Improvements in asset productivity after 26 weeks:
About The Client
Our client is a multinational conglomerate that has a presence in 18 countries across South America, Europe, North America, and Antarctica. It is a leading name in the field of environmental management, placing ESG as one of its core business pillars.
To ensure effective compliance, it also has business units specialising in management software — reinforcing its role in environmental management through technology and artificial intelligence. it has registered patents for sustainable products, promotes the circular economy, and helps companies with the correct destination of their waste.
The client wanted to investigate the costs of the contractual operations of one of its main customers that was affecting its contribution margin. We were brought in to perform a gap analysis and help the client better understand how cost management could be improved.
What Was Discovered
The subsequent analysis highlighted the following issues in executing processes:
- Low-level usage of available resources (machines, equipment, vehicles, and labour)
- High fuel consumption due to inappropriate routes and/or cancelled and changed service schedules
- High level of rework of operations carried out, due to non-compliance with SLAs (service level agreements)
- Low compliance to world-class operating requirements which leads to low customer satisfaction
How We Helped
Based on the results of this analysis, we sat together with the client-side team members to map out a transformation programme — taking place over 26 weeks — that would help the client build new processes. The two main milestones that we wanted to hit were:
- Review and development of the Contract Structuring Model that covered governance, procedures, and relationships with customers
- Improve the productivity of contracts by better managing the processes and monitoring deviations from performance, such as fulfilment of deadlines
What Was Implemented
- New approaches
Using our patented Focus Process®, we developed a transformation programme specifically to promote ownership and sustainability. We defined and developed existing processes, procedures, and key elements of the management control system (MCS).
We also developed a Lean Manufacturing approach to better define critical objectives and needs. This step helped to foster management commitment and engage the customer’s workforce to carry out process mapping, identify bottlenecks and understand where there was waste.
- New tools
The value stream mapping tool was used to define the process and identify loss due to idleness, excessive displacements, and low availability. It also allowed development of a fleet distribution model which highlighted low productivity and workloads imbalances for operations, planning, and scheduling.
New tools were also created to scale the necessary structure to meet the needs of the business, balancing the workload to meet deadlines and contract SLAs.
The MCS that we developed allowed actions to be taken based on process performance indicators, which improved the efficiency and profitability of the contract. A short-interval review meeting model was implemented, so that the team was set up to act on root causes shown by the new MCS.
At the end of the 26-week project, the improvements in asset productivity were encouraging:
In addition to an ROI of 3:1, these results also translated into long-term benefits. The client was now able to:
It established a culture of continuous improvement, as well as a commitment to excellence. As a result, we enabled the client to improve overall productivity and reduce the number of equipment and vehicles needed for its operations.
In the end, we were able to help the client achieve its objective of redesigning the contract management processes, reviewing the processes and respective interfaces, and allowing employees involved in the implementation teams to acquire key skills in managing change.