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Matties: While I was on the tour, one of the areas of improvement was the configuration of the equipment on the floorspace not only when you look at waste and process but also the flow of process because you can find waste in the way that you organize a shop.
Lorentz: When I joined, the feeling in the company was that the entire manufacturing and warehousing area was fully utilized, and any increase in capacity would require finding additional space outside. Coming in from the outside, I questioned that view. I focused on how we could improve the entire process flow to make the existing facility not only to make manufacturing more efficient but also to utilize space more efficiently and allow room for expansion without needing extra real estate. That’s exactly what we implemented. There are obvious bottom-line savings, such as rent, but the facility flow is also much more efficient. Further, we have catered for redundancy of critical equipment, making the business extremely robust, and the facility has the capacity for additional new equipment when we need it.
Matties: It took somebody like you coming in and looking at what you’re doing to benchmark and then make the process improvements to the methodology or space configuration. It’s a total package.
Lorentz: If you have a workspace already setup, everyone accepts how it’s organized. It can be difficult to visualize any other way. I had the advantage of a fresh perspective. Ultimately, this has allowed us to invest in the new machinery we wanted and improve the workflow without increasing the factory area or taking on extra premises, which, of course, would introduce its own complications.
Matties: Although you don’t have industry experience, your experience in logistics and systems thinking gives you a point of view that oftentimes companies don’t have because they get stuck in what they know rather than seeing it from that fresh perspective.
Lorentz: Absolutely. The benefit of my specialist knowledge in logistics is that we can focus hard on getting turnaround times right down and ensuring our customers get what they need when they need it. When appropriate, we ship products directly to the customer from wherever it is located. I have experience with form orders and knowing what’s going on in the logistics market. I know what can be achieved, and I’m here to ensure that’s what Ventec delivers for customers. Amazon doesn’t accept lead times like two weeks, and neither do we.
Matties: I recall one of the statements that you made during our visit is that, in the publishing industry, if your newspaper or magazine shows up a day late, the only thing it’s good for is wrapping fish.
Lorentz: What you learn in 10 years of publishing magazines and newspapers is that there is no delay or full stop. There is a date by which you absolutely must ship, no matter what happens; there cannot be a delay, and there’s no chance to postpone delivery. You have to be creative and savvy to understand and manage the flow of orders and couriers and always remain in control of stock coming in and going out.
Matties: As you’re talking about being on time, the other part of the efficiency challenge is inventory management. You’re making sure that you have the right inventory in the right place at the right time to send to your customer and be there on the date that they expect it to be there.
Lorentz: Right. That’s supply chain management, and it demands enormous technical focus. Always having the right products to ship is a huge job because you have to see clearly into the future while also keeping a perspective on current and past patterns. It’s hard to know what a customer wants, particularly if they haven’t bought it from you; you have no data to help you understand the demand, so it’s always a little bit of “Back to the Future” as well.
Matties: And when you looked at logistics and getting the right material to the customer on the right day, you even changed the way you ship prepreg, for example. I think you stopped shipping it toward the end of the week so that it didn’t sit in a truck over the weekend.
Lorentz: To make sure that our customers get our goods in Italy and Spain, for example, we send it out on Tuesday so that they normally receive it on Thursday or Friday at the latest. Shipping any later risks the shipment having to sit in a warehouse or in a truck over the weekend, where we have no control over environmental influences. The key is to control and optimize the time from leaving our facility to the time it arrives at the customer facility.
Matties: It’s those types of things that you looked at beyond the factory floor that makes a difference. You thought about the material leaving your factory and were concerned about the process between that point and when it arrives at their receiving dock.
Lorentz: The most important thing is not when you send the goods out because that’s not interesting for our customers; it’s all about when they receive their goods in perfect condition. That’s important. There are many small details that can have a significant effect; for example, we even look at weather forecasts to assess any additional protection that may be needed during shipping. We take pride in our proven ability to deliver across the whole of Europe in a maximum time of 72 hours.
Matties: What is the greatest challenge?
