Increasing Major Company Process Performance at ZVVZ

Co-operating with LOGIS, the South Bohemia based ZVVZ a.s. are implementing a project designed to improve business case process performance. i2 Factory Planner advanced planning and LOGIS Enterprise Manager project planning technologies are employed under the project scheme.

1/5/2005

ZVVZ a.s. is a significant global supplier of air-conditioning and other environmental products and facilities and related services. Under their business cases, the company with approximately 1,050 employees deliver facilities designed and tailor-made to specific customers. This means that joborder and small batch production prevail at the company. The business cases are characterised by pre-production activities and the actual manufacture and assembly of the required components right at the customer sites. Controlling such job orders hence amounts to managing rather complex projects. The Chairman of ZVVZ Managing Board, Ing. Miroslav Knot, adds regarding the project: “The nature of ZVVZ’s business is becoming ever more sophisticated. Customers are no longer willing to be content when the word ‘order’ is linked with the word ‘quality’; they do and will want more. In addition to quality, we have to provide them with more reliability, promptness and flexibility. We are dealing with a business where just these parameters are very difficult to be improved. But all the better, the competitive edge will be that we will gain as soon as we manage to shorten our delivery dates, improve our responsiveness and increase the reliability of our deliveries. Therefore, systematic attention is paid to the issue of improving the quality of our major production processes. What we’re striving to attain is to operate with lesser reserves, both time reserves and reserves between the individual operations, and reserves in stock or capacities, to respond to any change in a rapid and optimal manner, which is a factor in our ability to comply with the business cases. We have to learn to do ‘the right things at the right time’, to operate while retaining better control of the process, to reduce the effects of local decisions and, on the contrary, control the activities in the entire process at the same time. Therefore, the objective we seek to achieve in the company is a certain degree of operational excellence. LOGIS was given the role of our project partner. We make use of their advanced planning technology and know-how and we don’t regret that decision. Although there are a lot of modifications yet to be made, a lot has already been changed. In my opinion, I’m right in saying that we have jointly launched the process of continuous improvement.” As soon as we were preparing the project, we decided to divide it into two stages, the implementation stage and fine-tuning stage. The implementation stage was scheduled to take 12 months and it sought to yield engineering/ organisational conditions for the changes to be introduced, and provide the necessary tools to promote the changes so that they were ready to be directly employed in our plant. Now, once the implementation stage has been brought to an end, we’re in for the fine-tuning stage to polish the processes with of view of enhancing performance parameters such as consistent compliance with production deadlines, stock rotation times or continuous production times,” says Ing. Jiří Lesák, Quality and Control Director, who is in charge of managing the project. “Even before the project was launched, while we were preparing a logic model of the project along with our supplier, we realised that our biggest task would be to provide for the changes in the attitude of the people. For instance, we introduced changes in the manner in which production documentation is drafted – the structure of bills of material and routings must comply with the production logic; otherwise, their applicability in supporting production control would be limited to a great degree. We had to absorb the concept of production planning as a dynamic process, the concept of a business case being a process replete with random effects of various degrees of significance and impacts, a process where accurate figures tend to mingle with inaccurate figures, approximate timing with exact timing, through a process that we nevertheless wanted to submit to precise control. It is just the dynamic nature of the planning process that necessitated organisational measures that also included the foundation of an independent logistics department directly subordinate to the Chief Executive Officer. Last but not least, we had to substantially upgrade the production feedback as one can only control that of which one actually possesses information. The previous practise was to register information on the withdrawal of the products from the shops on paper, with a certain delay and a low degree of precision – therefore, the plant top management were practically denied the chance to interfere with the immediate operative control in any way, and were left with the mere option to assess, ex past facto, how well we had been doing. For this reason, there was no power in the plant that could efficiently and in real time synchronise all the activities associated with order performance, i.e. to provide efficient and effective management with regard to the actual state of affairs. Therefore, we were confronted with the need to create an environment wherein the information could be monitored in an on-line mode, continuously and with a high degree of precision. The above examples clearly show that the changes introduced genuinely applied to all key activities associated with the process of business case performance. The commercial department staff and the designers had to grow accustomed to the necessity to define the deadlines more exactly and monitor them during the pre-production stages. The engineers and technologists had to modify their long-standing habits in creating design and technological documentation. Production and purchasing employees experienced a significant change of job procedures. The foremen, overmen and labourers had to get used to entering data on their undertakings in the ‘computer’ on a daily basis. These were and are huge changes, but in the entire course of introducing them, which admittedly was a painful process at times, we never lost faith in them being a necessary precondition to our successful completion of the project that sought to strengthen our competitiveness,” Ing. Lesák concluded. Because the focal point of the project, right from the beginning, was to improve the specific performance parameters, the latter were subjected to regular monthly measurements, for which Ing. Jan Buriánek, ZVVZ Production Director, and Ing. Tomáš Vojtík, LOGIS Implementation Director were responsible. “In the contract we had defined an accurate metric to be applied when measuring the degree of delivery reliability, stock rotation and continuous production time, and the metric was then complied with throughout the project implementation stages. Similarly, we determined the internal values at the commencement of the project to which we would eventually juxtapose the results achieved. Using the measurements performed, we can objectively conclude that we managed to increase delivery reliability and reduce the production lead time,” says Buriánek. Vojtík had the following to add: “Improving the above parameter necessitated, in addition to other things, that a number of organisational and personal measures had to be taken in order to provide better co-ordination between the production departments and centres. The fact that, at the time being, the contractual values pertaining to the performance parameters, against which we evaluate the project results, are being complied with attests to the positive effects that the introduced changes brought about. It would be unthinkable to introduce such far-reaching changes in any company without the support of the top management. Obviously, the project was approved of by the company’s Board of Directors. The members of the top management were appointed to take roles as members of the project control committee that provides lasting support to the project.” The Chief Executive Officer, Ing. Miroslav Knot, had the following to say about the project: “I’m convinced we set out in the right direction by deciding to launch the development project and that we did a lot of work when implementing it. For instance, the time within which we are capable of deciding on the possible delivery date while taking into account the availability of the key capacities and subdeliveries moved from days to the region of hours. The exactitude and reliability of information on the degree of completion of the projects and the planned completion of the order have increased substantially. These are not only the results of the introduction of the planning software. In my opinion, a high degree of competence, expertise and experience on the part of the supplier’s employees is a key factor in successfully completing projects of this type. Even when the project was in progress, it became clear that LOGIS were capable of providing this, having deployed a team of highly qualified consultants at ZVVZ. If the project as it has been pursued till now had been assessed, I could state that compared to the previous time, we have acquired greater awareness that the activities associated with this development project, hence those activities focused upon improving the process of business case performance, should actually become a permanent part of our work. Therefore, we intend to go on perfecting our ability to plan and control the process of order performance in the future. We will draw upon the existing results of the development project and, along with LOGIS, focus upon better planning and control of the non-production stages (sale, design, construction etc.).”

About LOGIS

LOGIS is a supplier of expertise services and information technologies. The deliveries are executed in the form of projects aiming at improvement of management effectiveness and development of business success at the customers’ businesses. Within the framework of their solutions, LOGIS applies advanced managing and planning methods and procedures, including high-performance information technologies in the field of Supply Chain Management (SCM) and Advanced Planning and Scheduling (APS).