INDUSTRY: AUTOMOTIVE

SERVICES: Logistics; project  management; 

Situation.

An Automotive Just in Sequence plant was struggling with capacity constraints and quality issues producing seats as the OEM launched two new programs causing the production model to change from a two-shift to a three-shift model. Material was not arriving to the plant or line as required, assembly operations were not able to keep up with customer demand and quality was at an unacceptable level. The plant and processes had not been designed to support a multiple seat platform three-shift operation, but the sales team accepted the added business during a downturn.

The operations team was not able to adjust or implement robust processes and procedures before the third shift started.

 

Approach.

Seraph was engaged by the OEM, and retained by the Tier 1 Supplier to identify supply constraints, break bottle necks and implement simple processes and procedures to eliminate the customer production line downtime. Our initial assessment was limited to the supply chain and flow of material to the line, which is where the supplier and OEM believed the problem existed. Seraph analyzed the constraints and helped all see that once the initial material bottlenecks were removed and material supply to the plant was stabilized, the assembly lines themselves were not capable of running at the required production rate.

Seraph identified production constraints and developed an improvement plan which allowed the team to move forward in a coordinated manner to achieve the targets.

 

Following the Seraph plan and implementing sound logistics and manufacturing processes and procedures, training people and providing clear leadership a rapid turn around was executed.

 

Result.

Seraph led the stabilization of the client’s operations and enabled them to move from producing 450 seats/day to over 750 seats/day in less than three months. Triage actions stopped seats from shutting down the OEM lines and bought the team time to stabilize the operation. The operation set production records and achieved a three-week period where there was zero impact to the OEM, which set the benchmark for the plant to surpass in the next year.

Project ROI is expected within 18 months.

Industry: Automotive

Services: Project management; Logistics; PROJECT LAUNCH

 

Situation

A large tier-1 roof supplier opened a facility during the start of the pandemic. However, during the pandemic, the supplier suffered significant setbacks in product design, process engineering, and overall manufacturing capacity. Those challenges immediately placed the facility under a capacity constraint whereby Original Equipment Manufacturer (OEM) target volumes could not be met.

In response, the supplier opted to launch a new facility to alleviate capacity issues and meet contract volumes. However, since most of the suppliers’ resources were committed to the recovery and stabilization of the initial facility, they sought Seraph’s support to successfully launch the new installation.

Seraph was hired specifically to ensure the second plant was operationally positioned in all functional areas for a successful launch.

Approach

Seraph deployed its “Seraph Launch Strategy”, which consists of five main categories: Production, Logistics, Quality, Engineering, and Human Resources, to ensure the proper focus and detailed planning required.

The entire project was managed by a Senior Engagement Manager and each respective functional area was managed by a Senior Level Consultant. In addition, Seraph selectively partnered with a proven recruitment/staffing company to ensure expert support and mitigate the effects that a tight job market has on a launch.

Lastly, at project kickoff, a baseline assessment of critical risk factors was conducted to ensure detailed strategies addressed all risk areas to ensure the facility’s success.

Overall Results

Seraph successfully hired and onboarded an entire leadership team and supported the hiring and onboarding of the next two tiers of management. In addition, the transition of the client’s systems, processes, and procedures was successfully achieved, thanks to the development of the structure, the operational processes, and the identification of the necessary resources to launch the new plant facility. This allowed us to create a culture of discipline and mindset around data, standards, and overall process approach.

Seraph ramped up both hourly and salary team aggressively – met the demand.

 

Human Resources

Accomplishments Seraph team streamlined a complicated hiring process and created a robust tracking tool complemented with visual KPIs. Additionally, a supplemental robust training and onboarding strategy was developed, both to maximize the client’s process and to capitalize on the knowledge of existing plant processes.

Job evaluations were also designed and executed to ensure geographic locations (and travel time) to balance staff between the initial plant and the new plant facility. And a hiring ramp plan for all departments -including all required hires- was developed and deployed.

Production Accomplishments

The Seraph team provided a detailed assessment of the organizational structure both at the salaried level and the direct level, which resulted in better communication, overall effectiveness, and enhanced accountability. The recommendations provided from this assessment allowed the client to restructure and ultimately reduce its total headcount by over 30%.

