Seitz Group: Increasing efficiency through Lean Management
Seitz makes valves for various industries, including PET bottle production and nuclear power plants. Four years ago, the company made the decision to keep its production facility in Switzerland despite tremendous cost pressure. CEO Andreas Steiner tells us what actions were taken to boost efficiency following that decision.
Five years ago, Seitz was facing financial trouble. Why was that?
We had invested heavily in hydrogen valves for the automobile industry, but our bet didn’t pay off when the industrial trend headed in a different direction. At the same time, we had somewhat neglected other areas. The cumulative effect of those two actions put us in a difficult situation.
How did you react?
We had to ask ourselves some strategic questions: Are all of our business units still a good fit for us? Should we continue producing in expensive Switzerland, or move abroad? It turned out that Switzerland is the most efficient location for us to have our production.
Lean management often generates its own momentum. Suddenly, everyone is seeing even more room for improvement everywhere.
That is surprising. Could you explain that?
We managed to heavily automate our production facility. In particular, we invested in robotic systems that not only fit the machines with parts, but also retool them. That way, we can manufacture a different model without manual intervention. Despite the automation, we did not have to cut the number of employees, because we now also make the parts ourselves that we used to procure from suppliers.
In 2011, Seitz received the Swiss Lean Award. What part of the award was lean?
The “lean” refers to production, so the award was for having lean production practices – in other words, preventing waste. Switzerland has been an expensive country to produce in for a long time, and Seitz realized early that efficiency is the key to securing Swiss jobs. The fact that our production process was already designed to be lean even before the European debt crisis was a tremendous help to us. Otherwise, the strong Swiss franc would have affected us a lot more.
Is your production plant the only part of your company that works according to lean criteria?
Most people refer primarily to production processes when they used the word “lean.” However, the lean methodology does not have its full effect until all areas of the business are involved. Right now, we are restructuring our offices according to lean practices. To this end, we have appointed a number of employees as lean coaches. They attend classes, devise measures, and then get their coworkers involved. Lean management often generates its own momentum. Suddenly, everyone is seeing even more room for improvement everywhere.
Can you give some examples?
Until just recently, it was taking us way too long to produce prototypes. We then analyzed the entire process and counted a total of 149 steps. Through more rigorous planning of the production process and eliminating unnecessary steps, we managed to cut the production time roughly in half.
And what about administration? What does lean look like there?
Order is important in that area, as well, because having to look for things is a form of waste. I used to have various stacks of folders on my desk. Today, everything is within reach and divided into three categories: things I use daily, weekly, and monthly. Everything has its assigned place. If anything happens to me, my deputy can immediately find what he needs.
Hopefully, that won’t be necessary. But your successor was announced just recently. What changes are about to take place at Seitz?
For the time being, none. But over the medium term, Fabian Seitz, the son of our company’s owner, Urs Seitz, will be taking over my function. I already knew that when I was hired. Fabian Seitz is currently earning his stripes outside the company so that he will possess the necessary skills when it comes time to assume his position as CEO.