Interim COO achieves significant improvements in an electrical engineering production plant

There was a lack of transparency and trust in local management in the subsidiary of an Austrian group with production in the Czech Republic with over 1000 employees working in multiple shifts on site.

The management of the parent company did not have a clear picture of the situation on site and was accordingly unsettled and dissatisfied. Corporate standards did not appear to be implemented. In the past few years, the Czech plant has always achieved an acceptable positive result every year, but for some time the financial ratios have deteriorated.

Country-specific culture and language obviously formed a barrier between the subsidiaries and the HQ. The position of COO in the Czech Republic had never been filled before and was previously held by the local CEO in personal union. The deployment of a consultant sent by the HQ for several months did not lead to any significant improvements.

The goal was the implementation of an interim COO with departmental responsibility for production, supply chain management, purchasing, quality, lean management, with several years of international experience in comparable positions in a production company as CEO or COO with English as the group language and Czech as mother tongue. As an interim management provider, P+P was able to present a suitable candidate to the client within 48 hours, and the interim manager started working on site within a few days. 

ACTIVITIES:

• Implementation of generally applicable automotive standards and introduction of group standards on site
• Introduction of lean management methods
• Stabilizing and ensuring uninterrupted production despite massive COVID-related staff losses (infections, quarantines, border closure for commuters)
• After significant staff reductions in the course of the first virus wave, a few months later the workforce was increased again significantly due to increasing requests from the OEMs
• Practicing a "zero tolerance policy" towards employees in the event of violations of COVID preventive measures in order to prevent the risk of a production stop due to a large-scale outbreak of the virus and a plant closure by the health department
• Development and implementation of an Andon system for immediate reaction to deviations in production output and / or quality
• Monitoring, control and optimization of the respective performance (performance / output) and quality at the individual assembly workstations and machines / systems
• Training of managers in the use and interpretation of the 'cockpit' available on the display / computer in assembly. Encouraging the responsible managers (production: head, foreman, team leader and quality department) to use the tool. The same applies to the visual andon (three-color traffic light) on the machines
• Qualification of the 2nd and 3rd management level through training of automotive standards as well as correct determination, application and improvement of production KPIs (UPPH, ppm, OEE etc.)
• Exchange of executives ("low performers") in the case of insufficient active support of the change processes
• Coaching of the 2nd level manager before meetings / telcos / jour fixe reports with the contact persons in the HQ
• Culture change in the company and behavioral change in local management from the 2nd level to the shift supervisors / masters and team leaders on the shop floor through active example and permanent correction and control
• "Revitalization" of key employees, who threatened to slide into internal resignation, as their technical know-how and personal efforts for improvements were "stifled" by the organization (colleagues, employees, superiors)
• Elimination of cultural resistance to change measures by explaining the meaningfulness and necessity as well as clarifying the benefits / advantages
• Constant stay on the shop floor, communication with masters, team leaders and employees
• Clarification of whistleblowing incidents concerning the Code of Conduct and preparation of a report for the Executive Board of the Austrian HQ
• Support with the SAP S / 4 HANA introduction and input provider for the development of the MES system landscape
• Cooperation and participation in negotiations with the works council and the union
• In the event of defects / errors / deviations / problems, those responsible consistently demand immediate corrective measures (e.g. action plans, PDCAs, root causes)
• Discrepancies in various reports (e.g. quality, production) are shown and the reports are correctly rebuilt together with those responsible
• Realization of so-called "quick wins" in the departments assigned to the COO- Interface function (linguistic, technical, cultural) between the operational departments and the central departments in the HQ
• Optimization of the production of series products through the introduction and structured expansion of teamwork, periodic shop floor meetings, visualization of key figures
• Co-development of a tool for the daily control of capacity and personnel planning
• Introduction of a daily office floor meeting with production and SCM to optimize production planning
• Reorganization of the production with reduction of the assembly areas from 5 to 4 by amalgamation and dismantling of unsuitable executives, assignment of the workplace fitters from tool engineering to production and physical relocation of the quality controllers from the office to the shop floor

RESULTS:

Sustainable improvement of production KPIs (UPPH, internal ppm, OEE) were achieved such as UPPH during assembly improved by an average of more than 15% compared to the previous year, OEE increased to over 85% on average, quality indicator 'internal ppm' reduced by an average of 26% in the 2nd half year compared to the previous year and COPQ (cost of poor quality) target of 1.25% of sales. Optimism among executives, including the local CEO- regular use / application of lean management tools was achieved. Following rules and instructions more directly, improve internal discipline and a successfully fought against general indiscipline, disinterest and ignorance and won various executives to actively participate (change of the "mindset") were great results. Creation of transparency for the Executive Board in Austria, creation of a "basic" trust- Turnaround (“moving the tanker to change course”) were initiated and consolidated as far as possible. The assignment finished with a orderly handover and training of a successor.