In this section, we briefly describe the main projects that the Group Lean Management team has been involved in over recent years.
Supply Chain Business Continuity
Covid19 and the ensuing national lockdowns put a strain on the supply chains of manufacturing companies. CAREL grasped the opportunity to develop a project to strengthen its supply chain and ensure long-term business continuity.
The project started in May 2020, with the aim of analysing all the weaknesses and potential damage in the supply chain, in order to propose a risk assessment model that can objectively highlight the gaps and address subsequent calls to action.
Based on the evidence gathered in the months of process mapping and supply chain analysis, a risk matrix has been proposed that categorises suppliers based on potential damage and probability of occurrence. To measure potential damage, it was decided to look at the raw material and identify the sales revenue linked to each component, mitigated by safety inventory, alternative sources of supply, etc. To measure risk, on the other hand, we looked at suppliers: their financial solidity, size, impact on revenues, geographic location, etc.
Once developed, the model was applied to all raw materials and all suppliers. This highlighted four areas of mitigation actions, which were then distributed throughout the organisation for implementation.
Business Model Generation
In a context of continuous evolution, in which uncertainty is an intrinsic part of the period we are facing, quickly understanding new trends and market evolutions is essential to remain competitive. CAREL consequently decided to establish a project aimed at managing innovation in the company, with the goal of learning how to quickly respond to external stimuli and thus offer existing and potential customers what they really need. The objective of the project is to bring innovation not only to the development of individual business ideas, but across the board, involving people, processes and tools.
Therefore, in September 2020, the Business Model Generation project kicked off, focusing on the creation of a custom CAREL method aimed at exploring new business models. The process is based on the establishment of focused teams that, through a series of experiments carried out directly with end customers, can develop customer-driven solutions, accelerate development times and minimise the risk of failure of new initiatives.
The coming months will see an acceleration in the development of the parts relating to people, the organisation and the link to corporate strategy, so as to embed this all-encompassing innovative approach in the company.
Lean transformation in the context of post-merger integration (PMI)
The integration between two companies is typically a long and complex operation involving people and processes from both organisations. Usually, it is managed by a cross-functional team given the task of developing the integration roadmap and defining its objectives. The team is thus responsible for creating connections between the main and local organisations and fostering synergies where possible, while at the same time maintaining the distinctive features of the new organisation.
As a consequence, lean thinking, which is based on the principles of respect for people and continuous improvement of processes, is also fundamental in supporting integration processes between two organisations.
Together with the companies that have joined the Group in recent years, CAREL has decided to also exploit the advantages of lean philosophy for post-merger integration, considering its principles and tools to be a fundamental advantage for the organisations involved. Specifically, the lean transformation approach has been divided into two phases: the first, the initial phase, supporting integration and “serving” the needs of the new organisation, the second, more broad-ranging, aimed at creating a continuous and robust lean transformation.
Process Owners Project
The Process Owners project started in the summer of 2019 following a request from the Information & Communication Technology Department, which was very often involved in solving requests that went beyond the choice and operation of digital tools, and indeed concerned the definition and operational management of processes that belonged to other functions. Considering moreover the company’s growing international dimension, the need emerged to clearly define and identify the processes, standards, procedures and ownership, and the responsibilities of the different functions in the processes at a Group level.
The Group Lean Management Department first of all identified the key duties and responsibilities relating to each role within the processes, as well as the methods for mapping these and drafting standards. Initially only some company areas have been involved, however the project will be extended across the entire company, defining within each department processes and sub-processes, roles, responsibilities, standards and process performance indicators.
This initiative will make it possible to acquire greater awareness of business processes and create the basis for improvement initiatives.
One of the most complex challenges that companies have had to face in the recent period is the growing need to diversify their offering, so as to better respond to market needs and to distinguish their value proposition from that of their competitors.
CAREL has responded to this need with several initiatives. Historically, the company has managed product variants using the “PLCM” process, i.e. an internal process focused on developing new products starting from customer requests received via the Group’s subsidiaries.
For the new iJ product, this need became one of the founding pillars of the new platform, indeed giving life to a project, started in 2019, that involved using the PLCM process to improve performance in terms of quality and above all the time taken to activate a new part number from receiving the customer’s request.
Through in-depth analysis of the process, in terms of flow and related activities, and the information systems involved, a new process was proposed that would be based on some fundamental “pillars”: in particular a reduction in manual operations, continuity of information flow and standardisation of the steps. These principles have led to the implementation of a technical configurator that reflects the modular architecture of the product, the updating of the standardised test program through a specially-developed web service, and continuous flow of information supported by clear process documentation.
This project has made it possible to significantly reduce lead times for the configurations envisaged within the product structure, meaning greater flexibility and better performance for our customers.
For CAREL, being competitive in its reference sector means being able to introduce new products and/or solutions onto the market that are capable of responding to customer needs in terms of variety, improvement in performance and product reliability. .
