Lean management and Industry 4.0 for medium-sized companies

1. Company Development

Due to external or internal influencing factors, changes to companies are bound to happen. Change always represents a new challenge, but also presents new opportunities and a good example here is the current process of digitalisation.

Those who fail to react will sooner or later miss the boat. The possible consequences are:

Lower EBIT margins
Increased personnel and materials ratio
Higher working capital

The development of the company is slowed down and a digital transformation is made considerably more difficult. Instead, do you wish to expand, move business units at home or relocate abroad and stay competitive while digitalisation is in full swing? Rödl & Partner offers support:

We will help you to maintain and further expand your market position.
We are convinced that flexible and business processes organised to be sustainable are the right basis.
Together with you we identify and exploit the potential in your company.
In this process the customer perspective is decisive.
We help you to assess the structures and processes of your company according to the respective contribution to the value chain.

The aim is to continuously improve your business processes according to lean management criteria. In this respect we are happy to carry out a quick check for you to indicate how you can organise your company development to achieve success.

Our previous success stories:

The critical inspection of the value added structure with a food producer enabled savings to the amount of 250,000 euros.
The direct fine-tuning of processes and the ERP system allowed the reduction of stocks and an increase in efficiency.
With a toolmaking company flexibility for customers could be increased using transparent order processing in the administration.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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2. Development and innovation

Independent of the market and sector, product developments and new products are decisive for sustainable company success. In future, product lifecycles will be ever shorter just as with production or delivery times.

Therefore it will become increasingly important for companies to also continuously improve this area. Yet in many companies the reality looks different. Instead of a quick development process oriented to customers there are frequently:

Long development times and late market availability.
Product developments which do not meet the requirements of the target customers.
Higher development costs which deviate from the budget.
Additional and higher costs for the finished product in the production.

Lean development exploits the standard principles of lean management in the product development. In consultation with you Rödl & Partner realises efficient development projects and waste is avoided right from the beginning.

In this process each improvement is designed to focus on the customer and his benefits. This is because even the quickest development is not effective when the customer will not buy the product.

In addition, production processes are already taken into account in the product development process and standardisation is encouraged. This minimises the possibility of unpleasant surprises such as higher production costs and uneconomic production processes.

A holistic improvement of the development therefore focuses on the series product in addition to the development process itself. Lean principles positively affect the development as follows:

Reduction of lead times and development costs.
Launch of the right product at the right time on the market.
Efficient manufacturing processes are established and product costs reduced.
Avoidance of production errors to ensure high product quality.
Avoidance of unnecessary product variations to minimise complexity of the product range.

We implement the concepts and ideas of Rödl & Partner in consultation with you. Here we pursue the common aim of realising successful products in a short time on the market.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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3. Purchasing

It is a fact that the ordering costs of top companies are roughly 50% below the average. How is that possible? Purchasing is an important component of the value chain in all companies. It decisively influences costs, quality and the delivery service. In addition, it is the interface to suppliers in the supply chain and therefore also communicates the corporate strategy.

In many companies the problems in purchasing revolve around 2 core areas:

The operative processes in the purchasing department are not sufficiently fine-tuned.
Strategic measures are not applied in the area of purchasing.
Inefficient processes in daily operations prevent the smooth procurement of materials. The reason is often that:
Standardised processes are not defined or not practised
Information on the ordering process has to be collected which takes time
The data available in the ERP system is uncertain

That costs resources and hinders transparency. There are also other shortcomings:

Strategic purchasing is often not separate from the operative business or even not pursued
A structured supplier management or consistent parts strategy is not a priority

It is, however, decisive for success to consistently assess suppliers and exchange information on targets, problems and contracts. It is also important for the company to have a parts strategy which is practical to exploit potential and purchase more efficiently.

Rödl & Partner will help you to organise your purchasing more efficiently:

In consultation with you we determine steps which are suitable for your company.
We embed lean principles in your purchasing and so enable efficient and low-waste processes.
This allows us to better exploit potential including:
Improved and sustainably lower costs.
A shortening of the delivery time and quicker reactions to customer requests.
Integration of key suppliers in the value stream to improve the partnership.

This enables us together with you to create more security and flexibility in your supply chain and establish sustainable added value.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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4. Supply Chain Management (SCM)

There is hardly a product in the field of industry which is possible without a supplier. Suppliers exist where raw materials, auxiliaries or semi-finished parts, e.g. metal plating, are processed outside of the own company.

