Lean management system and purchasing consulting hand in hand
IFOX Systems GmbH creates resource transparency with its data analysis tool: every euro spent is classified as value added, waste or necessary waste. This also helps Kloepfel Consulting in its purchasing consulting: Achieved savings and optimizations are quickly illustrated and hidden potentials can be more easily identified to have them lifted by Kloepfel experts using proven methods. In an interview with Kloepfel senior partner Alexander Hornikel, Stefan J. Blöchl, Head of Operations at IFOX Systems GmbH, explains the advantages of the cooperation for medium-sized purchasing companies.
Mr. Blöchl, with IFOX you offer an operational information system for lean management. What are the advantages for German medium-sized companies?
If we think of the classic German SME, the controlling system is a service provider for the production system. Now, however, most ERP systems make use of classic cost accounting, which is now around 50 years old and, in our view, outdated because the basic ideas behind it are no longer up to date.
Our co-founder Dr.-Ing. Mathias Michalicki has therefore developed in his doctoral thesis in cooperation with industry a cost accounting and controlling logic specifically tailored to Lean, which underlies IFOX as an information system: The division of all operating expenses into value added, waste and necessary waste. So far, no other business intelligence software offers this subdivision. I like to compare this to a body fat scale: You already know how much you weigh – but you don’t know how much weight is fat and how much weight is muscle. For example, a company also knows that it has 100 million euros in operating expenses. We put that 100 million on the scale and point out for each euro: Is it being spent on value creation or waste? Once you do that, you see your company in a whole new light.
FOX Systems GmbH and Kloepfel Consulting offer each other great opportunities in a cooperation. What points of connection do you see?
Kloepfel Consulting is a recognized specialist in leveraging potential operationally in the purchasing area. IFOX helps to uncover optimization potentials cleanly, to make them transparent and measurable. These are indicated directly in Euros, so that it is tangible where potential can be leveraged. If IFOX Systems GmbH carries out a lean project at a customer’s site, it can quickly become apparent that there is significant potential to be leveraged in purchasing. In this case, purchasing experts from Kloepfel Consulting can be called in.
On the other hand, a purchasing project by Kloepfel Consulting can show that a company-wide introduction or optimization of lean management also makes sense. IFOX is then suitable for support in administrative areas, for example, where it is more difficult to really tackle waste directly in euros. So there are sufficient points of contact and so you can pass the baton to each other.
What level of lean management are companies typically at when you introduce IFOX?
The level of lean maturity varies greatly. Some of our customers are just starting their “lean journey” with IFOX. Then we accompany them from the beginning to clarify: Is lean worth it? How does it show up concretely in Euros? Where do the greatest potentials lie dormant? You need to know that since Lean has penetrated the West in the last 20 or 30 years, many large companies have stopped their Lean transformation. However, this was often because their outdated cost models showed that lean was not worth it: Lean is just not worth it. IFOX uses the same basic data but comes to a different conclusion because it has integrated lean thinking.
Then we have customers who are in the middle of the lean journey, they are already thinking lean. Here the “low hanging fruits” are often already picked and we support to uncover the more hidden potentials. We then provide detailed “ammunition” for the lean team and the process optimizers.
Companies with high lean maturity can use IFOX to maintain their lean and optimization levels. If we stick to the body fat image, these are companies that already count their calories anyway and now want to rely on a reliable tracker to stay on track. So, there’s no blanket way to say where our customers stand; we start at different levels of maturity and provide tailored support.
Our experience in purchasing consulting shows that data transparency is usually preceded by data preparation. What preparations are required for IFOX to evaluate the data?
In today’s world, data availability, quantity and quality are increasing – the need is also increasing, Corona has brought the need into even sharper focus. For IFOX, the first step requires no data preparation at all, the data can be fed in without further ado. This also means that the first results do not necessarily reflect 100 percent of reality, but rather 70 to 80 percent – but that is completely sufficient for the beginning, a clear indication is possible. In addition, at this point you also notice where the data is not good, so blind spots of digitization are shown and you can fix them. Data preparation and availability can then be further developed in parallel with the lean journey and do not have to be the focus right from the start.
Can the purchasing department specifically derive added value from IFOX support, and if so, what?
The purchasing department of course works in processes. These can be improved, but to know that you first have to look at how the department really works: with which systems, with which data. Then it becomes clear where the time is going. For example, when we recently introduced IFOX to a customer’s purchasing department, it became clear: The buyers spend 50 percent of their working time in the ERP system anyway. The data there already allows initial conclusions to be drawn: What orders are there, how are the employees working? The other 50 percent is usually spent in internal meetings – coordinating with each other, with development, with customers, or for qualification purposes. IFOX collects additional data of this kind and paves the way for optimization.
If an area is then optimized in the purchasing department, there is a completely different level of transparency: If, for example, C-parts management is to be introduced, it is ideally possible to see that the workload in the C-parts area can be reduced to transfer it from the operational to the strategic area. That would be another case where we say: Kloepfel Consulting should be brought on board here.
Mr. Blöchl, thank you for the interview!
You are interested in reorganizing your purchasing with lean management? Then get in touch now!
Contact:
Christopher Willson
Kloepfel Group
Tel: 0211 875 45323
Pempelforter Str. 50
40211 Duesseldorf
Mail: rendite@kloepfel-consulting.com