Stagnant supply chains – a global problem

How do production sites stay competitive? Best practices and benchmarking help

Now that the lockdowns in the Corona pandemic seem to be over and many companies are resuming regular operations, material shortages and cost increases due to faltering supply chains are now occurring in numerous industries. Companies that mitigated identified bottlenecks and supply risks during the height of the Corona crisis by optimizing their supply chains and processes are now well positioned. Where this has not yet happened, the latest news about supply problems from important markets can be a reason to now review supply capabilities in terms of their competitiveness. Our project example of an internal benchmark analysis in an internationally active group of companies in the metal processing industry shows how they can identify weak points and tap optimization potential.

With approximately 30 locations in Europe, Asia and North America, our client is a global parts manufacturer in the metal processing sector. In addition to the automotive industry (OEMs and suppliers), the company’s customers include well-known manufacturers in the electronics sector as well as manufacturers of e-bikes in the premium segment.

Benchmarks – an important tool for optimizing production sites

Identifying best practices and establishing them is not always as easy as the general approach suggests. If there is already often room for interpretation in the case of common company key figures, e.g. the reject rate (different manufacturing processes, different site conditions), it sometimes becomes even more controversial in the case of a comparative evaluation of processes and procedures, e.g. production control. Often, these efforts already fail simply due to a lack of resources and know-how for establishing comparability, execution and evaluation of a benchmark process.

In our example, seven international company sites were selected for an internal benchmark. Participating countries were Mexico, China, USA, Italy, Germany and Austria. HMC Hanse Management Consulting GmbH, with two consultants highly experienced in the field of operations, provided the team for the client’s German and Austrian sites. Internationally, the other locations were managed by the respective country offices from the Grant Thornton network.

Project example:

Analysis and evaluation of the processes and procedures in the area of supply chain management were carried out within a few days.

In each benchmark project, our approach is tailored precisely to the company in question, so that specific factors, such as market- or product-induced factors, are taken into account accordingly.

In this case, the first step was a detailed analysis of the most important main and auxiliary processes along the value chain. For this purpose, the respective processes were broken down into individual process steps and then evaluated in detail on the basis of previously defined criteria. Depending on the measurability, an evaluation was carried out on the basis of the process duration, the process costs, the number of work steps included and other individual factors.

Figure: Exemplary representation of main and auxiliary processes

Our client was then able to draw a comparison to the other production sites based on the evaluation of the processes and identify best practices within the group. For processes that were unique within the group due to site specifics, a comparison was made to similar processes outside the group.

Here Hanse Consulting, due to an extensive project database and the in-house research team, supports the company quickly and competently in case of very specific questions.


Local best practices are implemented globally

At the end of the project, the findings and results of the international teams were compiled into a global optimization roadmap, in which the local best practices served as a model for the entire group of companies.

Currently, the company is already in the implementation phase of the most important measures.

In view of the current market developments, this is exactly the right time, because especially now, when supply chains are faltering and freight rates are skyrocketing, optimal processes, flexibility and agility are more crucial than ever for business success.

On the subject of process optimization, benchmark analysis and supply chains, the HANSE Consulting contact persons Dr. Thomas Zubke-von Thünen and Dr. Marcus Engels will be happy to assist you.