But the processing and delivery times often do not correspond to the production processes. In addition, processes and transfer within companies and inefficient interfaces can lead to problems between affiliated organisations.

Such problems frequently result in supply bottlenecks, production downtimes or overstocked warehouses. The result is that the working capital is always increased. In consultation with you, Rödl & Partner analyses your processes within the supply chain. We identify weaknesses with interfaces, regardless of whether the supplier is an external company or an affiliated company which supplies several affiliated companies with goods.

We analyse the delivery performance and identify suppliers which could be a risk for your supply chain. Rödl & Partner will help you to adjust your supply chain to meet the requirements of your customers. Here we focus on the value chain:

Pull production in accordance with KANBAN principles is the basis for a needs-based supply of materials.
In the area of purchasing information flows on notifications and product movements from the warehouse are essential as important control parameters.
ERP-supported processes also allow a technical interface to suppliers.
A warehouse system based on time according to the principles of lean management provides a sustainable, long-term success for the warehouse logistics.

A supply chain which has been analysed and improved will ensure the long-term success of your production:

Demand-based control can be used to reduce warehouse space by up 40%. This enables cost savings without having to make big investments.
Orientation of the production towards the customer ensures excellent flexibility and reduces stocks in the production by up to 30%. This secures the competitiveness of your company.
Transparency in the supply chain enables the reliable forecast and calculation of delivery deadlines.
Thanks to high employee satisfaction derived from a reduced searching time and transparent processes, higher productivity can be achieved.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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5. Production and logistics

German medium-sized companies continue to grow and develop. This has an effect on the layout of production facilities and the employed personnel resources. Standard hierarchical structures are frequently seen with foremen and master craftsmen. These structures orient towards different machine groups or trades within the factory layout.

The employees in the production fetch the required raw materials from a central warehouse area. The internal plant logistics is the responsibility of the incoming goods department which fills the central warehouse. It partly also supports the transportation of materials when a forklift is required.

In this form of workshop production the structure is oriented to the individual activities and not directly to the sequence of the production processes. This is associated with a number of problems and inefficiencies:

In order to fully utilise all the existing machine groups, often a high number of orders is processed in parallel in the production.
Before and after each machine group orders wait for further processing.
High intermediate amounts of semi-finished products and long lead times for individual orders are the result.
This frequently has a negative influence on adherence to delivery dates and can result in a higher error rate.

For production controllers the lack of transparency of the status of the orders represents a considerable increase in costs relating to co-ordination and communication. Retrieval from the warehouse often burdens the employees with long walking distances and a long period of time for searching and reduces the available productive time.

Rödl & Partner offers you a wide range of consulting expertise based on many years of proven methodological competence. We will help you to make your company fit for the future. In consultation with you, we will orient your value added processes to your customers.

Together with you we analyse your processes, from the incoming goods until shipping.
We identify weaknesses and change these with your employees into solutions.
We also help you to master the digital transformation in your production.

The use of new logistics concepts to successfully separate direct productive work and indirect supply functions makes employees in the production more efficient. It also ensures smooth supply cycles through qualified logistics personnel. Logistics need not end at the entrance door, it can also become more efficient when suppliers and logistics service providers are integrated in the process.

The previous success stories of Rödl & Partner in the area of production and logistics:

We were able to reduce the warehouse stocks of customers and therefore also working capital. This in turn improved the usage of space.
Improved production processes resulted in shorter lead times, less errors and secure excellent adherence to deadlines for customers.
The transparency achieved simultaneously reduced the time required for co-ordination in the area of order planning and control.
Improved and stable processes increase output and put the company on course for success.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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6. Sales and administration

In the production, many companies already utilise lean management to increase their added value. With such projects the administrative processes are often ignored which means that important potential remains unexploited.

But especially in administrative areas such as sales, design or purchasing, lean management can help to decisively improve company processes.

An analysis of the administrative processes in this respect often detects the following problems:

Inefficient processes which are time intensive
Frictional losses between departmental interfaces
Many subsequent enquiries and a high co-ordination requirement
Missing key performance indicators for the measurement of the process efficiency

In consultation with you, Rödl & Partner discovers definite areas in your administration where there is a potential for improvement:

Low-waste processes which are strictly oriented to the customer
Seamless processes
Definition of standards and resources
Implementation of indicators for performance management

Lean administration in the company can realise many positive effects:

Lead times are shortened
Internal and external customer orientation are improved
Process efficiency is significantly increased
Quality is improved, errors are avoided and complaints go down

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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7. Delivery capability and adherence to schedules

Participants in a customer satisfaction survey state that adherence to delivery deadlines are important for the purchasing experience. The average customer is ready to tolerate unreliability when a 10% discount is granted.

