INTRODUCTION
Organisation design and throughput improvement are critical success factors for any manufacturing industry. The effectiveness of an organisation’s structure and processes can determine its efficiency, productivity, and profitability. Throughput optimization is essential for steel manufacturing. It helps to identify and address inefficiencies in production, maintenance, quality, and planning systems, resulting in increased efficiency, productivity, and profitability.
Founded some 40 years ago, the Client is one of India’s leading producers and suppliers of stainless-steel long products. The group manufactures and supplies hot rolled round bars, continuous cast billets/blooms, threaded bars, bright bars, forged bars and other products.
It is one of the most technologically advanced stainless-steel manufacturing companies in India with multiple locations and manufacturing units. The company has a well-established footprint in the Indian market and has a client base covering markets across Europe, Asia and North and South America.
THE CHALLENGE
The client was concerned with the lack of management systems at its processing unit and wanted a more appropriate organisational design. The main deliverables were to restructure the organisation and to improve the throughput by installing a new maintenance management control system (MCS) for the production, planning and maintenance functions.
ANALYSIS & PROJECT APPROACH
To meet the objectives of the assignment, it was important to integrate organization structures, processes, and people for the organisation design and restructuring, whilst the focus for the throughput improvement was on improving the management control systems by improving their production, maintenance and planning systems.
Two Management Action Teams (MATs) were formed from managers and supervisors on a part-time basis, who met weekly to review and understand the study findings, participate in the development of solutions and to identify and mitigate potential business risks.
A Steering Committee was set up consisting of senior plant management and board members. The Steering Committee met fortnightly to formally approve To-Be structures and solutions, provide overall direction, monitor progress and address any barriers to success that were beyond the scope of the Project Team and MATs.
“ The project helped us to assess and improve worker productivity, streamline the structure of managerial layers and identify systemic inefficiencies. This has been another successful engagement with Renoir helping us to achieve significant results. ”
Director
PROJECT IMPLEMENTATION
The Organization Design and Restructuring workstream studied 1,000+ positions involved in manufacturing processes associated at the company. To better understand the scope for improvement, the Project Team carried out detailed observations of the activities undertaken by shift workers and determined the most appropriate organization structure required to perform these activities in a department or subfunction.
For the managerial layer, we conducted interviews and completed observation studies to understand the activities and processes undertaken by supervisors to arrive at the To-Be organization structure with efficient spans of control for the different production areas such as Drawing, Peeling, Pickling & Turning, Maintenance and QC.
“The Project has been a great success. Renoir has helped us re-assess and re-evaluate our capacities. In addition, Renoir’s approach acted as a catalyst to improve overall health of business in a focussed and timely manner.”
Director
The Throughput Improvement workstream was divided into four phases of identifying opportunities, designing solutions, implementing the changes and ensuring the changes were sustained. Production, Maintenance, Quality and Planning were the main areas, and the team identified the gaps in their respective processes. An effective management system – with an emphasis on short interval control – was then designed and implemented.
The initial phase involved mapping the As-Is processes and existing management systems for the major process routes: Drawing, Peeling, Pickling and Turning. It quickly became clear that process owners had a limited understanding of machine capacities and that there was no formal structure for monthly/weekly and daily planning. Therefore, machine standards were set, and machine-wise daily planning and reviews initiated.
Maintenance management control system elements were introduced, and initiatives undertaken to improve the quality of incoming materials. The next step was to connect the order planning process with the production planning. The Monthly Production Planning Process was started based on pending orders and work-in progress (WIP) / raw material (RM) availability at both plants. Both WIP and RM were also segregated at the plant for each of the areas based on shape, size, process stage and so on.
RESULTS
12.5%
Organisational restructuring benefit of indirect cost
1,000+
Positions reviewed
16%
Increased production through improvements in production, planning, maintenance and quality control
CONCLUSION
This article emphasizes the crucial role of organisation design and throughput improvement in achieving business success. A deep understanding of work practices and culture within the organization is essential for gaining insights and defining a way forward that aligns with business goals and revenue drivers. Our methodology achieved this, delivering exceptional, sustainable results.
The implemented changes in structure, processes, systems, and controls are well-understood by all, and the Management Control System will drive sustainable incremental improvements by the company and its employees for years to come.
