Strategy & Management

Operational Excellence in Custom Manufacturing

Continuous Improvement as a Fully Integrated Competitive Advantage

18.05.2022 - ESIM Chemicals provides customers with sophisticated and flexible specialty chemical synthesis outside their own facilities and continuous improvement from the initial synthesis onwards.

Custom manufacturing today fills an important gap in the business model of companies in the chemical and pharmaceutical industry. It lends itself to products that are in the growth phase and cannot be accommodated in in-house facilities without greater expense. This requires that the synthesis service provider is able to guarantee the agreed product quality in a given time. For products that are in the growth phase (design-for-implementation), continuous improvement in the sense of operational excellence is an advantage.

As a company located at the Chemical Park Linz, Austria, ESIM Chemicals has an excellent infrastructure at its disposal. This enables us to provide customers with sophisticated and flexible specialty chemical synthesis service outside their own facilities, while at the same time achieving continuous improvement from the pilot production onwards.

Lean Six Sigma as a Touchdown Point

ESIM Chemicals is a company that has been active in the business of agrochemicals for more than seven decades and offers exclusive high quality contract manufacturing. In some cases, very complex products with more than 5-7 synthesis steps are produced. The initial production in batch operation is usually aimed at producing the product desired by the customer within the specification with the target yield (input factors of the raw materials). All subsequent campaigns are then regularly optimized in terms of output (daily output for a given reactor size), yield and energy input to give the customer the greatest possible advantage. This is supported by an automated performance management system. We draw on the diverse toolbox of lean management as well as the Lean Six Sigma methodology (LSS) and have adapted these to our DNA. What is meant by this?

For about 15 years, employees at ESIM Chemicals have been trained internally both as Lean Six Sigma Green Belt and Lean Six Sigma Black Belt. Through our own Master Black Belt and the respective projects, they are trained on the systematics and introduced to the basic ways of thinking. These Green and Black Belts (GB/BB) are trained in all departments, are the process experts and thus spearhead the continuous improvement of business processes. We constantly adapt management and support processes to new customer needs along the product life cycle.

The aim of the system is to replace deviation management with a preventive and proactive system and thus identify errors as early as possible in process development and prevent them before production starts. Customer requirements are analyzed in detail in advance and translated into measurable key performance indicators (KPIs). Through a risk management system, risks are reduced by means of measures in the various stages of product development. Very often, these risks can also be effectively reduced by means of automation or digitalization.

Organizationally, the Operational Excellence (OpEx) team is integrated into the general Operations area, so there is no separate OpEx team that can be "requested" for questions. All GB/BB are part of the overall organization and thus directly part of the solution. This gives us the opportunity to manage smaller sub-projects in a structured way.

At the beginning of the 'OpEx era', it was necessary to change the previous attitude of the employees, i.e., to take responsibility for a project or sub-project. The basis for any improvement is data, which becomes information, i.e., KPIs. At ESIM, there are predefined KPIs for each business process, which are adjusted annually to changes. These KPIs are visible to every employee at all times. This transparency encourages employees to take responsibility and to ask themselves these three questions, which are anchored in our DNA:

  • What is the problem and how big is it?
  • What are the root causes of the problem?
  • What are sustainable solutions to the problem?

Projects with moderate complexity are translated into activities by means of an action plan. Complex problems are worked through with a Lean Six Sigma project using the DMAIC (fig. 1) phases with minimum requirements.

The long-standing success of the implementation of Operational Excellence at ESIM Chemicals is based on the fact that the "LSS language" is used consistently in all areas and intensively in technology, engineering and production. From the first discussion of a TechPack (technical information package provided by the customer as initial information), over the implementation of a product in the plant, to the optimization of processes, we apply the same approach and LSS-based systematics. The customer is closely involved along the way and therefore knows exactly where we stand. There are no surprises, as this consistent and systematic implementation leads to a real win-win situation.

Implementation of Customer Requirements in Practice

ESIM has taken over a product for a large supplier of plant protection products that was already manufactured on a production scale but had to be significantly adapted to the conditions at the Linz site concerning wastewater. In addition to a significant increase in production output (daily output), the customer also expected a minimization of the use of raw materials and energy. The following points contributed to the fact that even the pilot campaign was a complete success:

  • Transfer of all experiences of the client using an LSS questionnaire,
  • Error prevention through proactive FMEA analysis with several hundred resulting action points for processing,
  • Implementation of a high level of automation in our process control system (sequences) and evaluation of all available measured values, already during the first batches of the pilot campaign.

Result: quality always "right first time", yield increase by 5-7% and increase in daily output by 35% (depending on campaign size).

From a Reactive to a Proactive Approach

In the custom manufacturing business, several products are produced in parallel and sequentially in different modes in the same production plant, so that the entire organization has to react very flexibly to the production schedule. In concrete terms, this means that employees have to perform different activities with different specifications in one and the same piece of equipment. This has to be done in the different operating states such as set-up, production and cleaning. In this complex environment, it is easy to understand that employees need to have a high level of training in order to be able to manage the activities without making mistakes. For this purpose, we have developed a tailor-made training program, which is divided into three levels: OpEx Basic Training, LSS Green Belt and LSS Black Belt. With this development program, employees are motivated through empowerment so that they can solve even difficult problems and identify opportunities, which in turn is necessary for achieving customer goals for the future.

Experience: With more than 70 years of experience, ESIM Chemicals is the partner for tailor-made services, with a focus on the exclusive production of high-quality intermediates and active ingredients for our partners.

Expertise: Our highly qualified and competent experts have years of experience to efficiently implement the visionary ideas in chemistry.

Excellence: ESIM Chemicals supports its partners in maximizing value creation by providing high quality services and optimizing operational efficiency.

We are supported in this by a fully integrated Lean Six Sigma methodology and its uncompromising implementation.


Michael D. Hoffmann, COO, ESIM Chemicals, Linz, Austria

Martin Schnellendorfer, Head Continuous Improvement, ESIM Chemicals, Linz, Austria


ESIM Chemicals GmbH

St. Peter-Strasse 5