Filtered and interviewed candidates down to the supervisor level were conducted by Seraph, in addition to fully staffing a production team on time and on budget. Additionally, Seraph managed workshops with cross-functional and cross-plant teams to ensure that each lesson learned from the initial plant/operation was captured and considered. The outcome of the workshop was a comprehensive tracking mechanism to prioritize all selected actions to address all lessons learned.

All standards were identified for all processes, to evaluate the effectiveness and make the necessary improvements for the transition to the new plant. Seraph completed its initial evaluation and identified targets for all elements relevant to the launch of the new plant based on the client’s production system.

Additionally, Seraph developed a tracking tool to assess progress and generate action where required and supported the development and implementation of launch boards with relevant and targeted KPIs specific to the new plant.

Supply Chain Management Accomplishments

Seraph supported the design of the plant layout to optimize material flow and resources, including current and future needs in the final plan. To achieve this, a detailed PFEP (Plan for Each Part) was created, with clearly defined system parameters and interdependent with the plant design. In addition, the warehouse layout and detailed storage requirements were designed with the speed and flow of all material movement throughout the process. Seraph worked with the client to define a detailed transition between plants to optimize the launch of the new facility and protect customer demand.

Additionally, Seraph supported the tracking and delivery of the equipment. All warehouse and equipment needs were identified and sourced, and work instructions were also developed for all required logistics processes to ensure standardization in training and robust onboarding of all employees to be transferred to the new plant management.

Seraph further developed a planning tool that allowed for key variable inputs (volume, cycle time, OLE, shift patterns, and yield) to properly model multiple scenarios, and easily generate a required sensitivity analysis. The tool also allowed for ease of movement between equipment to ensure balance could be properly evaluated.

Finally, Seraph supported a local team with SAP expertise for MRP setup and developed shop floor processes aligned with SAP processes and transactions. A robust plan to ensure proper capture of scrap within the SAP system was also designed.

 

Quality Accomplishments

Seraph initiated quality support by developing a detailed list of required equipment and timelines, resulting in a seven-phase implementation tracking tool that provided clarity around delivery goals and insights for escalation. An evaluation of the initial plant’s gauge strategy was executed, as well as an evaluation of its effectiveness and recommendations for improvement. In the assessment, Seraph identified increasing accountability and a sense of urgency throughout the decision-making process as a priority.

In addition, Seraph supported the implementation and ensured that the client’s quality systems were included in the master timeline. KPIs associated with the initial plant performance were created to allow a clear understanding of the main issues affecting overall part quality. Seraph ensured that major issues were properly prioritized, and actions assigned to understand or address root causes.

Example actions include:

1. Created and implemented an APQP task dashboard to track open items to closure for APQP compliance.
2. PFMEA KPI Tracking developed, cross-functional team by value stream defined, and meeting cadence established with internal Client Teams and OEM to drive risk lower.
3. Supported reverse PFMEA process to properly assess each control for compliance to PFMEA and control plan. Seraph led efforts to accurately communicate the gaps and drive decisions and/or resolution of all violations.
4. PFMEA and RPNs analyzed for integrity, robustness, accuracy, completeness, and relevance. Subsequently, RPNs were re-calculated and action plans were developed to reduce the overall risk for the project.

Additionally, Seraph drove alignment of all documents, including drawings, customer specifications, PFMEA, control plan, and incoming inspection.

 

Engineering/Maintenance Accomplishments

Seraph started by setting up a Technical Program Manager (TPM) and Project Management (PM) process. The process to map out the PM requirements allowed the strategy and plans to be set up in a structured and effective way in SAP. The functional location and PM task was established according to the individual manufacturing process department and taking into account each piece of equipment. In addition, Seraph ensured that work instructions and training processes were developed to enable the Manufacturing Execution System (MES) to be used successfully in the new plant.

Additionally, Seraph provided additional visibility into internal and external equipment-related processes by mapping out maintenance processes, along with workflows for spare management, MOR control, cycle counts, and maintenance work order systems. This allowed for achieving structured and consistent processes in the maintenance area, as well as ease in handling work instructions.

A capital tracker was implemented to empower management with the ability to view and understand capital spending versus budget for all process areas. In addition, to designing a clear and concise manufacturing IT system for material flow mapping, which was shared with the management of the new plant.

