LEAN MANAGEMENT AT KSB SHANGHAI PUMP
When German pump and valve manufacturer KSB was looking for ways to improve its processes for petrochemical and chemical business in its China subsidiary KSB Shanghai Pump Co., Ltd, the project team decided to start at the very beginning: the sales department.
Pump specialist KSB has set up its headquarters for petrochemical and chemical pumps not in its heartland, the tranquil town of Frankenthal, Germany, but in Shanghai. From China, the market area is steering its ambitious expansion plans in this dynamic market. Despite the promising start, KSB has faced some challenges: “We have realized that we need to streamline our processes in order to achieve our growth targets,“ says Bernd Hoffmann, President Market Area Petrochemicals/Chemicals. “If we can only handle increasing order intake with additional manpower, growth will not be profitable in the long run. That‘s why we had to change and optimize business processes.“
First step: sales department
The company decided to start its lean journey at the first point of contact with the customer: the sales department. Mr. Hoffmann explains: “Sales is the first step in the entire process. If sales can make a good contribution, this has a positive effect on the entire company, as the rest of the process can run much more smoothly. That‘s why sales is a key point for us.“ Starting with the sales process from project acquisition until contract hand-over, the lean transformation will be continued with the order fulfillment process.
Step by step, the entire operation will now be converted to lean management. Mr. Hoffmann explains: “The order processing is overly complex. And in the past, there were inconsistencies regarding the information provided from the sales department to other departments. Often there was no precise order or too many open items. Inconsistencies e.g. inpurchasing specification for traded items or in requirements for painting and testing of the pumps led to many discussions and complaints during order processing.“
It is very helpful to get an outside view and support from a consultant than to do it only from the inside and try to convince people that we have to carry out this conversion process. This lean changeover process is very difficult because it must be implemented across all hierarchies.Bernd Hoffmann
President Market Area Petrochemicals/Chemicals, KSB SE & Co. KGaA
Starting the lean journey
Together with the Chinese branch of Staufen AG, KSB launched a lean management project. The main objectives were defined as:
- Optimization of business processes
- Improvement of operational efficiency
- Transparency in day-to-day business
The implementation concept was designed to ensure a smooth order flow with the greatest possible transparency. In detail:
- Establishment of a structured visual management system that provides a clear overview of the status of projects.
- Rapid identification of potential process deviations while closing the problem-solving loop.
- Achieve improved status tracking throughout the process and establish process oriented KPIs (e.g., hit rate, lead time, delivery reliability). The structured analysis should also enable a continuous lessons learned approach.
According to Mr. Hoffmann, the introduction of regular meetings based on the lean principles was particularly helpful: “After about half a year, we were able to draw an initial positive conclusion. The number of misunderstandings between sales and other departments has dropped significantly.” The company has gained a better understanding of process deviations and problems relating to the project status. KSB also will develop a new system for checking and tracking the order status along the sales and production line.
The introduction of lean management is not so much a project as a continuous journey toward optimization and more efficient working. KSB has placed great emphasis on ensuring that the people in the company, starting with the management and working down to all levels of the hierarchy, embrace the new concept and play a key role in its implementation.
Potential to improve
Was the effort worthwhile? According to Mr. Hoffmann, yes: “It was an eye-opener for me to see the potential we have with this operation here in Shanghai. People feel that there is an opportunity to improve themselves with this concept and with the implementation of this project. And it was not just the trust that we created, but also the better understanding that people have of the process: There is potential to improve, and there is a way to do it.”
Pumps, valves and services: this is KSB’s business. The company can trace its roots to mechanical engineer Johannes Klein, who received a patent in 1871 on the boiler feed apparatus he invented. From 1887 onwards the company was listed on the stock exchange. Today KSB SE & Co. KGaA employs more than 15.000 people at 102 companies worldwide and 190 service centers.