Consequently, CAREL adopted a modular design approach for the new iJ product platform involving the various parts that make up the product (in particular electronics and mechanics), with the aim of encouraging the introduction and generation of new solutions by reusing different predefined product modules. This modular logic started with the definition of all of the product’s features, corresponding to the different parts or modules; at the same time, standard interfaces were defined to connect the different parts together. Once having completed these first two steps, design continued independently on each module.
The main benefit of this approach, in addition to those mentioned above, is the possibility to create a very large number of solutions from even a relatively low number of variants for each module. The bCU platform can thus benefit from a high degree of configurability: the number of variants available is significantly higher than the total number of modules. Furthermore, implementation of the technical product configurator - possible only as a result of product modularity - facilitates the creation and management of product platform variants, thus combining an external competitive factor on the market with efficiency in internal performance.
PDCA logic represents the cornerstone of the lean philosophy that CAREL has adopted for many years now throughout the organisation. This way of thinking has been put into practice through the A3 tool, which since 2017 has become the means used by the company to support improvement cycles and new implementations. The simplicity of the A3 makes it ideal for summarising the experimental approach to problem solving on one sheet of paper. Indeed, it explains the steps in defining problems before thinking about solutions, forcing the team to go directly to the “gemba” (the place where the problem occurs), involving the people who work in the process to map and measure it. The tool then supports the identification of the root causes of the problems and subsequent identification of the countermeasures needed to reach the defined targets. Finally, it helps in drawing up an action plan, in measuring the effectiveness of the solution found to validate it, and in ensuring that this is sustained over time and becomes common knowledge through standardisation.
Speed, experimentation and focus on measured data are essential to be effective in meeting the challenges faced by the organisation. The A3 approach not only ensures a rapid, effective and structured process, but also allows projects to be linked to strategic management, harmonising communications between different company levels and directing everyone’s efforts towards a common and shared goal.
Team Leader 2.0
The Team Leader 2.0 project was established in September 2019 with the aim of evolving a figure that was already available in production, yet undervalued. There were many different needs: from the need to give greater autonomy and support to improvement activities managed independently by operators, to the desire to create an intermediate figure between the value stream manager and the operational level, as well as the need for greater organisational leverage.
The team made up of Lean Agent, HR, value stream managers and Plant Manager focused, in the early stages of the project, on benchmarking activities, investigating what role the team played in other companies and how it was defined in the lean literature. Starting from these ideas, the skills and activities of the Team Leader at CAREL as a company and in production were defined, generating a skill map. At the same time, a quantitative cost-benefit analysis evaluated the new figure in terms of offline hours and number of FTEs. The skill map was then used to identify new Team Leaders 2.0 and create an extended three-month training program spanning 40 hours. This was followed by a communication plan for the new Team Leaders and the organisation.
After the sudden interruption to training due to the lockdown in 2020, the new Team Leaders, who in any case were able to take part in on-the-job training in the intervening months, finally completed their course in December that year. Today, the skill map and training plan are used for periodical assessments and when hiring any new personnel.
Lean Road map
The Lean Road Map concept was devised in 2018 to codify a general standard for the creation and development of the various CAREL plants around the world. The Lean Road Map is in fact used to broadly measure and assess the plants and define steps to advance continuous improvement in the production, office and systems areas.
The main tool is an annual self-audit that measures issues including 5S and structured PDCA, and priorities such as safety, quality delivery and cost, as well as others. Indeed the audit also takes into consideration aspects relating to communication, leadership, organisation, innovation and consistency with corporate strategy.
The self-audit carried out by the plant managers is then discussed, and where necessary modified, with the Group Chief Operations Officer, during a meeting aimed at identifying gaps, defining new targets for the following year and then choosing the priorities. The audit then leads to the creation of an annual action plan for the plant in question, also called the “Lean Road Map”.
The Lean Road Map is a fundamental part of CAREL’s renowned constant search for excellence. The “score” assigned in the audits is used to plan the necessary support or development actions for the various sites, developing strategies and launching projects and initiatives.
PDCA & Daily Kaizen
One of the characteristics of a company that believes in lean principles is a culture of continuous improvement or kaizen, in other words, a constant sequence of small incremental steps, throughout the organisation, as it aspires and strives to reach perfection.
CAREL, as part of its transformation, has decided to adopt this principle by allowing its people time to spend on kaizen as part of their working hours, and to channel these efforts into a specific structure, the PDCA meeting system. The name, taken from the Deming circle, has the function of associating improvement activities with the scientific method that permeates the organisation. The structure of PDCA meetings at CAREL is divided into three levels and guarantees: on the one hand, a bottom-up movement of problems/improvement opportunities, so as to find the right skills to solve them within the organisation, and on the other the deployment of strategic inputs from the top down. A further strength of this infrastructure is that it involves both production, through gathering information on problems/opportunities from the lines and the 5S processes, and the office area, with R&D and the commercial subsidiaries.
Years of experience have proven the effectiveness and value of kaizen, which is today a fundamental principle for the organisation’s development.