Finally, a precise monitoring system and order management for spare parts and Maintenance, Repair, and Operations (MRO) – approximately 2,600 items – was carried out for the final launch of the new plant.

Industry: Automotive

Services: Project Management; Logistics; 

Situation.

An Automotive Lighting Supplier had oversold machine capacity and had contractual commitments to multiple OEMs requiring them to produce significantly more volume than they had demonstrated capacity.

Injection molding, metalizing, assembly, and maintenance were all identified by the supplier as constraints.

Planning and scheduling machine time had become reactive and OEMs were being impacted by the lack of supplier capacity. Premium freight costs and line stoppage charges were mounting and it was clear that action needed to be taken quickly. Seraph suspected that an unpredictable and high scrap rate was also contributing to the situation, although the Supplier did not believe they had an issue with scrap.

Approach.

Seraph was engaged by the Supplier to identify constraints, break bottlenecks and implement simple processes and procedures to enable the supplier to put the required inventory back into their warehouse to eliminate both the customer production line downtime and premium freight. The initial constraint analysis highlighted multiple points in each process where non-productive activities were delaying the process and consuming critical machine capacity.

 

Seraph was also able to show that scrap rates both from injection molding and metalizing were high consuming critical machine capacity.

Once the constraint analysis was completed, Seraph led the client team through the development and implementation of a clear plan to drive improvement and produce results. Seraph assisted the client in identifying the required inventory levels for each product and changing the size of the batches being produced. The team secured scarce outsourced injection molding capacity at a cost equivalent to that of internal production and expedited PPAP of the parts. Outside process engineers. PLC programmers and tool makers were also engaged on a short-term basis to improve machine performance and reduce scrap. Finally, WIP was adjusted to allow batch production and reduced change-over time in the constrained processes of injection molding and metalizing.

Result.

Seraph led the improvement of the production process, eliminating charters in three weeks. A stable production process was achieved in thirteen weeks and the supplier was able to continue to meet OEM demand, and even sell some “additional” capacity at a premium when requested by one of their customers. Demonstrated capacity increased by more than 16% without additional capital investment in the plant.

 

Project ROI was achieved within the fiscal year.

INDUSTRY: Automotive

SERVICES: Logistics; Rapid Health Assessment; Logistics

 

Executive Summary

Suppliers across all industries today are faced with challenges unlike most of us have seen in our professional careers. Any one of the issues facing the supply base would be challenging alone. But today we see many of these challenges facing suppliers simultaneously: labor shortages, supply chain disruptions, inflation, and the ongoing COVID pandemic. These issues are making it difficult for suppliers to run a healthy and profitable business.

Seraph was contacted by a Tier 1 supplier to the heavy-duty trucking industry to provide coaching and direction to the front-line leadership team at their largest production facility. When the team arrived and conducted the initial assessment, the gaps identified were much more significant than originally communicated. From these findings, it was determined that a more extensive engagement by Seraph, including a larger team and application of our crisis management and turnaround methodology.

Project Dates: July 2021-January 2022

With alignment between client leadership, Seraph developed a plan to focus on 5 key areas:

• Production Planning
• Warehouse and Logistics Processes
• Molding OEE Performance
• Production Execution
• Leadership Practices and Employee Engagement

Individual work packages were created with input from key leadership from the client. Work packages included a set of deliverables and resources aligned with the client leaders. Each work package was supported by a lead from the customer organization and a Seraph consultant.

“We first had to work together with the client to demonstrate using data that what they believed to be their biggest bottleneck was, in fact, not their real problem. It only appeared to be that due to the way they were planning and executing their production schedule.” – Jay Butler Managing Director, Seraph

Accomplishments

• 61% Reduction: Reduction of past dues for the clients’ 5 largest customers
• Improved Weekly OEE: Creating a more stable performance
• 100% Positive Increase: In the average daily production of finished goods by providing a more stable flow of daily production
• +$2.7 Million Return: total recoup of lost sales increase within 4 months

Approach

The Seraph team implemented our standard crisis management methodology beginning with the Understand phase, followed by the Improve, and Sustain phases:

The Understand portion focused on a complete assessment of the operational aspects of the facility. This includes: financial health, production capacity, control, and management, warehousing and logistics processes, and lastly customer support.

