Merging 3 Manufacturing Facilities: The Case for Pentair Technical Products
Pentair is a global diversified industrial company employing 14,500 people worldwide with facilities in over 40 countries and $3B revenue. This project involved Pentair’s Mexico facility, a 350,000 square feet facility with over 1000 employees, that designs and manufactures packaging solutions for electrical and electronic equipment or industrial and commercial equipment.
In a difficult economic environment, the company had an aggressive growth strategy which included cutting manufacturing costs through standardizing processes and platforms whenever possible. To achieve this goal, the company’s Mexico facility wanted to bring together three manufacturing plants with different leadership teams, organizational structures and processes to operate as one. This included supply management discipline to keep the operations operating as efficiently as possible. To achieve this, Pentair needed the leadership teams of the respective plants to work together in a more cohesive way to standardize their processes, as well as update their leadership skills in general.
Retained for a one year assignment, we began with data. We gave 16 leaders comprehensive data (in Spanish) on their own style and performance through 360-degree leadership assessments, involving all plant operations in the initiative. As a result from these data and other means, we designed and implemented a customized leadership program to build on the team’s strengths and bring them together in support of one another to achieve the organizational goal of higher efficiency through standardization. Goals were set at the individual and group level, and supported through facilitated group sessions, leadership skills training, one-on-one monthly coaching of every leader (in Spanish), etc. Individual leaders were supported in improving business results through their own functional teams.
The leadership teams of the 3 plants were merged and members cited the leadership work as a contributing factor in their ability to attain the following results:
Savings: Reached almost $200,000 more in savings over the annual goal, 4 months ahead of schedule, equating to increased profit and positive impact on operating income, including “Return on Sales”
Efficiency: Reduced the New Product Introduction process time by 25%; Reduced Lead Time Response by 30%
ISO/OSHA: 100% improvement in “Non-Conformities”; 87% improvement in “Observations” for the entire facility
Quality: Consolidation of two quality systems into one
Productivity: 10% improvement in one plant
Lean: 29% improvement (Qualitative measurements: efficiency, safety, time savings, reductions in re-purchases, more space, more orders from clients who see an organized & efficient plant) in one plant
Inventory accuracy: 58% improvement in plant #3 (Increased revenues through productivity gain in terms of reduced premature capital output, improved utilization of space, fewer production stops/delays, and time savings (less explanations, confusions, negotiations with client and internally)
By the end of that year the site earned the 2010 Manufacturing Excellence Award awarded by Pentair’s CEO to the best plant within their 40 + Water and Technical Products plant locations worldwide. The award encompassed outstanding results in various areas such as the Pentair Integrated Management System that includes 12 areas related to Operational Excellence and to the Toyota Production System including inventory, productivity, financial results of the plant, culture integration with results, safety, delivery, and quality among other areas. Pentair (Technical Products) received a PIMS score of 3.46 out of 4, being the highest scoring plant of Pentair.