The Cristian plant in 2016: a new ENCO approach
How to optimise the Cristian plant's production capacity by focusing on the products our customers request the most? This is the question that led to the reorganisation of our manufacturing activity strategy.
Until now, we used the Make-to-Order system for export. Sometimes the required volumes exceeded two times the production capacity of the plant, and problems appeared when we could not cope with the demand during peak periods. “From now on, we are spreading the production activity more over the year”, explains Bogdan Iancău, Cristian Plant Operational Manager. “In order to achieve this, we have changed our export strategy and use the Make-to-Stock system during low demand periods to create security stocks for export in anticipation to the season. These will concern only the fast movers, in order to ensure a better turnover of our stock.” So we decided to work with our logistics provider for Romania, DB Schenker, to manage the inventory flow, so as to improve the quality of service, now for exports.
This new mode of operation has two major advantages. The first is that we can ensure a higher production level. The Cristian factory has a production capacity of 2,500 MT of lubricants per month, which means 30,000 MT per year. In 2015, order-based production led to a factory result of 22,000 MT. We could, therefore, increase our annual production by 36% to ensure the required volumes during peak hours. The capability to linearise our factory production will benefit our suppliers and will have a positive effect on the availability and quality of our main products. We also want to increase and reach our production capacity in order to reduce continuously the break even of our operational costs, so that factory savings will balance out any increase in logistics costs.
The second advantage is the increased reactivity with which we can respond to our customers' orders and maintain a good SAT. Indeed, with permanent stocks in the Bucharest warehouse and longer working hours, our delivery capabilities will be greatly improved. “Both the export and the domestic market will benefit from this system, having increased security stocks, says Bogdan Iancău. And we hope to lower the delivery time to two weeks, compared to four in 2015. Already, deliveries to TOTAL Bulgaria and TOTAL Hellas leave from the DB Schenker warehouse and not from the Cristian plant. We intend to implement the same system to other export destinations, as well.”
Cristian Plant Operational Manager