The Stabilize phase is an immediate triage of those aspects that can be improved quickly through a rigorous execution of those action plans. This phase includes the following: production floor discipline, standard work, warehouse organization, planning and scheduling processes, staffing, floor leadership coaching, and mentoring.

The Sustain phase focused primarily on the disciplined application of measures taken during the Stabilize phase, along with continuous improvement activities around work floor optimization and cell layouts, and organization of WIP locations in the assembly area. For this project, there was a specific focus on the improvement of past dues, maintaining daily meetings, production reports, parts tracking/reporting, and ongoing customer communication.

Onsite Details

It was apparent that production within the facility was inconsistent. Excessive mold changes and downtime were negatively impacting molding performance. OEE was running at much lower rates than target and the plant struggled to meet molding requirements without operating 7 days per week.

The operations span across 3 local facilities complicated material flow to the plant, resulting in additional downtime occurrences that impacted both molding and assembly production. Production was also complicated because of multiple customer hot lists feeding into the production planning process without a consolidated process. This resulted in confusion and missed customer requirements. Finally, the warehouse was unorganized with an accumulation of past-due materials that needed to be shipped, stacked throughout. The lack of organization resulted in lost and missing material, increased shipment staging times, and disruption of production to remake lost and missing materials.

Production was also complicated because of multiple customer hot lists feeding into the production planning process without a consolidated process.

Implementation

Seraph implemented full crisis management strategy after further evaluation once arriving. In order to foster a healthier Leadership-Employee communication relationship, Seraph instituted Leader Standard Work for Supervisors and Lead Ops, as well as introduced bi-hourly production reporting, two production meetings per day, shift handover meetings, reorganized daily accountability meetings, and established daily “move the needle” meetings. Due to the lack of customer communication, Seraph also provided oversight on daily customer calls to ensure better communication was being given to the client’s major buyers. Discipline was improved.

One of the major shortfalls for the client was how high their past-due numbers were. Seraph’s goal was to consistently lower the number of past dues weekly to better satisfy the client’s customer base. Seraph stabilized production planning processes, implemented standard plant performance reporting metrics, re-established hourly boards on the production floor, reorganized the assembly and WIP paint areas, implemented Standard Reporting for Service Past Dues by customer, as well as provided complete and updated PFEP (plan for every part), and recommended manufacturing footprint.

“Working together with the client, we demonstrated their ability to produce far beyond what they thought possible. In fact, working together we were outproducing their most recent performance with less equipment. It required teaching them to step back and look that the self-inflicted pain they were causing themselves, create a plan, and then work that plan.” – Jay Butler Managing Director, Seraph

Conclusion

This project was extremely challenging due to a number of issues on site. The Seraph team worked overtime to increase productivity, make changes to warehouse management, and aid in fixing financial instability. The Seraph team was able to accomplish several of the goals such as OEE, past due recovery, and creating stable customer communication and parts tracking.

Industry: Automotive

Services: Crisis Management; Strategy; Project Management

Executive Summary

Seraph was invited to provide operational support and recovery of an automotive facility in Michigan, US. The client was having issues with production and output requirements for their customers, in addition to preparing for a huge OEM launch of rooftop components. The facility was operating with one 8-hour shift each day with an expected output of 230 sunroof vehicle sets per shift. Their output was averaging 52% of the required production, with an average output of 120 parts per shift. They had planned to increase capacity and add two additional shifts to increase their production. This drastic increase wreaked havoc on their staff, leadership, and organization.

With alignment between client leadership, Seraph developed a plan to focus on 3 key areas:

• Plant Leadership and Operational Management

• Quality and Logistics/Technical Support

• Production Data Monitoring and Operational Fundamentals

Individual work packages were created with input from key leadership from the client. Work packages included a set of deliverables and resources aligned with the client leaders. Each work package was supported by a lead from the customer organization and a Seraph consultant.

Project Dates: May 2021 – August 2021

Approach

The Seraph team implemented our standard crisis management methodology beginning with the understand phase, followed by the improve, and sustain phases:

The understand portion focused on a complete assessment of the operational aspects of the facility: production capacity, control and management, logistics processes, customer relationships, and specific roles in operational leadership.

The stabilize phase focused on working with the client’s leadership and steering committee to manage the overall production as the client prepared for a major OEM ramp-up. The plan was to add 2 additional shifts along with the required manpower and staffing to support them. Additionally, monitoring jobs per hour (JPH) and use ProductionNet software to track downtime, defects, and performance.

