Logistics Are Frank Lorentz’s Passion
Recently, I had the chance to visit Ventec International Group’s German facility in Kirchheimbolanden (KIBO), where I met Frank Lorentz, Ventec’s general manager for the location. Logistics are clearly Frank’s passion. He lives and breathes it. If you spend any amount of time with him, that is abundantly clear.
The interesting thing about Frank is that his background is in the newspaper business, not the PCB business. His career is logistics, and he is very good at it. As Frank said, in the newspaper business, if you are a day late with your product, then it’s only good for wrapping fish. He brings that thinking into the laminate distribution business.
Efficient communication is key for logistics, so Frank starts each morning with a five-minute team meeting. This is a standing, no-chairs meeting that’s long enough to understand the priorities of the day and pass on the information everyone needs. As Frank explained, it’s important that everybody understands what everybody else is doing.
When you walk through the Ventec facility with Frank, he uses the word “standard” over and over: process, products, and packaging standards, etc. As he says, “Making it efficient is one thing, and making certain the processes work is equally important. That’s the job we have to do, and no standard is good if it isn’t realized.”
Frank has created a culture of continuous improvement. It starts from the moment a new employee is hired. They will spend their first week working on the shop floor, regardless of their position. Frank said, “We have a continuous process improvement culture with lots of small steps. We recently passed the re-certification audit for our ISO 9001 approval with no non-conformances. Our systems have been ISO 9001:2015 certified since 2016. It recognizes our entire team’s hard work and the success of our quality strategy for the benefit of all our customers, and that supplements the company’s main manufacturing site certifications of AS9100 Rev D and IATF 16949:2016.”
The following is an interview with Frank, which was conducted after our tour of the KIBO site.
Barry Matties: Frank, let’s start with a quick overview of your background.
Frank Lorentz: I’m a logistics guy, and I started in 1997. In the past, I worked for Ingram Micro that did the logistics for Cisco Systems in Europe until it was closed. After that, I worked as a supply-chain manager for the biggest newspaper in Germany and then in the same industry with Germany’s largest newspaper distributor.
Matties: And you joined Ventec without an industry or laminate background, but you brought your logistics background. When you came into Ventec, what role were you hired for?
Lorentz: I started as a production manager and took over the logistics as well.
Matties: There are a lot of areas that a company can improve. When you come into an organization like this, what was your strategy?
Lorentz: First, you have to know how the machines are running. You have to create benchmarks to bring in the highest level of quality standards for everybody.
Matties: When you talk about benchmarks, you’re documenting the process and getting a performance metric, if you will, for each step of the process. How do you decide what the most important area is to tackle first?
Lorentz: To successfully and continuously improve processes, you need to know your products and processes, so I worked on every machine and task together with my colleagues to learn how to do it by myself. I looked at how heavy a package was, saw how the machine ran, and figured out what we could optimize to improve overall efficiency and quality.
Matties: You talked to the operators and learned the process flow as well as the knowledge of their frontline insight because they know what’s working well and what’s not. What were your goals, and how did you prioritize what areas to work on?
Lorentz: I worked alongside my colleagues at the machines, where we had the most orders, to learn what they were doing. I was actively involved in the whole process.
The key is always to focus on the customer and set key goals accordingly as to how we want to deliver the products in the right quality to the right customer and at the right time within the global network of Ventec, while also considering the local requirements of each region. All improvements and the priority of each will first and foremost be driven by customer requirements and our service promise to them.
Matties: Having that detail of information makes the business run smoother.
Lorentz: Absolutely. But what we have should be a standard in the business because we can’t send the wrong goods to our customers.
Matties: It’s efficient, and you save time and money.
Lorentz: And you ensure that you have the right goods in the right place; that’s the most important thing.
Matties: And the customer wins.
Lorentz: Ventec offers a wide range of materials which we can quickly deliver to our customers. We have two systems. For repeat customers, who always buy the same product in the same size, or for those that have a consignment stock, we receive it directly from our manufacturing plant in China or Taiwan in its original packaging. Of course, we also fulfill customer orders, where a customer, for example, might need specific volumes or sizes.
Matties: Sent from Ventec China to you?
Lorentz: Yes, from China or Taiwan. For customers needing a specific size or only five to 10 sheets, we can take the material in sheets and cut it to size according to the customer’s requirements.
Matties: You have the ability to tailor it to their needs.
Lorentz: Correct. There has been a huge change in the organization of our production. We have the ability to deliver quickly. If you call me in the morning, and I have the materials in stock, we can send them out on the same day. Our production is always one step ahead, so we’re able to respond to customer demands on short notice by preparing orders in advance rather than waiting until that day to get them ready. If something can be brought forward, we work it into our task schedule. This is not only efficient but also allows us to handle unexpected events or urgent requests because we’ve already done the jobs we promised for that day.
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.