Lorentz: Since each of Ventec’s business units around the world has different requirements for their respective markets and customers, one of the key challenges is to integrate any new processes into existing ones. Each should standalone as well as integrating with other Ventec business units, such as those in the U.K., the U.S., China, and Taiwan. There are some creative challenges there, among the many changes we are making continuously.
Matties: The thing that you keyed in on that strikes me as a universal issue is integrating new processes into existing processes. It’s all tied to getting people to do their jobs differently. How did you work to get your teams to buy into the continuous improvement and process improvement mentality?
Lorentz: Everybody does it in a different way. We get a team not only through regular and consistent in-house and external training but also by empowering them to make their own decisions. You have to formulate clear goals and maintain a respectful interaction with the team, and then you see rewarding results.
Matties: One thing that we talked about during my visit was your daily five-minute meeting, which is a standup meeting. People don’t come in and sit down. My takeaway from that is that you’re getting buy-in from your team because their voice is being heard. It’s one thing to have a meeting, but it’s another thing to feel like you’re being listened to and heard as a team member.
Lorentz: It’s a question of culture and leadership. It’s like with a soccer team; the trainers don’t shoot goals, but no team wins a game without a trainer. And in the team, everybody needs to know what everyone’s roles are, such as who is playing defense, and who will shoot for goals. It’s important for everybody to understand their place on the team and, at the same time, feel empowered to make decisions and contribute their own ideas.
Matties: You have benchmarked a system, looked for the critical flow, and redefined the culture of your team. All of these things wind up being a benefit for your customers. Talk about the benefits that your customers receive.
Lorentz: We can respond in a flexible way to individual customer requirements and expedite quickly and to the highest achievable quality because everybody knows what to do. That starts by picking up the phone or reading the email and communicating the requirement accurately and concisely to the shop floor. We are always thinking about our customers, including what their needs are and how we can best fulfill them.
Matties: We touched on this earlier, but there’s an effect on the bottom line in the form of profit as well as happier customers, increased efficiency, added capacity, and lower costs. With your efficient utilization of factory space, you’re not spending more money on rent, so all of these things add to an improved bottom line. How would you describe the effect that you’ve had on the bottom line for Ventec?
Lorentz: It’s all about improving service for customers. The hope is that they experience improvements, such as consistently shorter delivery times, and appreciate receiving high-quality products in perfect condition every time. If you call me today and it’s urgent, we will do everything we can do to deliver. The customer also gets more flexibility because they don’t need to keep huge inventory themselves as a safety buffer; instead, they know that Ventec delivers perfectly and quickly.
Matties: For the customer, you’re saying that they can save resources because they don’t have to keep excess inventory since they’re relying on you.
Lorentz: And they can be more confident that they have the right product at the right time in their stock.
Matties: What are the key measures that you look at to know that you’re successful in your effort?
Lorentz: The first thing is quality, and the second thing is having the right stock. And to improve the packaging so that the goods can be dispatched quickly to our customers and always leave our premises and arrive with the customer in perfect condition. Cleanliness within the facility is also extremely important, and maintaining standards and driving improvement within a global organization like ours demands strong and sustained commitment.
Matties: Again, one benefit is that you didn’t have to lease another building. That’s an intangible benefit that people may not even realize.
Lorentz: Correct, and other key benefits are faster turnaround times and less inventory in stock. This results in better stock control, whatever your commitment to the customer; for example, you may have an agreement that involves holding stock for them; you can manage the stock much better, which has bottom-line improvements for our company as well as the client company. The improved packaging improves the quality and control of transit. Avoiding any situation where stock is sitting around, such as over a weekend because of rigid schedules, ensures that the product arrives with the customer in the condition you want it. During the visit, we talked about the improvements we have made specifically for this reason, including taking pictures of every pallet that goes out so that we have a record of each stage of the journey to help ensure it arrives in the best possible condition.
Matties: What advice would you give somebody that’s looking to improve their business?
Lorentz: Put your trust in quality and listen to your customer’s requirements to implement that in the best possible way. Furthermore, well-trained and satisfied and motivated employees are key to success.
Matties: Great. See you next time. Thank you.