Optimizing delivery times through an agile manufacturing strategy
A listed company and world leader in manufacturing gearboxes for wind turbines and industrial applications, employing more than 1800 people worldwide, had always operated in an "Engineered-to-Order" (ETO) environment. While ETO enabled customized product designs for its customers as well as low inventories, the company found that it was losing orders because its competitors had shorter lead times. As a global player, the company increasingly felt the need to provide an agile response to the market for certain product groups. Moving to a "Configure-to-Order" (CTO) model would be an enabler for growth.
Ambition: Transitioning to a Configure-to-Order model
Transitioning to a CTO-model could greatly improve market responsiveness and reduce delivery times. Effective coordination across departments enabled the cross-functional collaboration internally as well as with its value chain partners. Our customer wanted to deploy this unified strategy as it would be essential for streamlining operations and achieving agility and efficiency.
How we helped: Streamlining production & enhancing agility in CTO transition
To ensure the production process remained agile and responsive to market demands, the new manufacturing strategy was gradually built on through the monthly Sales & Operations Review cycles. This involved identifying "critical" parts and producing them to forecast, as these parts couldn't be made or purchased within the response time.
Other parts and direct materials that could be made or purchased within the response time were supplied "to order". In parallel, internal lead times were reduced with lean manufacturing, thereby streamlining the assembly process and reducing overall lead times.
Results: Lead time reduction & enhanced operational efficiency
The implementation of the CTO-model and associated processes led to several key shop floor improvements. Also, the production scheduling was professionalized. As a result, lead times were reduced by 20%, enhancing the company's ability to respond quickly to customer demand, as such ensuring its position in the broader market.
Ready to provide an agile response to the market by changing the operations environment? Contact us today to learn how we can help you.