This study reflects the challenge which many companies are faced with, i.e. we have to deliver, as otherwise it could become expensive.

Many businesses try with the aid of large stocks to counter the constant pressure of expectation. The result is ever higher and further growing stocks. The following real factors for success are then no longer the main priority:

Good and realistic planning of the organisation process
Processes throughout the company focussed on the customer

The 2 core elements of our consulting approach include planning on the basis of backwards scheduling and organisation of company processes according to a lean philosophy. For backwards scheduling the capacity is compared to the delivery date requested by the customer and the order is started according to the time needed for the production.

It is important here to be able to exactly inform the customer when his product will be delivered and then to keep to this promise. The orientation of processes to a lean philosophy ensures that the lead times are measurable and transparent.

Here Rödl & Partner primarily concentrates on 4 elements:

Introduction of production according to the pull principle.
Batch size reduction if possible to the single piece flow principle.
Organisation of process steps according to the cycle principle.
Avoidance of rejects according to the zero-defect principle.

Thanks to backwards scheduling and the orientation of process to lean criteria, your ability to deliver and adherence to deadlines will improve considerably. In addition, you will gain more transparency in your company and are more easily able to identify internal and external areas where there is potential for improvement.

Previous success stories of Rödl & Partner at a glance:

We helped a client to reduce his lead time by almost 75% and ensure a delivery reliability of over 90%.
Thanks to the integration of an Excel-based order forecast tool in the production planning process we increased the delivery reliability of a client to over 95%.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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8. Capital commitment costs

Companies have high capital commitment costs when decision-makers believe that only high stock levels can satisfy customers with regard to delivery reliability and availability.

In a time where products are ever more individual and markets are quickly changing, this inflexible strategy can result in substantial costs for the company.

The capital commitment is mostly tied up in current assets and machines:

Those who wish to deliver quickly need more stocks and stocks need a lot of space.
Those who wish to be efficient need good and new machines.

The problem with the tied capital is that your company makes investments which are not necessary and which make it inflexible. The result is that due to a shortage of liquidity business opportunities are not exploited.

We will help your company to reduce the cost of the committed capital and at the same time to increase customer satisfaction. Thanks to a high level of customer orientation and flexible and lean processes we enable:

A reduction of capital commitment by reducing the level of your stocks in consultation with you.
A sustainable balancing of your fixed assets.

We view your company as a holistic system and together with you we analyse the consumption, customer behaviour, value stream and opportunity costs so that together we can elaborate the appropriate measures.

All the steps are accompanied by concepts for lean and flexible processes such as the operative lean tools of kanban and the philosophy of pull production.

A number of Rödl & Partner success stories at a glance:

Our client in the electronics industry was able to release 300,000 euros because we were able to help him reduce stocks.
Our selective analysis helped a producer of toys to understand why his material costs deviated to such a large extent to the plan.
Process improvements in a metal processing company enabled the avoidance of having to spend 800,000 euros on an investment.
Thanks to our 4-day workshop on the analysis of processes we were able to save our customer the costs of roughly 4.5 million euros for an investment.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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9. Productivity and increasing output

Most companies have a potential to increase output and productivity. In many cases this can be easily achieved without the need for large investments.

It is not slow machines or old equipment which is unproductive, but rather the following factors:

Inefficient processes (e.g. set-up changes or offer and order processing)
Long waiting times for employees
Amount of time required for searches
Missing or incorrect information

In this respect in addition to improving the productive processes in a company, also the administration, sales, shipping, logistics and nearly all other areas of the company can benefit.

Step 1: The analysis.

In consultation with you we analyse your company processes.
After the first rough analysis we focus on the areas which have the highest potential.
Together with your employees we look at the processes in detail on site.
The results of the analysis are used to elaborate an action plan.
Experience shows that many improvement projects get bogged down in the planning phase. The action plan also includes the schedule and assignment of responsibilities.

Step 2: In consultation with you we implement the measures.

Speed is decisive to exploit the momentum of the first step.
We also actively support your employees here to build the first prototypes for resources and tools, try these out and improve them in an iterative process.
The quick process of change and close involvement of the employees serves to ensure a high level of acceptance for the planned changes.

