A breath of fresh air. – Aerzen

A breath of fresh air.

A soaring example of Lean transformation.

Mechanical engineers from Lower Saxony, Germany, provide a soaring example of Lean transformation. 

Change processes all depend on how a company‘s management sees itself. This is an insight that gained ground at Aerzen, a specialist in compressed air, gas and vacuum, and the outcome was a massive Lean transformation project.

By no later than 2014, it was clear that something major had to change at Aerzen, a company in northern central Germany. Business successes which had occurred since the turn of the millennium had made it possible for the plant there to grow dramatically, but the organization, structures and corporate culture could not keep up.

The increased complexity in order management created massive problems in areas such as delivery dates. To alleviate the problem, the company decided to pursue a Lean transformation.

The best way to demonstrate what a lean and efficient business looks like is to illustrate with authentic examples. As a result, the first step was to schedule BestPractice visits such as trips to Voith and MTU Aero Engines. Motivated by their new impressions, the Aerzen team started out by offering training to 100 of its managers. At the same time, Staufen also held classes to help people become Lean Trainers who then served as multipliers in the company.

Management has to be committed to the transformation

From the very beginning, there was a clear focus on employee training. This was the right decision, because as it turned out in the course of the project, some 60% of Aerzen employees were eventually assigned to different departments. And when such extensive changes take place, people need orientation. The situation requires managers who not only call for new ways of thinking but lead by example. And this has to happen at every level all the way to the top, as CEO Klaus-Hasso Heller says. “The executive management is the driver of this kind of transformation. It has to inspire managers and employees. And it has to offer many answers to the question, What is the point of lean, and why are we doing this?” And he takes all of this very seriously: he tackled the issue on an ongoing basis and underwent a change process himself with regularly held coaching.

The net result brought about a brand new corporate and management culture at Aerzen. Integrating Shop Floor Management throughout the entire product value stream improved communication. A new conversational culture has now taken root among the two thousand-plus employees worldwide. Employees have gained greater confidence in the problem-solving competence of their managers and the entire corporation.

Reducing lead times by a third

The surge in confidence also made it possible to implement sustainable process improvements in parallel. Initially, several light-house projects started with a focus on client-specific modified aggregates. All of the processes related to order management were coordinated and oriented towards the client’s pace. Creating a value stream-oriented organization redistributed the functional categories of order processing, engineering, purchasing, assembly and logistics. Thinking in silos and the typical problems with touchpoint management became a thing of the past.

The success of these measures can be clearly seen when we look at the before and after of the order-management process. In the pilot projects, the lead time was three and a half months, of which only two weeks were actually process time. The rest of the period involved follow-up, queries and idle phases. Two years after the Lean transformation was initiated, the lead time has been reduced by a third. At the same time, the number of technical disruptions was lowered by 70%. Total productivity grew by 20% in the pilot areas. Aerzen can now successfully process far more orders with the same number of employees. Heller is enthusiastic as he sums up their progress: “Lean transformation has been an essential issue for us. It helps us guarantee that we can remain global market leaders, now and in the future.”