Our client, a global manufacturer specializing in chemical catalysts and the design of processing plant and equipment, boasts a revenue of EUR 850 million and a workforce exceeding 2,300 employees.
Business Challenge
Despite a long tradition of innovation, the client still worked with traditional stage-gate and project management processes.
The company faced a sudden spike in production costs, prompting them to reassess the total cost of ownership. This was further complicated by the fact that the engineering group was spread across two locations in Europe and Asia (with the Asian site recently opened and seeing high turnover) using distinct processes and incurring varying costs.
Additionally, the expense of altering existing machinery was prohibitive, largely due to space constraints and the high cost of raw materials, which constituted 80% of the total cost. With limited bandwidth for research and development, addressing these challenges posed additional hurdles.
Despite high customer demand, which restricted opportunities for line stoppages to implement design changes, the company remained committed to optimizing its operational efficiency.
In addition, engineering team was not aligned around knowledge and value creation and did not promote ownership and flexibility in decision making at the project and portfolio level.
Approach
Drawing on EFESO’s 7 1 Lean Product Development essentials, the cross-functional team focused on two pilot projects to demonstrate the following LPD principles:
- Match Throughput to Business Needs
- Portfolio Cadence & Flow
- Visual Management
- Reusable Knowledge
EFESO supported in creating a holistic Value Engineering with the following outcome:
- 67 Design Change Proposals challenging the current residual catalyst: 14 raw material related, and 53 process improvement related (27 for the carrier and 26 for the catalyst)
- 63 of them with spin-off possibilities, i.e. proposals applicable to other catalysts (with higher volumes compared to the one under study)
- 25 proposals to reduce energy consumption
- 31 proposals to increase production capacity
- 32 proposals with <6 month to implement; 15 within 12 month and 20 R&D proposals that require extensive testing and are >18 months to implement
- Open minded and pro-active cross functional team including R&D, production, purchasing, process engineer, chemistry specialist, product manager and sales
Main Results
- 25% to 30% reduction of energy (gas) consumption per ton
- 10% increase in project delivery capacity and time to market through optimized portfolios, visualized work and leveraged knowledge
- Resulting in $22.5 million increase in annual revenue