The sustain phase focused primarily on the disciplined application of measures taken during the stabilize phase, along with the continuous improvement activities around work floor optimization and ensuring that “good parts” are being produced while reducing production downtime.

Accomplishments

• 30% Positive Increase: Seraph concluded the project with a 72%+ OEE, a 30% increase
• 85% Decrease: Successfully reduced noise defects by 85% during production, a drastic improvement
• 50% positive increase: Increased jobs per hour by 50%
• 50% reduction: down time reduced by 50%

 

Implementation

Prior to Seraph’s engagement, the facility operated with one 8-hour shift (7 effective hours) each day with an expected output of 230 sunroof vehicle sets per shift. Current output was averaging only 52% of the required production, with an average output of 120 parts per shift. Over the first six weeks, the facility was expected to have increased capacity to produce 600 vehicle sets on 3 shifts, adding two additional shifts to support this objective.

The glide path to 600 was poorly defined, and such an increase had drastic effects on staffing, leadership, and organization across the facility. The Seraph team continued to drive the progress made and ensure local leadership was equipped with the tools and knowledge to manage the extra two shifts and production requirements effectively.

The team implemented shift carry-over for supervisors, as well as the 5S clean-up plan to better enable the client’s organization for production. Production oversight was the focus of the Seraph team due to downtime issues, and quality control. In week 14, ProductionNet and the team were able to monitor assembly performance, quality control, and equipment. The client started with 43% OEE, assembly started at 50% OEE, and the frame side started at 56% OEE.

ProductionNet identified that assembly performance was the main contributor to overall performance, and neither quality nor equipment was hindering production performance. The Seraph team was able to closely monitor production and enabled it to increase OEE by 30%, going from 300 to 630 pieces per day. Seraph also enabled JPH to improve by over 50% in just nine weeks.

Conclusion

In conclusion, Seraph accomplished a significant amount in just nine weeks with the client. With an overall OEE increase of 30%, Seraph was able to increase jobs per hour by 50%. This is a remarkable “good parts” increase for the client. Seraph’s implementation strategy was precise and created an overall better work environment for both the leadership and employees.

INDUSTRY: Automotive

SERVICES: Restructuring and Turnaround; Logistics, Crisis Management 

 

Seraph was invited to execute an operational improvement and recovery project for a Tier 1 automotive company. While the issues at hand were quite vast, working with Seraph allowed them to implement a detailed strategy to create double OEE (Overall Equipment Efficiency).

THE PROBLEM

While preparing for the launch of a flagship Original Equipment Manufacturer (OEM) vehicle, the tier 1 supplier fell short of meeting the targeted quality and production requirements. Their 8-hour workdays, on average produce 300 pcs, which was 52% of the production rate required by the OEM. Prior to working with Seraph, the facility added two additional shifts to increase production to meet the demand, but lacked a proper implementation plan, putting the staff, leadership, and the entire organization under extreme stress, as there was risk of shutting down the OEM costing the Tier 1 millions of dollars.

HOW SERAPH HELPED

By utilizing Seraph’s Crisis Management Methodology, a project timeline and execution plan was developed spanning from May  – August 2021. 

This plan focused on three key areas:

1. Plant leadership and operational management
2. Quality and logistics/technical support
3. Monitoring production data with the implementation of operational fundamentals to increase OEE

Seraph quickly then implemented its MDI process (Managing Daily Improvements), which include implementing and tracking:

• Standard shift handovers for supervisors
• Leader standard work and cadence
• Fast response to production issues
• Optimized manning
• Development of standardized processes

The Seraph team also incorporated ProductionNet into the workflow, which tracked Key Process Indicators (KPI’s) related to OEE, identifying the main contributors to underperformance and provided pareto charts of the highest contributing factors of downtime and defects. With this real time live data, the team was able to have a focused and structured approach to resolving assembly concerns.

FROM INCREASED PERFORMANCE TO PRODUCTION NUMBERS SLIDING BACKGROUNDS

Within one month, the manufacturing plant was able to increase production by 200 pcs, bringing their capacity to 500. The client was elated with the progress and felt things had returned to being stable, and Seraph’s involvement was no longer needed.

