Amer Sports is a sporting goods company with internationally recognized brands including Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson, and Precor.
They sell their products directly to consumers through brand stores, factory outlets, and e-commerce as well as through trade customers in sporting goods chains, specialty retailers, mass merchants, fitness clubs, and distributors.
We worked with Amer Sports to create a new strategy that would better match the true needs of their customers while reducing rework and work-in-process inventory.
Production planning methodology needed to be revised to match customer needs
High amount of capital tied up in FG and WIP inventories
Defect percentage in raw material, volume of scrap, and in-process defects
Organizational structure alignment to strategic needs
We began by building a new planning methodology based on the needs of internal customers for each process. This can be summarized as operation-based production planning via a pull system. We accomplished this through linking information dependencies and allowing processes to update and collect information as other processes performed their tasks.
During this time, we optimized value-stream flow by creating a self-management system through which support could be autonomously signaled for any bottlenecks that may occur. We designed and deployed incentive systems for the employees, which guided them to collaborate together in order to achieve organizational effectiveness rather than just their own process efficiencies.
We redefined all roles and responsibilities, including organizational reporting lines and the organizational structure, to streamline the escalation of problems. These streamlined structures provide clear pathways from the frontline employees to the top leadership team. Ultimately, our management systems and our design of the quality gates used for the elimination of defects have been huge triumphs by giving accountability to raw material suppliers for the quality they supply to the factories.
62% of working capital cash was freed up for other needs. This was accomplished by transitioning to a pull system, which replaced the previous method of planning based on forecasting. The reconfiguration of Amer Sports’ production cells to a multi-skilled focus allowed the company to free up key labor to train further employees on key skills. This empowered the business to expand its knowledge in ski making, giving machines much more availability in volume and mix of products. Our efforts were rewarded with a savings of hundreds of thousands of euros per machining and assembly area, per year, for multiple of machines. This savings has released millions of dollars of cash annually for the business to invest in other developments.
In-process defect detection has increased by 50% and rework due to quality issues has been reduced by 35%. This most positively affects costs but also throughput and speed. In all, we increased capacity greatly, reduced working capital by multiples, and reduced manufacturing lead-time by half. Our efforts here are ongoing, and we will see continued improvements overall.
Top leadership now has clear understanding of how to cultivate cost reductions and employee engagement. The foundations of visual management and visual escalation systems are instilled in the business. Our design of a centralized electronic business KPI dashboard has supported the vice president to share positive results across the entire organization.
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Jun taught us to always work directly where the value is created. He engaged all the frontline leaders all the way to the top leadership team of the business.
Lean Manufacturing and Project Manager, Amer Sports