Re-engineering a business process
A Dr Martens case study

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Page 4: Performance

Dr Martens 3 Image 1Griggs began implementing the report’s recommendations. The area which required the most urgent attention was that of late deliveries for customers. The major cause of poor delivery performance was the mismatch between sales and production capacity. (i.e. the amount of sales made and the ability to meet these sales.)

Between June 1995 and December 1996, a number of actions were taken to improve the situation. In June 1995, only 55% of orders were delivered on time. This continued to worsen through August where it reached 47% and finally bottomed out at 45% in September. This poor performance was due to making more sales than production capacity. It was pointless at this stage to continue taking orders and making delivery promises which could not be achieved in the short-term. This meant that either production capacity would have to be increased dramatically or the number of orders would have to be held in line with capacity for each month.

A decision was taken to ensure that orders taken would reflect the capacity for each month promised. This immediately improved the quality of service drastically from 45% in September to 67% in October and 84% in November. Throughout 1996, further improvements were made to achieve 86% in January 1996, with a remarkable 99% in December 1996.

The planning department

In order to ensure that re-engineering was successful, the right quantity and mix had to be established to match the order book to customers’ requirements. At the same time, it was important to establish an order routing system which would take account of the different capacities of the individual manufacturing plants. This would provide local manufacturing plants with an order portfolio to match their capabilities. Discussion and negotiation helped to establish how deliveries could be rescheduled. Two significant steps were taken:

  • The order intake for September 1995 was frozen, allowing manufacturing to clear the backlog in areas with restricted capabilities.
  • The available capacity mix was made known to the sales organisation. This helped provide a clear picture of possible supplies and any necessary adjustments to order intake and capacity.

The next step was to implement the electronic planning tool, ‘AutoPlan,’ which came on line on 17 May 1996. This further improved control over capacity, work in progress and strengthened communication links to sales. The ownership of order processing and production control was passed to local planning offices where control of order processing and work in progress were further strengthened.

In a fast moving environment, an electronic feedback loop allows a faster overview of operational activities. With the new tools of management in place, Sales, Central Planning, Supplies and Local Planning were best positioned to react to situations around them and to take advantage of the opportunities they presented.

Dr Martens | Re-engineering a business process
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