It was in Seraph’s view, that change had only been impacted for a one month time period, and it was too soon to change course. The facility was not stable yet. The manufacturing plant quickly took a turn for the worse, dropping to 200 pcs, which was the lower level since the project was initiated. Once the Seraph team was back involved, production steadily increased to achieve a staggering 1200 pcs.

RESULTS

Seraph achieved significant progress with our client in just nine weeks:

• 72.44% OEE (31% increase from project start)
• 85% improvement in quality
• 50% reduction in downtime
• 50% increase in jobs per hour
• Long-term sustainable processes
• Rapid return on investment (ROI)
• Increased customer satisfaction

 

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INDUSTRY: Medical Devices

SERVICES: Restructuring; Rapid health assessment; strategy

 

THE SITUATION

Seraph was engaged by a private equity-owned Tier 1 medical device manufacturer in the final stages of preparation for a sale. The client asked Seraph to evaluate the Manufacturing Footprint and develop optimization possibilities, with an initial hypothesis that two plants could be closed. It was clear that the manufacturing footprint was suboptimal, asset utilization was low, and ongoing infrastructure costs were high.

Seraph was asked to examine the operational footprint, understand and quantify asset utilization across the network, and make recommendations on improvements. We were also asked to help evaluate the establishment of a low-cost country strategy for a future manufacturing footprint. We agreed with the client that two plants would need to be removed from the manufacturing network, and these plants were targeted for a deep dive based on clear data.

THE APPROACH

In order to collect data while minimizing disruption of supply to customers and avoiding unrest within the workforce, a cover story was required. A cover story is commonly used to allow required data to be collected without divulging the closure analysis. Specific members of the client’s organization were read into the program and provided full information access. This expedites the timing and provides a sanity check from within the operating business.

01 OPTIMIZATION ASSESSMENT AND STRATEGIC OPTION DEVELOPMENT:

The team started by collecting data to determine the equipment and process capacity and capability at each plant in the network to develop accurate manufacturing matrices. Data collection was followed by a review and confirmation of plant layouts. The plant layout analysis confirmed the location of capital equipment on the production floor and identified potential space for equipment transfers to support the potential product moves. Not all plants were visited; some were reached with phone and video interviews.

The second phase of the project enabled the team to highlight areas where risks were exceptionally high: for example, where a business continuity event would prevent delivery from another plant. As part of this effort, risks were identified and quantified. It also enabled Seraph to identify key employees, tribal knowledge, customer concerns, and other areas that required additional attention.

This initial engagement resulted in a network rationalization strategy that improved business continuity preparedness, highlighted the excess capacity in the system, and set a clear path forward. Of specific note were the following findings:

• Plant utilization was less than 70% across the six targeted plants with the three worst-performing plants being exceptionally underutilized.

• Sales overall were falling, which impacted profitability over the forecast period. (After the project we learned that the OEMs were executing an inventory reduction strategy.)

• Process flow charts (master routers) were developed for more than 30K Active SKUs, enabling the development of product transfer strategies based on machine work center capabilities/capacity.

• Sixteen potential single points of failure in the manufacturing network were identified during the course of the analysis.

• Three previously unknown machining center capacity issues were identified.

• A third plant was identified for closure based on poor utilization and available capacity within the manufacturing network.

 STRATEGIC ALIGNMENT AND MANAGEMENT PLAN

Based on the initial analysis, it was clear that plants should be removed from the client’s existing manufacturing network in multiple regions. The next phase of the project was to secure Strategic Alignment and complete the Management Plan. These initiatives deal with the development of closure plans, transfer of equipment, bank builds, OEM validation assumptions, and benefits analysis. The team agreed that a closure announcement would only be made if a final board decision was taken to close a plant. This approach enabled our client to avoid the disclosure requirements associated with the WARN Act before suitable action and contingency plans were in place.

THE MANAGEMENT PLAN HAS FIVE PRIMARY FUNCTIONS:

1. Create a common view of the project and serve as a guideline for its execution – overall timeline, milestones, deliverables, project charters for each product, and process work stream.

2. Describe an agreed-upon project rational strategy and overall concept, as well as project structure, processes, and controls required for successful delivery – bank build requirements, equipment transfers, and project resources.

