Below is the latest MLG news. You can also go to our archive where you can view and/or download any of our newsletters. The MLG newsletter is a periodical designed to keep you aware of some of what MLG has been doing in recent times, and of other things happening which may be of interest. To subscribe to future MLG newsletters please click here or use the enquiry link on the left.

Planning in Oil

David has been working with one of the oil majors in a worldwide team making substantial improvements in planning of the upstream business. In the wake of some of the recent major incidents (eg the Texas City refinery blast) the whole oil industry has had to look more closely at its planning processes amongst many other areas.

There are inevitably major conflicting requirements from the various functions and a severe limit on bedspaces on offshore platforms. This results in a vitally important need to carefully co-ordinate resource utilisation, in an environment where it is difficult to predict the content and duration of some tasks.

Set against the backdrop of rising costs and falling production levels, the pressure is on all the North Sea fields to optimise in both the short and long term – many of you will recognise this as the usual unachievable ambition. In addition to these constraints, for some fields each stoppage (breakdown or maintenance) reduces output levels for all time.

This was an interesting planning challenge, complicated by the work being undertaken in ‘coaching’ mode because of the need for cultural change in the organisation.

S&OP Continues to Attract Attention

Might Sales and Operations Planning challenge Six Sigma as the management hot button of the ’noughties? It is certainly something we are being asked about on a far more frequent basis these days. In some cases people at the operating unit level are identifying for themselves that improving the supply of information from the sales function and setting out a valid forward manufacturing plan is essential for their improvement; in others it is coming down as an edict from Corporate.

Robin continues to specialise in the subject. One major multi-national recently bought 200 copies of his booklet as part of its worldwide implementation of S&OP. The company is encouraging everybody involved in this process to read the booklet before attending workshops. We shall see shortly how many have accepted the encouragement!

Robin and David are also currently working with a company which makes and repairs tools for the Oil and Gas Industry. They have identified that their planning processes are too short-term and see formalised S&OP as a building block for the medium term plans that the business needs.

So, is S&OP anything new? We would say that it most definitely is not. Quite apart from the fact that it was specifically defined within the early (c.1980) Ollie Wight vision of MRPII as the step above Master Production Scheduling, we all had some means by which Sales talked to Operations even before anybody had heard of Messrs Wight, Orlicky, Plossl, Landvater and Wallace.

There are, as with all such topics, points of contention. Within MLG there are healthy debates as to the definitions that have arisen in recent times. The remarks made in numerous publications describe the majority of companies approaching business planning as being entirely distinct from day-to-day operations. While it may be that in some companies a financial plan is established once a year without reference to the sales forecasts that have been driving the supply chain in recent months, it would be unfair to assume that this is the norm outside the S&OP community.

That is not to say that S&OP in its formal approach is of no value. As Robin’s booklet explains with great clarity, the benefits of the formal approach are in its step-by-step guide to converting sales forecasts into operational and financial plans. (The MLG definition of a plan is something we intend to do; it is valid and achievable.) Through S&OP all major departments really do sing from the same hymn sheet.

Robin’s booklet is based around the steps as shown below. Click here for more info

Robin has also written a hypothetical case study based on the experiences of a real company in Eastern Europe, a free copy is available here.

Customer Service Achievement

Congratulations to our client BD Kendle – a premium manufacturer of oil well-servicing tools – on their magnificent 95% on-time delivery to customers. This was achieved despite a massive order book and record throughput. The management team received well-deserved congratulations from the worldwide head of manufacturing for the huge Weatherford Corporation. 

As you may remember from a previous newsletter David and Ian worked with them on Sales & Operations Planning, Rough-Cut Capacity Planning and MRP over the last year. Their team have performed magnificently at a time of considerable business growth with all its attendant pressures.

Worldwide Standardisation

Areva T&D (Transmission and Distribution), a long and well-established MLG client, are in the process of rolling out a global SAP implementation throughout their many worldwide sales and manufacturing units. The intent is to develop consistent core business processes and systems whilst still catering for local variation and innovation.

Ian helped the central service group to understand and implement best practice in the critical area of master product data. It is a complex environment where similar products and components are being designed and manufactured at many sites worldwide and the intention is that all units will use a unified global system and processes which will leverage the synergies that may currently be missed. The company is expecting to cut new product development time significantly, reduce the variation in product design and rationalise component stockholding. The overall result will be a more agile and dynamic supply chain.

Another key area is the company’s interface to their customers and suppliers and the image portrayed. John Dean has been working with the customer services team on the many and varied pieces of hard copy and electronic documentation that passes between Areva T&D and its customers / suppliers from all business units. A consolidated corporate standard set of documentation is being developed whereby, with whichever part of the organisation a customer or supplier deals, the communication format is common, albeit in different languages. In addition to benefits in terms of a clearer and better corporate image and reduced customer confusion, the project is expected to make significant energy savings in terms of the number of pieces of paper generated, printed, posted and faxed. A truly win-win-win situation!

Interim Management Keeps MLG Sharp

Our last newsletter described John Beecroft’s interim role within RKL Engineering. John took full management responsibility for this business while its Chief Executive was absent with health problems He led several major projects to successful conclusions in terms of customer satisfaction and, most importantly, bottom line performance.

The latest MLG venture into interim management involves Ian assuming the Head of Operations role within a long-term MLG client. This business has been through significant growth in the last couple of years. As ever in such situations there is a danger of resource growth lagging slightly behind the increasing order book; customer arrears can begin to cast a shadow over what is essentially success. In addition, business processes that work at one level of activity can become strained as the pace of life is speeded up. 

Ian became responsible for all manufacturing and supply chain operations supplying engineered products into the Project as well as into the Maintenance, Repair and Outage (MRO) markets. With a team of seven direct reports he introduced a number of changes in process and several Continuous Improvement initiatives were undertaken.

We are pleased to report that at the time of writing significant progress is being made. Record output levels have eaten into the order book arrears. As the resultant pressure falls, more time is becoming available for further improvement activity to be undertaken.

Why do the MLG team take on such tasks? Firstly, because we enjoy the challenges that this work offers. Secondly, because when we claim that a key benefit of using MLG is that of getting assistance from hands-on, practical and pragmatic change managers, we can do so in the knowledge that we are real managers.

What are the benefits to companies of using professional interim managers? Well, change management requires a higher calibre of manager than that of day-to-day running. Using a specialist in best practice to lead the business through a period of change offers a better chance of success. Professional interim managers are also specialists in the handover process back to the in-house team. We can help recruit, or identify permanent replacements from within, and transfer power in a way that avoids dangerous gaps and tasks falling down cracks.