Operational Excellence

Application

One spin-off application area of PIMS® is the PIMS® Global Lubricants and Greases Supply Chain Benchmarking. For over 25 years PIMS® has been benchmarking the supply chain of lubricants and greases plant operations. Currently our project covers over 50% of the global annual throughput. Hence it has become the industry standard for assisting companies to optimise their supply chain by learning from appropriate comparisons. To find out more about the project in detail, please have a look on our brochure.

Participants*

* a selection of participants

Motivation

Lubricants manufacturing companies worldwide face tough challenges. The main market, automobiles, is undergoing fundamental transformation to electric vehicles which use fewer and different lubricants. Socio-economic uncertainty, climate policy, and increasing competitive pressures are forcing producers to re-examine all areas of operation. Historically, there was pressure to increase market share and capacity. Nowadays, where demand is weakening, manufacturers place increasing emphasis on a lean and resilient supply chain. In regions where demand for lubricants is rising, companies focus on capacity and complexity management.

Objectives

The benchmarking allows us to:

  • Capture comparable cost and performance metrics across different companies and regions.
  • Measure the drivers that cause performance differences: scale, automation, product mix, complexity, service levels, distribution policy, location, processes, etc..
  • Quantify how performance is affected by these drivers.
  • Set benchmarks for each plant that take into account its strategic and structural profile (i.e. the drivers that are unlikely to change).
  • Obtain results that ensure data confidentiality while setting targets for cost and performance improvement.
  • Implement recommended changes to achieve better profitability and growth.

The PIMS® programme can also be an invaluable financial and operational due diligence tool in the M&A lifecycle. The analytical insights obtained will:

  • Provide objective evidence of the true competitive position of the manufacturing plants and warehouses by benchmarking OPEX relative to geographical peers
  • Identify core strengths, weaknesses, opportunities and risks within the supply chain by benchmarking versus strategic “look-alike” peers
  • Assist in deriving a fair valuation of the business and making the go/no-go decision

Project deliverables

  1. A comprehensive report for each plant comprising:
    • Regional comparisons against top quartile, median, and bottom quartile performance. PIMS® drills down through a comprehensive waterfall linking unit cost to operating metrics in each area of the plant measuring complexity, productivity, configuration, production planning, etc..
    • “Look-alike” comparison against plants that match a particular plant’s scale, product mix, complexity, logistical connexions, labour cost environment and automation – factors that are difficult to change. This identifies strengths and weaknesses and quantifies the quick wins in cash.
    • Comparison versus local low cost competitors (who are not necessarily look-alikes). This highlights factors for competitive celebration and concern. PIMS defines local areas to meet clients’ needs while guaranteeing 100% confidentiality.
  2. An Executive Summary identifying the key areas of improvement and quantifying the financial prize from matching best practise.
  3. 12-month access to the PIMS® analytics software. This empowers clients’ operational excellence teams to make deep-dive analyses of their plants.

Connect with our experts

We would be delighted to meet with a leadership team to give an overview of the project process and deliverables (including analytics software), and to explore how you might structure your data assembly and timing to best benefit from participation.

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