2018Case6DesignerGroup

29 L EAN C ONSTRUCTION I RELAND A NNUAL B OOK OF C ASES 2018 Case 6 – Designer Group Des igner Group i s a leading International Mechanical, Electrical, and Energy Provider. It was founded in 1992, and is a wholly-owned Irish company headquartered in Dublin with regional offices in Limerick, UK, Germany, Africa, and the USA. Its 2017 global turnover was approximately € 180M. It di rect ly employs 1,080 staff across the Group, and the health, safety and wellbeing of our people i s at the core of our business. We aim to do things right first time, every time. C O M P A N Y W E B S I T E OVERVIEW OF THE LEAN INITIATIVE This case details an internal continuous improvement project and the application of ‘Lean in the Office’ to improve the Business Process Facility Management (FM) Procurement within the Des igner Group Head Of f ice, Blanchardstown Bus iness & Technology Park, Dublin 15. This was a company-wide Lean improvement initiative with zero capital expenditure. LEAN INITIATIVE UNDERTAKEN – LEAN THINKING, TOOLS, TECHNIQUES www.designergrp.com AUTHORS Niall Stone One of the Lean initiatives undertaken was to address the ‘Failure Demand’ that was occurring in the procurement department – in a service organisation this is the demand caused by a failure to do something or to do something right for the Client. Due to the significant volume of orders the department dealt with daily, any form of improvement would have a positive impact on the company. Other steps used along the way included Plan Do Check Adjust (PDCA) and the use of A3s. Low Value FM Procurement As part of a financial analysis function of the enterprise resource planning (ERP) system, the database contains cost- head data. These cost-heads are used for budgeting and reporting purposes against all of our projects. The cost-head system allows us to group various costs up to 9 levels. Each item purchased will go against a certain cost-head in a project so that we can track where the money has been spent. At the same time our estimators budget projects against these cost- heads so that we can monitor where purchases must be made. As noted earlier, goods are purchased for our FM business in a higher volume but are of lower quantity. The goods are generally picked up at the counter by FM staff. The supplier returns a docket to us containing item details, ticket/PO number, quantity, unit cost, signature (POD), and a total order value. A PO is raised to account for these goods. BACKGROUND TO THE LEAN INITIATIVE Historically, there was an issue with the efficiency in which we enter our FM orders into our “Redsky” accounting package. Unlike our main business in which procurement is generally in bulk (high quantity), orders carried out for our FM business are of a different magnitude. While the current input order process caters very well for our bulk buys, it is a very tedious and cumbersome process that takes a lot of time for our FM business as they have a higher number of orders with smaller quantities per order. Prior to this project it was necessary to add multiple details to multiple low value orders on a daily basis, and that work did not add value to the business. Too much detail was required during processing, with an average of 7 i tems/ l ines per order requi red. The procurement department received requests to order goods for FM works. Each item was then added to the purchase orders (PO), then items were selected from a database, and there was a process path to these items varying from 1-to-6 steps depending on the item’s location. There was also an issue with fitting new FM works into the procurement department’s policies and procedures. One of the main issues was how to deal with purchasing for reactive works in the FM business. Reactive works created multiple orders that would come into the procurement department daily, which in turn created email backlogs and resulted in delays for POs for more important areas of purchasing. Taking the example of one of our government agency customers, the following process was used when buying materials for a reactive maintenance job: • A ticket was raised on the Designer Group system to correspond to a reactive call that was made to the FM Helpdesk. • After an engineer was dispatched to deal with the call, a material request was made to the company buyer. • There was an average of 5 calls per day, which equated to approximately 25 Internal Requisitions per week (100 per month) from FM Engineers for the reactive Government Agency Helpdesk. • The engineer would obtain the required goods at a wholesaler counter and send a list of items to the buyer – in parallel to the wholesaler sending a quotation. • On a weekly basis, 25 Internal Requisitions were sent by mail in addition to the 25 quotations received from the wholesaler, yielding an estimated 50 emails per week for this process and equating to 200 per month. • 100 separate POs per month were also resulting in 100 separate invoices for accounts payable to process. • Designer Group would then in turn bill the client per month based on the associated ticket number. COMPANY OVERVIEW Daniel Elebert