified opportunities relating to:
- Improving labor productivity.
- The existence of and adherence to management procedures and how current processes could be improved to increase efficiency.
- Reviewing and reducing costs of contracts with suppliers.
- The maintenance organisation in comparison with world-class standards.
- Standardising the maintenance management system across all production units and establishing a common set of KPIs.
PROJECT APPROACH
The improvement project lasting 59 weeks began in the areas of Maintenance, Internal and External Logistics and Procurement, with the Texturing area added to the scope after 26 weeks.
Nine management action teams (MATs) were set up to develop solutions and drive to the implementation of the changes. MAT members conducted training, undertook data analysis and structured the data collected in the field, with each MAT consisting of one company employee and one Renoir consultant. MATs were set up for Internal Logistics, External Logistics, Procurement, Maintenance, PTA Plant Reliability, HSE, Engineer and the Texturing Plant (two MATs).
Every two weeks, each MAT prepared materials for their respective areas to present progress to the Steering Committee consisting of senior management. Implemented improvements were measured against set performance and efficiency metrics and linked to the financial impacts generated, aligning with the strategic goals of the company.
IMPLEMENTATION
The first 10 weeks followed the Renoir Focus Process®, which has been developed specifically to foster ownership and sustainability. In collaboration with the client’s team members, processes that had low efficiency were revised, new performance indicators were agreed, and the entire execution team was trained in how to successfully implement performance improvements.
This process allowed a wider group of individuals to understand the scale of the opportunity and participate in defining the changes required; this in turn allowed them to commit to the program’s targets.
The agreed changes were implemented. In the area of maintenance, changes to processes/systems allowed the function to better plan and manage their daily activities, thereby reducing break-ins, reducing backlogs and improve productivity. Better use of key maintenance methodologies (such as failure modes analysis for critical equipment) led to the improvement in OEE.
These improvements were supported by others in the procurement and logistics areas. The contracting model for parts, materials and services were reviewed; renegotiation, implementation of SLAs, review of min/max stock levels and lead times all ensured that costs were reduced without negatively affecting the maintenance function’s ability to achieve the required levels of availability and reliability.
KEY RESULTS
57 days
Reduction of average Purchase Order age
39%
Reduction of PO backlog
9%
Reduction in total freight expenditure
3%
Increase in OEE and Availability in the PTA Plant
17%
Increase in productivity in the Texturing Plant
CONCLUSION
The ability to continuously optimize and adapt organizational processes is paramount for businesses to remain relevant and profitable.
This case study highlights the critical role that effective management control systems, performance metrics, and interdepartmental collaboration play in driving operational efficiency and overall business success. By identifying and addressing key areas for improvement, such as labor productivity, process standardization, and supplier management, companies can realize significant gains in performance, cost reduction, and overall competitiveness.
Importantly, the engagement of various stakeholders in the decision-making process fosters a sense of ownership and commitment to the strategic goals of the organization. This, in turn, ensures the full adoption and sustainability of the implemented changes and paves the way for a culture of continuous improvement.
In conclusion, the concepts and strategies discussed in this article have relevance across industries, highlighting the importance of process optimization, effective management systems, and cross-functional collaboration for long-term business success.