Step 3: The success.

Set-up times on large machines can be reduced by up to 80%.
This time can be used to add value and directly increase productivity.
In projects we were also able to increase the number of orders processed by sales without additional employees.
We were also able to change the production planning and control to increase the number of products manufactured and increase turnover by 15%.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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10. Rejects/error rates

Regarding defective production, sometimes rejects are justified by saying that added value is increased by their further processing, for example with offcuts. In general, however, rejects do not create added value and also create costs.

These costs are hidden in the accounts, but you recognise these costs by asking the following questions:

Did your material cost ratio increase without a change to the price structure?
Did your personnel cost ratio increase because more employees had to be employed in order to do the same work?
Are your stocks of raw materials or semi-finished parts increasing or higher than the normal level for your industrial sector?

These are just 3 examples which serve to identify the existence of rejects. The situation is made more difficult when depending on the production process delivery deadlines cannot be met. This results in higher internal costs and also puts pressure on the relationships you have with your customers.

Rödl & Partner will help you to minimise offcuts and errors in your production. We reduce waste by carefully planning your resources with you taking into account the desired delivery date.

Errors can arise throughout the process. In consultation with you, we use the following steps to reduce the error-rate:

1. Introduction of mistake-proofing with poka yoke:

This tool recognises and avoids errors.
It ensures that errors do not even occur throughout the process.
An example would be a shadow board for the organisation of tools.

2. Reduce batch sizes to a minimum:

If errors occur during processing, these can be more quickly recognised with a smaller batch size and more quickly resolved.
This serves to reduce the level of rejects and the number of good parts increases.

3. Implement standards:

Those who work to clear standards increase routine and therefore reduce the risk of errors.
This is particularly true with a fluctuating staff or the use of agency workers.

In consultation with you, Rödl & Partner develops the appropriate steps for your company in order to avoid rejects. We have already been able to help many clients achieve success. In one case, for example, we were able to successfully support our client to improve his internal logistics and integrate the improvements in his system. This almost eliminated all of the production errors.

Contact us – Rödl & Partner is at your service: you can reach Thomas Schlag by email or telephone at +49 221 949909514.

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11. Lead time

In the times of e-commerce and online trade it has become quite normal for private customers to receive their purchases on the next day. In the business world, businesses are also more and more confronted with 2 questions:

When can I receive my product?
Could you do it quicker?

A short and stable lead time is required in order to enable on-time deliveries at short notice. The lead time includes the complete time from the start of production up to shipping. Practice shows, however, time and time again that the company is already unable to definitively answer the first question (When can I receive my product?).

There are many reasons for long, fluctuating and intransparent lead times:

Very many orders which are pushed through the production in one go.
Far-flung work stations which are not co-ordinated.
Inconsistent control where the priorities are often postponed.
Established processes which are not directed to specific products.

These problems result in further problems:

Long delays between the different processing steps.
The sequence of orders changes depending on the work station and therefore also the time of completion.
High searching and co-ordination time required for employees in the production control and also in the areas of production and logistics.

Lead times: Rödl & Partner elaborates solutions together with you

Lean, low-waste processes with added value steps oriented to the customer enable efficient progress through production to enable a short and stable lead time.
Production steps are co-ordinated to each other which results in a seamless flow of the products along the value chain.
The work stations are correspondingly organised for this purpose during the production sequence to shorten distances and minimise waiting and delay times.
The use of visual aids helps to create transparency and simplifies the production control.

Thanks to simple, standardised rules, methods and resources the lead time can be considerably reduced. This enables the reliable forecast of delivery times. Your customers will thank you with satisfaction and loyalty.

Contact us – Rödl & Partner is at your service: you can reach Jens Hinkelmann by email or telephone at +49 911 5979 60.

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Our consulting services

​1. ​​Company Development

​2. ​​Development and innovation

​3. ​​Purchasing

4. ​​Supply Chain Management (SCM)​

​​5. Production and logistics

6. Sales and administration​

​​7. Delivery capability and adherence to schedules ​

​8. Capital commitment costs​

​​9. Productivity and increasing output​

10. Rejects/error rates​

11. Lead time​

Contact

1. Company Development

2. Development and innovation

3. Purchasing

4. Supply Chain Management (SCM)

5. Production and logistics

6. Sales and administration

7. Delivery capability and adherence to schedules

8. Capital commitment costs

9. Productivity and increasing output

10. Rejects/error rates

11. Lead time