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Managing a Manufacturing Plant During Crisis

Managing a Manufacturing Plant During Crisis

The Corona virus crisis has brough an unexpected management situation to the majority of production companies. Ho to deal with this new situation? This crisis is very different from all the other we have ever experienced. The proven methods from the past are simply not relevant anymore. 

However, there are similarities and lessons learned, that could be used today. 4 experienced interim managers we have discussed and shared their experience and observations with our EIM Community.

Jan Przepióra

Jan Przepióra

Operations Management

Industry:

  • Technical
  • Print/packaging
  • Pharma

Projects:

  • Turnaround Management
  • Process improvement
  • Crisis management
  • Greenfield Investment
  • Business Process Optimisation
Tomasz Skupień

Tomasz Skupień

Operations Management

Industries:

  • Technical
  • Automotive
  • Metal Processing

Projects:

  • Restructuring
  • Process Improvements
  • Transfer of Factories, Greenfields, Brownfields
Cezary Ciecieląg

Cezary Ciecieląg

Operations Management

Industry:

  • Automotive
  • FMCG
  • Windows industry

Projects:

  • Turnaround / Crisis
  • Process improvements
  • Lean Management
  • Greenfield, Brownfield
  • Factory Relocation
Beata Elert

Beata Elert

Supply Chain, Operations

Industry:

  • FMCG
  • Automotive
  • Pharma

Projects:

  • Restructuring
  • Processes optimisation,
  • Transfer od production
  • Change management
  • Management of Investments

Main issues in a manufacturing plant during COVID-19 Crisis

Coronavirus and preparation for daily operation

  • Health and Safety of employees
  • New Crisis procedures
  • Re-training of employees
  • Maintaining social distance between employees
  • Remote work

People

  • Increased absenteesm
  • Change in the production flow
  • Lower productivity due to hygienic reasons
  • Headcount reduction

Production and Technical area

  • Productin planning
  • Components, raw materials, packaging supplies
  • Finished goods status
  • Availability of spare parts and maintenance services
  • Order status

Communication

  • Planning
  • Components, raw materials, packaging supplies
  • Finished goods status
  • Order status

Case studies

1. Time to be flexible

Source of the crisis:

Unexpected loss of 50% orders – for longer time

New situation in the plant:

  • Big factory with fixed costs

  • Large production team

  • Threat of financial liquidity loss

 Solution:

Adjusting plant costs to much smaller sales

  • Consideration of change to reduced time contracts (big risk)

  • Determining minimal number of operators to run all processes

  • Signifficant downsizing in headcount (30 – 40%, direct, indirect)

  • Open communication in plant – redundancy agreement in 2 days

Work organisation changes necessary after redundancy

  •  New work procedures – less people for the same process steps
  • Trainings of workers due to changed positions / work content
  • Some layout changes in workshop, e.g. 1 person runs 2 machines

  • Employee motivation revived – e.g. engaging them in the changes

  • Electricity saving routines, offal reduction, less rented forklifts…

  • Comunication, communication, communication…

2. Prepare for the impossible

Source of the crisis:

Raw material price increase

New situation in the plant:

  • Negative financial result

  • Sales prices were fixed for long term
  • Immediate threat of insolvency

 Specifics :

High dependency on manual labor

Solution :

Hire more employees and work slower

  • Factory Interim Manager & Quality Manager performed extreme slow yield tests
  • Precision of work was proved to be the key, not speed, as before
  • Further tests were run for full line brigades, but slower
  • All tests showed the potential to improve yield up to 10 % (it was a lot when ⅔ of plant costs was only material cost)
  • Decision after tests: employ more (!) workers for similar volume 
  • More people working slower – this made the plant profitable
  • Additional 5% of yield was gained in set-up precision project on automated processes

3. Use your full potential

Source of the crisis:

 Unexpected loss of 50% orders – for longer time

 Solution:

 Definition of a immediate survival plan

  • Detailed day to day forecast with the majority of existing clients
  • Rapid acquisition of new clients based on company’s core business, know how and technological capacity
  • Introduction of quick decision making and special procedures with all new offers (simplification, decrease in processing time)

 

4. Take advantage of the existing conditions

Source of the crisis:

Unusual order distribution during the year with idle machine time up to 30%.

Solution :

Full reorganization of the production process and rework of the factory layout

  • Downsizing in headcount by 20%
  • Increase in productivity of 38%
  • Reduction of lead time by 50%

Best practices from the crisis interim managers

Understand and acknowledge that you are in a crisis situation.

Declare „State of emergency” status

Set-up a crisis team with a clear leader

Define an action plan

Structure and document all anti-crisis activities

Develop and consider several scenarios

Set-up and monitor strictly KPI’s

Involve actively your suppliers, customers and employees

Communicate, communicate, communicate

  • Open minded leaders are needed to find new perspectives
  • The chosen solution migh be suprising (more employees, slower working routines)
  • Interim Managers bring out-of-the box, external view, that is crucial
  • Interim Managers have experienced many crisis situations and can handle the pressure
  • An interim manager leaves the company after his mission is fulfilled, thus does not endanger the permanent managers job security 

How do EIM Interim Managers generate value?

EIM Nurtured Community Members discussing the topic of Managing a Manufacturing Plant during crisis

We at EIM would be happy to support you by finding the right executive interim managers who, based on their diverse experience, can quickly take on the challenge and deliver rapid results. Thanks to our Nurtured Knowledge Community of reputable Executive Interim Managers, we can provide you with professionals who are experienced at very short notice and selected according to strict criteria.
With us, you can expect exciting, hands-on, and intensive international assignments, drive forward future innovations and provide your own ideas for the success of your projects.
We give our best when Clients need rapid solutions, transformation or out-performing results, anywhere in the world.

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