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ELEMATIC: Over 50 percent points improvement in spare parts’ deli­very accuracy

About Elematic

Elematic is the global technology and market leader in precast concrete technology for residential and non-residential buildingsIt provides precast concrete producers with technology, production lines, products, and services that make the customer succeed. 

  • Industry: Manufacturing 
  • Founded: 1959
  • Company size: 65 MEUR
  • Markets served: Operates in over 100 countries on six continents 

“We started from a rather low-performance level, but after half a year, we had made a substantial improvement and reached a 90% delivery accuracy level for the first time.

We increased the delivery performance by 50 percent points.”

Mats Jungar, CEO, Elematic

Challenge – Declining delivery performance in the spare parts business

Elematic’s market is growing rapidly – especially in India. There has been a growing demand for high-quality residential buildings and business space. Elematic’s precast technology enables fast and cost-effective building and therefore, it’s a suitable technology for rapidly growing markets.

However, growing demand caused challenges for Elematic. It was facing a tight supply market with long and even increasing delivery times as well as few capable suppliers to meet the high-quality expectations.

Elematic needed to respond to demand and tackle the delivery performance challenges quickly. “We didn’t know which actions would affect the most to increase our efficiency as quickly as possible,“ tells Mats Jungar Elematic’s CEO.

There were various kinds of challenges and symptoms, but a clear approach was missing. Elematic decided to use external help to investigate root causes and get a second opinion on how they can improve their performance.

Case Elematic Capacent
Picture by Elematic

What was done – Systematic problem solving, new tools and processes, and coaching

Since ensuring delivery performance is not a one-man show, it was clear that a deep dive to all the functions related to the whole supply chain and especially the collaboration between the functions was needed. Based on initial thorough analysis involving sales, warehouse, quality, procurement, sourcing and even some suppliers, we prioritized actions and moved ahead step-by-step instead of trying to extinguish all fires at the same time.

One key success factor for the project was to provide visibility to the different areas affecting delivery performance. This provided an undisputable, fact-based overview, so that discussion and actions would not be based on assumptions. In the beginning of the project KPIs and reason codes were defined, and dashboards were updated systematically to ensure the implemented actions were having the desired affects.

In addition to improving visibility, clarification of existing processes and creation of new ones were done in close co-operation with the organization. These were then implemented with new tools, analytical support and governance to ensure implementation. The implemented models included, for example, daily leadership/shop-floor-management methods originating from lean management. Some examples of other implemented actions across the supply chain were:

1. Market-to-order  

Since delivery performance starts and ends with the customer, clarifications for the customer promise was needed. This gives vital information to stocking decisions and inventory control. In addition, customer segmentation was done to define the aspects of a profitable customer. This was used to prioritize deliveries if needed.

2. Order-to-cash 

The biggest improvements in the order-to-cash phase of the supply chain were implemented in the warehouse department. For example, visibility of backlog and upcoming orders were provided to support with capacity planning. In addition, the whole layout of the warehouse was redesigned to increase efficiency and save space.

History of backlog and upcoming orders case Elematic

3. Procure-to-pay 

Main goal for the procurement department was to create an operative model including task and role definitions. Implementation was done with hands-on operative support in tool creation as well as analytical support mainly in relation to purchasing decisions and order follow up.

Acceptance rate of orders proposals Case Elematic

4. Source-to-order 

Similarly, to the procurement function, the operative model of the sourcing team was clarified with role definitions. In addition, analysis support to the delivery performance of major suppliers as well as critical items with long supply chains was provided.

Delivery time Case Elematic Capacent

“Vital aspects of the Capacent approach were the increased collaboration as well as the improved communication across the organization. Due to the involvement of a wide range of functions, the scope and resourcing needed active management to keep focus and momentum. I appreciate Capacent’s approach. They created the operating model and then coached and supported our people to follow the model to make sure it really works in daily work.”, says Jungar.

Emphasis was put in engaging and coaching people in cross-functional workshops and other training that increased learning within the organization to ensure sustainable results.

“We needed to develop our understanding and skills in order to enable our own organization to further develop our processes without external help. This was one of the criteria for choosing the partner.”

Mats Jungar, CEO, Elematic

Mats Jungar CEO Elematic
Picture by Elematic

Results – 50 percent points improvement in delivery accuracy

“We started from a rather low-performance level, but after half a year, we had made a substantial improvement and reached a 90% delivery accuracy level for the first time.” Furthermore, Mats Jungar brings up the warehouse optimization results: “We were able to avoid investing in new warehouse facilities as we improved utilization of the existing space. Space should now be sufficient for the next 10 years!”

Also, the communication and collaboration improved a lot in the organization: Mindset changed from silos to finding solutions together. “The most important things are that we have learned what kind of problems we have and how to work in a different manner,” says Jungar.

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