Saltigo’s Way Forward’ Project Focuses on Optimized Project and Cost Management
Optimization About a year and a half ago, Saltigo, the globally active custom synthesis business of Germany-based specialty chemicals group Lanxess, launched the "Saltigo Way Forward" project focusing on the optimization of project management and production planning and preparation procedures. Michael Reubold asked Saltigo's Managing Director Wolfgang Schmitz about the progress the project has made so far.
What was the starting situation when launching the "Way Forward" project in 2008?
W. Schmitz: In 2008, we reviewed the progress we had made since the formation of Saltigo. In this period we had undertaken a tremendous amount of change within the organization, changes necessary to establish a stronger financial position and an equally necessary shift in our customer base from our traditional origins into the wider market place. What was clear to the management team was that our success to date and our future business model relied heavily on our continuing success in project acquisition and delivery of all projects on time in full.
What was your initial approach back then to ensure this kind of project excellence?
W. Schmitz: We asked ourselves "How do we better serve our customers?" and from that point on we developed a program to analyze how we performed, what were key elements to our performance and most importantly how do we continuously improve. Excellence in project management was quickly identified as the cornerstone for a successful business at Saltigo and this process encompasses many important activities throughout our organisation. Identification of these contributing activities formed the next part of our workflow assessment along with a vision of how to involve everyone in this initiative.
Which instruments did you apply to create the foundation for the systematic optimization of project procedures?
W. Schmitz: Preparation for the task in hand is essential for the success of any activity and so we spent several weeks gathering data and brainstorming to establish the key activities on which to focus our efforts. Finally this ground work was completed and work programmes agreed along with timelines and resource levels.
Our goal was to encourage simplicity of processes while also incorporating a rigorous, consistent and frequent appraisal of the status of each and every project. The starting point to each new project is to establish the clear needs of the customer and then work back with an action plan to deliver the project on time in full.
Every project has many different requirements and numerous individual activities interlinked and thus even minor problems with one activity can have significant impact on subsequent activities leading to unwanted and unnecessary delays. The main question we try to instil in our teams is: "Is the project on track?" and if not, "What is the reason?" and most importantly "How do we get back on plan?" What we strive for is transparency of performance, seek solutions not problems and clear and open communications both within the organisation and with our customers. No surprises!
How did the improvement targets differ for pharmaceutical and agrochemical industries and non-life science segments?
W. Schmitz: This is a good question, and it is an area which we needed to consider very carefully. In summary we identified that for commercial projects the basic needs of all market sectors were in fact very similar. Our customers wanted a reliable supply chain with competitive pricing whilst ensuring highest quality standards. Today many of these commercial projects are produced under long-term supply agreements. They incorporate a framework in which strategic investments can be made to ensure products can be produced in a most cost effective way and in the volumes and daily rates which enable our customers to maximize their market potential and position.
These enhancements in production capacities often involve significant capital investment placing additional challenges on both organisations .This requires a high level of trust and full transparency of the project milestones and implementation.
However, the biggest difference we have observed between these markets is the major changes encountered in the pharmaceutical market, in particular for supply of products for early clinical phases trials. This segment of the market has become highly competitive with respect to pricing but also increasingly demanding with respect to project timelines and response rates. In addition, to participate in this arena it is important to develop a sizeable portfolio of pipeline projects to manage high attrition rates and increasingly extended timelines to commercialization. Thus, we needed to realign resources to provide a much more responsive and flexible service whilst also trying to manage a greater number of smaller projects. This required both simplification of the assessment of opportunities and more detailed planning of project milestones to ensure maximum speed once production is initiated. Once again, good planning is a key to success but market expectations continue to increase and bring new challenges for our teams.
What results with respect to project procedures and their economic efficiency have you seen over the duration of the project so far?
W. Schmitz: We already are very pleased with several aspects of the results from this initiative and it is important to note this is an ongoing programme which we will evolve year on year to provide more sustainable supply chain solutions for and with our customers. Looking back across 2009 it is very encouraging to report we were able to establish a system in which the economics of each project is much better understood within our organisation and our teams. This knowledge has enabled us to further focus improvement targets within the supply chain whether it be raw material sourcing, process yield improvements or reactor productivity per day. In addition this approach has enabled us to develop a proactive improvement dialogue with our customers including project life cycle visions, which have been well received.