Contico Europe Holdings Case Study SGetting the most from what they had ubtitle

by Phil Robinson (BPIC) - Comments to : phil@bpic.co.uk
URL : http://www.bpic.co.uk

Jargon Warning If this case study uses terms with which you are unfamiliar, you can look them up in the Jargon Buster at http://www.bpic.co.uk/jargon.htm. For more details see Business Excellence (ISBN 0-952-8885-05) by Phil Robinson.

Contico is an American based company manufacturing plastic storage boxes, toolboxes and sprayers. Contico also distribute janitorial products. They have a manufacturing and distribution operation in Redruth in Cornwall employing about 150 people. Many of their products can be seen in Do-it-all, Wickes and other stores. 

Contico installed Uniman planning software and, as one of the bigger users of this software, were able to influence its development. They also installed Preactor, a finite scheduler package and the forecasting package Demand Solutions to encompass total manufacturing visibility

In mid 1996 Contico realised they had to dramatically improve their customer service levels. They were conscious that they had purchased and installed planning software that they were pleased with but it had not produced the results they were hoping for. On 4th. October 1996, after some preliminary meetings and attendance at MRP Ltd. courses, Contico launched a business performance improvement project that they called "Committed to Excellence" with a public announcement to all employees by Doug Farrar who was the Managing Director at that time.

One of the early decisions they made was the appointment of David Bratt, Assistant Financial Controller, as full time project leader. The structure of the project was a steering committee of the senior team with 8 task forces reporting directly to the steering committee as follows. · Sales and Operations Planning · Master Production Scheduling · Performance Measures · Data Integrity · Education and Training · Purchasing · Manufacturing · Systems.

There was no project team, the responsibility for co-ordinating the project was to be undertaken by the steering committee comprising the Managing Director and the other senior managers. The task force members were assigned and a training plan drawn. The objective of the training plan was to make sure that at least 2 people on each Task Force were familiar with current best practice in manufacturing planning and control by attending either the 2 day Top Management Seminar or the 5 day Business Excellence Fundamentals course run by MRP Ltd., as appropriate. In addition, selected members were sent on specialist courses and there were 1 day overview presentations for another 50 key employees.

To tailor the Business Excellence principles to Contico, they appointed Phil Robinson of MRP Ltd. as Lead Consultant and Norman B Lees as Associate Consultant

The project set off with a high level of optimism and enthusiasm. The task forces all drew up agendas and weekly meetings started.

As usual, the first few weeks highlighted more "opportunities for improvement" than solutions. The injection moulders run 24 hours with production being stored away in their large stores. The inventory movement paperwork catches up some time during the day so it was hard to check the stock record accuracy. In addition, Contico had not got the 3 software packages communicating with each other and some functionality was missing such as forecast consumption and an available to promise figure.

Looking back on the project, Alan Elkins, their Financial Controller, felt their biggest mistake was to seriously underestimate the amount of resource needed to support their ambitious project. The Steering Committee just did not have the time to co-ordinate the project properly and carry out their normal roles at the same time. In addition, not only did the project highlight many key problem areas but also a huge number of other problems which they were trying to tackle at the same time. The net result was that the operational overload caused a deterioration in customer service in some areas which was probably a factor in the decision to re-organise the UK operation.

During the organisational changes the Committed to Excellence project was put on hold. Once the dust had settled most of the improvement initiatives were completed just because the education programme made everyone realise how necessary they were to the operation.

"Business Excellence has become a way of life for us now" comments Phil Macey, now Business Manager for the Janitorial and Sprayers division. Phil believes they are using the software tools so much better now because they know not only what they are doing but why they are doing it.

"There is still a problem with data accuracy" comments Alan, "but we know we have to tackle it". They have undoubtedly been successful in improving the data recording disciplines and will shortly be implementing a bar code system to speed up the recording of material movement.

The main lesson to learn from Contico's improvement project is the need to tailor an improvement project to the resources you are prepared to commit to the project. Little change will happen without at least a full time, committed project leader with a good understanding of the Business Excellence principles. Our recommendation for a project the scale of Contico's  is that there should be a project team of at least 3 full timers (plus, for larger companies, 1 more for every 200 employees). You should see who you want on the project team and then see how you can free them up for the duration of the project. Companies often employ staff on temporary contracts to "back fill" the people on the project to give them an assured route back into the business after the project is completed. The last thing you want is for these valuable staff to leave and become consultants!

If the company is unable or unwilling to commit this level of resource, the project has to be scaled down accordingly and the time scale extended. A realistic and attainable project cost and benefit analysis (for more details see Business Excellence pages 190 to 193) will help decide the optimum level of commitment. Many companies find that the potential benefits from improving their planning and control processes make the appointment of a full time project team one of the highest yielding decisions of their careers!