FILL Case

FILL is a small manufacturing company that produces custom-made machines for the bottling of both
cosmetics and food products. FILL operates in the B2B market: their customers are subcontractors who
bottle on behalf of major companies operating in the two sectors and operates at the international level
(China, India, Germany, Italy, USA). FILL produces four types of machines: washing machines (very
standard machines aiming at washing and sterilizing containers or bottles), fillers (machines with some
customizable variants aiming at filling containers), labelling (machines that put the labels on containers)
and capping (highly customizable machines, aiming at closing the containers). FILL has 65 employees and
a turnover of € 15 million. The company has rapidly grown in last 15 years, gradually expanding from
domestic to international markets thanks to quality, customization and innovativeness of its products. The
market has changed in the last years, with the recent entry of Asian producers focused on high-quality
market, but significantly lower prices; indeed, FILL has gradually shifted the critical success factors towards
higher service level and shorter delivery times.

The company has a simple organization; family owners cover the key role supported by people working in
the company since its foundation and who enjoy the full confidence of the owner-entrepreneur. In
particular, there are a Sales Department, a Design Department, a Production, Logistics and Purchasing
Department, a Quality Department and an Administration Dept. Recently, two employees have been hired,
respectively focused on Human Resource Management and ICT. Production activities are split in three
different plants, respectively specialized in the production of filling machines and capping machines,
washing machines and the complete system (including labelling). The company has recently obtained ISO
9001 certification; however, the processes reported in the quality manual are seldom known by employees.
The small size and mutual understanding among the key people in the company ensure that the required
information is exchanged informally, quickly and effectively. In addition, most of the employees has
developed over the years an in-depth knowledge of production processes and technical issues, and this
greatly facilitates coordination. Finally, for complex problems as well as key decisions, employees are asking
for the owner’s support, who is always present in the company and in the production sites.

The launch and implementation of the commissioned contract are performed as follows. The order is
launched by the Commercial Department, in charge of getting in contact with the customer, collecting
both specific requirements (either system or machine) or modifications of existing machines and preparing
a quotation. The single order may consist of a single machine or in a whole line (+ filler + washing +
labelling). Customers can request customization on specific machines: customizations can be related to
space constraints - to better adapt the machines to the production space given that cars are very
cumbersome – or can be related to country regulations - to meet the standards of the countries where the
FILL customers have production facilities. Thus the Commercial Department is often involving technical
experts of the Planning Department to define the technical specifications of the machine or line. During
negotiation activities, Commercial Department should also get in contact with the Production Director,
who is also involved in production planning; the Production Department is in charge of defining a realistic
delivery time, to communicate to the customer. This choice, as mentioned before, is fundamental because
the velocity is one of main critical success factor, along with customization. When the order is signed, the
Commercial Department generates a specific order document, to simultaneously send to the Planning
Department - in charge of the detailed draft of the machine/line ordered and to call components by the
warehouse - and to the Production Department – in charge of scheduling both production and assembly.
In the meanwhile, when the detailed draft by the Planning Department is ready, it is sent to the Production
Dept., which is responsible for calling components in the warehouse and assembly the finished machines.
El departamento comercial se encarga de hacer la propuesta e involucra al equipo de planning y produccion por cualquier cosa especifica que quisiera
el cliente, luego el equipo de planning hace todo el diseño y se lo manda a produccion. Una vez que la maquina esta lista se hacen tests con el cliente y
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se modifica lo que necesite. Finalmente se manda al site del cliente y los tecnicos van a ensamblarla. El servicio post es informal: el cliente se
comunica con el tecnico o con el comercial
When the machine is completed, the customer is called for final test of the finished machine. During the
test (involving technicians that performed the assembly activities and a technician of the Planning
Department), the team would take notes of some possible modifications to implement. Once implemented
these changes, the machine is dismantled, packed and shipped at the production site of the customer. The
same team of technicians, who worked to build the machinery - goes to the customer's production site to
reassemble the machine or line. This often determines a capacity problem, because for several days, difficult
to estimate in advance, these people will not be available for the construction and installation of the
machines ordered by other customers.

The post-sales support is handled informally: in case of any problem, the customer gets in contact with
either the technician that was present at the acceptance tests or the commercial reference that acts as an
intermediary in turn contacting the Planning function.

Over the past five years, FILL has grown and has almost doubled the number of annual orders. This rapid
growth has resulted in several problems in satisfying the delivery times because the entire production of
FILL is on delay. For understanding the causes of these delays, the team has realized a thorough analysis
of the order management process and the following issues were identified:
• Production function is not able to develop realistic estimates of delivery times during negotiations of
the order, because takes into account only the actually closed orders and not those still under
negotiation; moreover, it is very complicated to predict in advance how many operators of the
Production Department will actually be available, since the technicians are travelling to customer sites
with a short notice;
• Very often, the components to complete the machines are not available in stock and so assembly
technicians should wait for the parts to arrive;
• Not all the orders are equal in terms of complexity: the orders of a whole line are obviously more
complex than those of a single machinery. Moreover, customers are strongly heterogeneous based on
the geographical location: usually Italian, German and Chinese customers are very demanding thus
requiring many product variants but Indian and North American customers usually have a lot more
standard demands. In spite of this variance, all the orders are processed exactly in the same way;
• The numerous delays determine the need to set priorities for the orders, accelerating some and sending
others in further delay. These decisions are made with little information available and in an
unstructured way, not necessarily following criteria related to the importance of the customer, the
order, the value of the order or the cumulative delay until then.