Midagon helped Valmet Automation design and implement a comprehensive operational management model, leading to significant efficiency and transparency improvements in intralogistics.
Valmet Automation was experiencing significant challenges in managing its outsourced intralogistics in Tampere. While outsourcing these operations was intended to boost efficiency, it led to an operational gap — there was no day-level management model in place to oversee daily activities effectively.
The lack of visibility meant that key transactions were not consistently recorded in the ERP system, making it impossible to track vital KPIs, such as lead times. Additionally, the number of daily working hours was disproportionately high compared to the volume of processed transactions.
"We needed an external expert’s perspective on the challenges in our collaboration with the logistics operator. Working with Midagon was easy, as the persons' chemistry within our project team members was fluent. The project followed a sprint model, which brought its own scheduling pressures, but Midagon’s systematic and proactive approach was instrumental in making the project a success."
Midagon’s consultant stepped in to lead the design and implementation of a comprehensive operational management model tailored to Valmet’s specific needs. The strict timeframe of just a few months during the first half of 2024 made it crucial to collaborate closely with both Valmet’s and the 3PL service provider’s teams.
The work focused on the following key areas:
Established a Daily Operational Management Model: We introduced a structured management framework for overseeing day-to-day intralogistics operations. This allowed clearer roles, responsibilities, and accountability, ensuring smoother workflows.
Transactions into ERP punctually: By ensuring that all transactions were consistently recorded in the client’s ERP system, we made it possible to measure important KPIs, such as lead times, and track performance across the board.
Revamping the Inbound Process: Through comprehensive 1-1 interviews, inbound was selected as priority number 1. We re-engineered the inbound logistics process, simplifying it significantly. Clear roles and responsibilities were assigned within the management framework, streamlining operations and reducing unnecessary complexity.
Optimised Labor Efficiency: We conducted an in-depth analysis of the existing workflow and labor allocation. This enabled us to significantly reduce the number of working hours required per transaction, improving overall efficiency without compromising on service levels.
Introducing a day-level operational management model with on-time ERP usage allowed Valmet to regain control over its intralogistics processes. They now have accurate, real-time data on their KPIs, such as lead times, and have drastically reduced the working hours spent on each transaction.
According to Marko Lintula, Valmet Automation’s Head of Tampere Supply Chain, the results speak for themselves. Following the implementation of these changes, Valmet Automation has already seen significant improvements in both cost and operational efficiency:
Cost Savings: By H2/2024, Valmet is expected to reduce 3PL costs by 20% compared to H1/2024.
Reduced Lead Time: The inbound process lead time has been shortened by 75% in Q3/2024, compared to H1/2024.
The way forward: The success and swift results within the inbound logistics operations created a good foundation for continuing logistics process improvement. The next steps after inbound re-engineering, both in the short and long term, are already clearly defined.
Director, Process & Manufacturing Industries