3. Establish the foundation for the project appropriation required for ongoing project management – overall budget for the transfers and closure.

4. Enable the development of communication plans – internal and external communication plans.

5. Be the baseline for strategic alignment with the executive team and all stakeholders.

Seraph understands the importance of developing Strategic Alignment as well as developing a clear and agreedupon Management Plan. This approach has proven successful when executing strategic and tactical projects. Products, people, functions, technology, controls, and the organization structure itself are all incorporated into the Management Plan. Often clients have a target that they hope to meet without the necessary resources, data, or planning to support it. The Seraph Management Plan is always as much about the planning process and engaging the core team as it is about the document itself. The entire process allows clients to move forward in a confident, unified, and coordinated manner. Over the course of hundreds of line moves utilizing this approach, Seraph has never caused an OEM line stoppage or incurred a customer-imposed fine as a result of transfer activities. The lessons learned in these many transfers are continually built into this process and have shown themselves to be robust and effective in protecting our clients and their customers.

Seraph used the Management Plan to execute the project, establishing a PMO to control the effort and leveraging this structure to hold the client team accountable for the results while enabling them to experience success. Approximately $10M in operational cost savings were identified related to the closures. Product and process transfer strategies were developed with bank build requirements for the two USA sending sites and six receiving sites. Customer approval strategies were developed with product family-level requirements. Formal communication plans were developed to be executed with the announcement of the closures.

LESSONS LEARNED AND CHALLENGES

For future medical device transfers, Seraph will have the core team take charge of the validation negotiations rather than deferring to the sales team. The sales team aligned with quality, however, they underestimated the customer requirements for the transfer/approval process of the product families from the sending sites. Having this managed by the core team would have allowed both a clear escalation to sales and an ability to be more pragmatic in the initial approach to each customer’s products.

Competing initiatives need to be vetted thoroughly with respect to product family lifecycle and capital investment requirements. Transfer plans were developed with new capital investment planned at one of the receiving sites. In the end, the OEM decided to make the investment in one of its facilities and this impacted the closure of one of the sending sites. The project was delayed when sending site was subsequently required to stay open until the OEM qualified and approved the new manufacturing line. However, a significant price increase was put in place during this extension, which more than compensated for the delay.

CHALLENGES INCLUDED:

• Customer validation requirements being more complex than planned

• Estimated order volumes for the following two years

• Customer-driven stock levels increase beyond bank builds levels, resulting in unplanned volume increases

• Unwillingness by plant management to add shifts at a receiving plant

• Executive changes during the course of the project

THE RESULT

Value was quickly realized within the same fiscal year that the project was kicked off. Seraph took overall project management responsibility for the implementation from start to project completion. We were also directly involved in managing the launch of production into existing sites. This included working closely with the client’s corporate and plant management teams to drive results including:

• Leveraging the PMO to track KPIs and drive value

• Developing and controlling the internal and customer communication strategies

• Implement transfer and documentation checklists for transfers across all the sites

• Packaging and presenting key issues, decisions, and risks to the steering committee and driving actions for resolution

• Providing the necessary drive and motivation to the project team during the implementation

• Being a neutral voice in customer meetings to provide transparency

COMPLETION OF SALE

At the end of the first phase of the engagement, the sale process accelerated. The work done by Seraph contributed to the Seller achieving a higher multiple based on a clear strategy and path to lower infrastructure costs while growing the top line and improving EBITDA.

ROI AND OPERATIONAL COST SAVINGS

By the end of the project, Seraph had delivered more than the forecast $10M in operational cost savings with total project cost payback achieved in less than 18 months. Client and OEM customers viewed the project as a success and as a result customer orders continued to increase. OEMs who were initially concerned by the poor performance of a competitor’s move, were satisfied with the controls and transparency that Seraph brought to the project. Top line growth was an unexpected side effect of the improved communication, performance over the course of the project, and deepened customer relationships.

POST IMPLEMENTATION EFFICIENCIES

After the deal was completed, Seraph was re-engaged to refresh and execute the strategy that had been developed. The end result was the removal of three plants from the manufacturing network, with all production transferred to under-utilized plants. Plants where demand had been lagging experienced order backlogs as a result of customer confidence and orders increasing over the course of the project. Seraph enabled clear and deliberate communication with the OEM customers to smoothly manage the new backlogs.