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FW Murphy Manufacturer of custom engineered oilfield products seeks to stabilize operations after multi-facility consolidation. Background: An international producer of custom engineered oilfield products had recently reorganized its company’s operations. Before the restructuring, the company’s products were manufactured at two different facilities, with many of the same products being manufactured at both locations. As part of the reorganization, the company consolidated its engineering and production operations into one location in Texas. The goal was to eliminate redundancy, capture economies of scale, and improve financial performance. Challenge: When operations were transferred to the Texas facility, the resulting dramatic increase in volume and product line put a strain on both the staff and production processes. With this increased volume came slower delivery times, lower productivity, and an overall sense of frustration from both management and employees. The General Manager in charge of the consolidation had previously been in sales with the company for many years. Because of his background, his tendency was to view problems from more of a customer satisfaction standpoint than an operational one. In order to successfully address the consolidation issues, he needed a clear, defined plan for improving both financial and operational performance. However, to be successful, he would have to shift his focus from daily crisis management to root cause problem solving. Strategy/Solution: The Plaid Group started with a complete operational assessment. This type of assessment typically focuses on core business processes, and includes one-on-one interviews with employees at all levels, vendors, and customers. We also review financial information, past consulting assessments, performance improvement efforts, reporting mechanisms, compensation and growth plans, and other organizational information. Through this approach we isolated several key problem areas and developed action plans to remedy those problems. The Plaid Group’s solution included a description of the current performance, practical solutions to known problems, action plans for solving the problems, and a simple approach for ongoing performance management. After reviewing The Plaid Group’s assessment, it became clear that many of the production issues were caused by mistakes early in the order fulfillment process. Because The Plaid Group simplified the General Manager’s view of the business by mapping the process – from initial call to final production – he could clearly see the big picture and quickly remove any roadblocks to success. Results: The resulting “performance report card” created a greater understanding of departmental and process interdependencies. Our analysis gave the management team context and perspective for managing and improving the performance of the business. It also established a benchmark for current performance and helped them create an ongoing feedback system to monitor progress. These tools helped the General Manager and his management team gain the ability to take a holistic view of the company, appreciate the cross-functional nature of the business, and thoroughly grasp departmental dependencies. This newfound knowledge translated into a leaner company and increased profits. Additionally, when the economy slowed and demand for the company’s products dropped, the General Manager now knew where to trim back strategically without sacrificing operational performance. Testimonial from Jack Maley - Vice President, Operations, FW Murphy Inc. |
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