Situation

When a problematic vendor failed to fulfill orders at a facility near Saltillo, Mexico, one of the world’s largest heavy truck manufacturers hired a new Tier 1 supplier to take over production for its largest assembly plant. Start of production, however, did not go as smoothly as anticipated.

The supplier quickly learned they needed to address a backlog of nearly 9,000 parts that they had inherited from the former vendor. Plus, they had to outfit over 700 heavy trucks with the critical part before the trucks could be delivered to customers.

Knowing this outstanding work could take up a majority of resources and reduce the capacity to deal with new orders, the supplier called in Cornerstone Consulting Organization due to their proven record of delivering successful turnarounds. The supplier recognized they would need support to identify and execute corrective actions that would eliminate chaos and restore order at the facility.

Approach

The Cornerstone team had boots on the ground within days to evaluate the situation at the facility. Due to workforce instability and the fact that the supplier’s leaders were unable to get to Mexico due to pandemic-related travel restrictions, the Cornerstone consultants filled the day-to-day management roles in an interim capacity to stabilize operations and work toward eliminating back orders.

The Cornerstone team quickly jumped in to perform an audit of existing operations—a critical first step that informs the execution of the Operational Excellence (OpEx) method. The comprehensive assessment of operations, staffing and supply chains helped the consultants to define solutions that would restore order at the facility. For example, the Cornerstone team developed complete work instructions and redefined workflow to balance the manufacturing line after completing a time study using the Modular Arrangement of Predetermined Time Standards (MODAPTS).

The top priority was to return operations to balance, focusing first on outfitting the unfinished trucks to ensure orders could ship and meeting daily production goals to eliminate backlog. Once all past due orders were fulfilled, the Cornerstone team turned their attention to establishing the supplier as a shelter service company and claiming VAT rebates to recover millions in paid taxes, which helped with overall cost savings.

Finally, the Cornerstone team worked to improve inventory accuracy to optimize operational performance. Realizing that the supplier did not yet have an inventory system, the consultants compared a modified daily cycle count against customer orders to establish a “days on hand” metric that proved effective until a more systems-based approach could be implemented.

Results

The Cornerstone team produced substantial results within weeks of arriving at the facility. Key results included:

    Three Weeks

  • 92% reduction in the number of unfinished trucks
  • 75% reduction of parts backlog

    Two Months

  • Eliminated all past due orders
  • 50% increase in inventory accuracy
  • 30% improvement in absolute presenteeism

The Cornerstone team not only delivered a successful turnaround, but also ensured the supplier was prepared to effectively manage production moving forward. After restoring balance, the consultants stepped back from managing day-to-day responsibilities to focus instead on delivering quality candidates to fill long-term positions. Getting the right people in the right roles has proven effective in maintaining balance and profitability at the facility near Saltillo, Mexico.

 

According to the supplier’s leaders, the term consultant does not appropriately describe Cornerstone Consulting Organization. The team offers so much more, including temporary staffing if job roles are not filled but critical to supporting day-to-day operations. When businesses are challenged—even for their very survival—Cornerstone has a track record for providing both operations support and staffing services that deliver results.