Transforming Operations for an Automotive Leader

The client, an international manufacturer in the automotive sector, specializes in development, processing, and production of aluminum profile components. Known for its high-quality experience in the industry and innovative solutions, the client plays a crucial role in the automotive supply chain.

The client faced several significant operational challenges. Foremost among these were capacity bottlenecks in both production and logistics, which led to considerable inefficiencies and delays. This was compounded by a high order backlog and a low OTIF (on time in full) performance of just 50%, severely impacting customer satisfaction and service levels. Additionally, procurement processes were decoupled from production performance, resulting in elevated inventories and recurring quality problems. The organization was divided in silos, with a lack of responsibility and collaboration between departments. Further exacerbating these issues was a lack of transparency in the supply chain, which hindered effective decision-making and overall performance.

The first step was the rapid development and implementation of an emergency Sales & Operations Planning (S&OP) process, along with the necessary planning tools. Additionally, a data-driven approach was adopted, with the introduction of key performance indicators (KPIs) to facilitate informed decision-making. The procurement processes were overhauled to adopt a demand-oriented approach, to reduce excess stock, and to align inventory levels with customer needs and production performance. Moreover, with the participation of all key stakeholders in a regular S&OP cycle, the existing silos were broken down and the organizational structure was transitioned into a process-oriented model.

A key achievement was the quick establishment of a One Plan approach between sales and operations, which significantly enhanced capacity management and aligned objectives across the organization already in one month. The shift from functional to process orientation gave a strong impetus for improved collaboration and accountability, leading to more efficient operations. Enhanced transparency in the supply chain provided better visibility into performance metrics, enabling timely and informed decision-making. The transition to demand-oriented procurement resulted in a reduction of stock levels by over 20%, freeing up valuable working capital. Most notably, the OTIF performance improved dramatically, rising to over 80%, yet significantly reducing the order backlog and enhancing customer satisfaction.

By addressing the core issues within their operations and fostering a culture of continuous improvement, the client not only overcame their immediate challenges but also positioned themselves for sustained growth and competitiveness in the automotive sector.