A contract manager team tackles management vacancies

A team of interim managers covers vacancies in a Spanish multinational group

The Context

The client company produces mechanical components for the automotive industry. It belongs to a Spanish multinational group operating in several countries around the world. The Italian plant is a center of excellence for the group’s activities thanks to a steady strategy of continuous improvement conducted by current management over the years.

The company works in a mature market: margins are low, there is little scope for innovation and production costs weigh heavily on performance. As a result, the efficiency of the manufacturing cycle is the key to profitability.

Purchasing has a fundamental impact on P&L, all the more so in a context in which the cost of raw materials and energy is subject to dramatic increases. Energy alone makes up a quarter of product cost, while shortages of raw materials can disrupt production. For all these reasons, the company urgently needs to analyze how the business is managed and to take a long, hard look at its short- and mid-term planning.

Planning and Control finds itself having to work faster and harder to monitor production cost trends and to forecast the impact on results.  Only thus are they able to take timely action and mitigate risk.

The Problem

The company loses, at the same time but for unconnected reasons, two key managers, one in Purchasing and the other in Planning and Control.

The Italian company is based in a region where it is hard to find qualified resources. Local young graduates do not find the company’s sector and type of production particularly appealing.  In such cases, the solution is not always at hand and in fact it will take the company several months to find replacements.

Moreover, the company has embarked on a major project to upgrade a core part of the plant. This will allow it to monitor production parameters in real time and so meet market needs.  The project includes replacing the numerical control systems in two core lines in the casting area with state-of-the-art equipment.

The company lacks resources with the project management expertise required for overseeing such a complex project.

The Solution

To cover the vacancies and to oversee the project, Contract Manager quickly provides three managers who can step into the situation.  They possess all the skills required to bring about innovation in methods and processes, and to guarantee continuity.

A Contract Manager team is thus set up within the client company to provide immediate support.

The three highly experienced managers, one in Purchasing, one in Planning and Control and one Project Manager (tasked with coordinating the upgrade project), all support the company in this delicate moment of transition towards a more efficient, modern organizational model.

Purchasing is in no way disrupted and benefits from a new systematic approach. The main contracts with the suppliers are reviewed and renegotiated by priority.

The production lines are kept supplied by sourcing raw materials from abroad, often at more favorable terms.

Planning and Control guarantees continuity of compliance with group budgeting and reporting procedures. Cost control is tightened and forecast results are monitored on a fortnightly basis. As is planning and  review of plans for the following quarter. Inventory control procedures are strengthened and improved, both for inbound goods and analysis of consumption of material in the production cycles.

The plant upgrade project is successfully completed on time and as per plan, thanks to the commitment of all concerned.  In less than ten days from the start-up of the upgraded lines, production levels are back to pre-project levels, much to management’s satisfaction.

Conclusion

The year closes with positive economic results beyond all expectations, especially so given the challenging time the company has gone through. New resources to cover the vacant positions have been selected and have received on-the-job training, so guaranteeing continuity.

In addition to the strictly professional aspects of the positions covered, the intervention of Contract Manager’s team has been praised by the client for their professionalism, their balanced approach and their good judgement and willingness.

Their professional and personal experience and their ability to adapt to the context, and to build relations with it, have allowed cultures and methods to merge together in a positive way. This osmosis with the company’s management and employees has been surely aided by the welcoming attitude of the local personnel and their willingness to accept things which must have appeared “new” or “different” to their eyes. The team’s international experience has allowed them to maintain and strengthen relations with their respective interfaces at European headquarters.  HQ management has appreciated and constantly supported Contract Manager’s intervention.

To conclude, the difficult period of transition to new organizational stability has been completed to the client’s satisfaction, both locally and at group level.

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