|Siemens Transzformátor Kft. — a transformer-producing site in Hungary — was experiencing increased pressure from competitors, so they embarked on a performance improvement initiative supported by TRACC. The key priorities were improving on-time delivery (OTD) and reducing costs. Management was trained in Six Sigma principles and problem-solving facilitators, known as Green Belt candidates, were trained to focus on projects. In total, 46 projects were identified with an estimated saving of €2 million per annum. Savings of €1.2 million were recorded after the first year. TRACC foundation best practices were implemented in key areas. Combined with the Six Sigma project, this resulted in efficiency doubling in some sectors. Success resulted from the balance between project-driven improvements and the support of the operational teams.|
The facility produces transformers of two types: cast resin and oil-immersed. There are three plants, of which the metal plant and oil plant have been facilities since 1960. The cast resin plant moved into a new facility in 2009. Most of the equipment was systematically upgraded and mechanised, but some of the original equipment remained in operation.
At that time, 250 oil transformers were produced per week, the majority was custom designed and made to client specification. The average order or batch size was less than five. Oil transformers consisted of over 200 sub-components in varying quantities. The majority of the components was machined and assembled on-site.
Ideally, these sub-components would flow and emerge faultlessly and on time from various manufacturing streams to a final assembly point. Variability in product design, varied component requirements or material and equipment availability resulted in faltering production sequencing, small quality incidents causing significant rework or extended production delays.
Another challenge at the time was an economic slump that resulted in pressure on pricing and volumes.
Variability in product design, varied component requirements or material and equipment availability resulted in faltering production sequencing, small quality incidents causing significant rework or extended production delays.
The competitive factors for the enterprise were price, lead time and design (performance and durability). Therefore, the key priorities within manufacturing were improving On-time Delivery (OTD), while reducing costs. Improvement in First Pass Yield (FPY) would not only ensure improved durability, but also improve OTD and cost. Improved planning processes and work control would have a significant impact and reduce the high levels of WIP.
Although some benefit could be achieved through equipment upgrades, the mindset and focus of the employees would play a more significant role.
TRACC was selected as the improvement approach in manufacturing to drive this transformation. Six Sigma adoption was prioritised to create quick results in manufacturing and the support areas such as customer service, logistics and engineering.
Management was trained in Six Sigma principles and project mentorship. Green Belt candidates (problem-solving facilitators) were trained and paired to focus on projects delivering implementation results within three months.
Thirteen projects were identified with targeted results of €500 000 per annum. Upon completion of their projects, each candidate had to complete a second project (alone or in pairs) to become accredited as a Green Belt. Some of the Green Belts were then selected as Black Belt candidates (problem-solving experts) to receive training and implement projects. These projects would typically be more complex, be of longer duration and span multiple departments.
TRACC maturity progress, combined with the Six Sigma projects, resulted in efficiency (value-adding time) doubling in certain sections.
More Green Belts were trained and a new project was identified. A total of 46 improvement projects were identified, with estimated savings of €2 million per annum. These projects ranged in focus, including production planning, streamlining production flow in key bottleneck areas, implementing kanban systems, optimising transportation, improving quality in key impact areas, material yield, recoveries from suppliers due to rejected material, improving customer service lead times, consistency and communication. A year after implementation, savings were at €1.2 million. Subsequently, further savings have been achieved and additional projects are being identified continually.
At the same time as the training, the TRACC foundation best practices were being implemented in key production areas. Training was intensified and the operations focus was realigned to the business priorities. TRACC maturity progress, combined with the Six Sigma projects, resulted in efficiency (value-adding time) doubling in certain sections, with labour productivity increasing by 25%.
A total of 46 improvement projects were identified, with estimated savings of €2 million per annum.
Success resulted from the balance between project-driven improvements and the support and commitment from the operational teams. This proactive and consistent approach to identifying projects, driving them to conclusion and sustaining the results was the foundation for the future. However, recognising that there were more projects, with greater potential, was the key.
|German-based holding company Siemens AG operates globally, serving numerous business sectors of which the industrial, healthcare, and energy sectors contribute the majority of the group revenue. Siemens Transzformátor Kft. factory — operating in their energy sector — produces transformers for electrical distribution networks, mostly for European utility companies. It contributed €90 million of Siemens AG’s reported 2010 revenue of €76 billion. It is this production facility, located on Csepel Island in the Danube on the outskirts of Budapest, Hungary, that embarked on its world class operations journey using TRACC. The factory was founded in 1960 as a state-owned company, and produces oil-immersed and cast resin transformers for use in the domestic and regional markets. In 1996, the company was bought by Siemens, and now operates under the name Siemens Transzformátor Kft.|
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