How a crisis was turned into production success

“We have increased production with over 50% despite threat of closure. If efficiency work had begun earlier, we would’ve probably seen an additional USD 110 million on our bottom line”. Per Zettergren tells us about Surahammars Bruk’s impressive journey. 

When the impossible becomes possible

Surahammars Bruk, a steel manufacturer, have done what is nearly impossible possible. By increasing employees’ flexibility and competence, production at the plant has increased from 650 tonne to 1,000 tonne of steel per operator and year. An increase of over 50%. It is an impressive achievement in a competitive industry where the threat of closure came close to becoming reality.

 

Saving a plant

The plant was a profitable and prosperous business until 2009. Then came the financial crisis that hit the world’s steel industry hard. During the 2000s the world steel production capacity doubled. China was responsible for the largest production increase, from about 200 to 900 million tonne per year. All of a sudden there was a steel surplus, despite its widespread use and application. At the same time, the financial crisis hit and major losses quickly became reality. In 2009, the plant had 235 employees. There are only 80 of them today.

These past years have presented many challenges for the plant. They have had to completely re-organise no fewer than three times. The mere existence of the plant, which had almost been taken for granted for so long, was put under increased pressure. In order to survive they needed to maximise their production using minimal labour. At the same time they wanted to look after their employees. In the past, employees had specialised in one area and worked solely in one part of the production line until retirement. Today they can do most jobs on their production line as well as work on two other lines.

– Everyone now understands that it is important to be able to perform many different work tasks, even those you are not a specialist at, says Per Zettergren, CEO for Surahammars Bruk AB. Just imagine if we had started this process in 2000. We would probably have seen result improvements of an additional 100 million between the years 2000 and 2009.

Successful reorganisation

Surahammars Bruk encountered Agerus’ concept through organisational development consultants LOVAK, and could connect the concept to their LEAN initiatives. The results were outstanding.

– In order to successfully adopt a LEAN way of working, 15% is about learning the LEAN methods and tools and 85% is getting people motivated to actually use them. This is where Agerus’ method has supported us fully. Actually, it is pretty easy to understand: all employees have to feel that they want (will), know and can do what they are supposed to do, while being given the responsibility (should) and mandate (may) to be able to do so. During the past five years we have worked with the five verbs and the basic human needs identified by Agerus systematically. We have communicated and had an open dialogue about all the changes while making sure that the prerequisites for meeting the changing assignment are in place, Per continues.

Surahammars Bruk continues its quest forward and is constantly open to adapting the organisation depending on new assignments and demands. This has become a crucial prerequisite to be able to keep the plant operating in an evermore challenging and pressured industry.

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