The POE Transformational Story

Who is POE and what do they do?

Premier Oilfield Equipment (POE) was started by an entrepreneur who recognized the growing market demand for oilfield and process piping equipment. When acquired by The Altira Group in 2012, the focus of the new ownership was to capitalize on the unique intellectual property of their hydrovac (HVAC) truck design, while leveraging a game changing partnership with Caterpillar for the sale and service of the HVAC truck throughout North America.

 


Primary Challenges

With the new partnership with Caterpillar, POE’s sales grew from 9 hydrovac trucks in 2012 to 46 trucks by year end 2013. With POE and CAT’s unique market offering to provide sales, financing, and service to the hydrovac trucks, sales continued to grow rapidly, and by 2014 POE was experiencing an exciting but daunting order backlog. Production could not keep up with sales. The POE team was excited about their explosive growth, but knew that their current systems would not be able to meet the growing demands of their customer base.

POE needed to quickly build a scalable infrastructure and operating system that addressed their near-term constraints and issues while providing the tactical and leadership capacity to increase truck output from 4-7 trucks per month to 16 trucks per month. They were experiencing a time of rapid growth, when President and CEO, Ian Dickinson, utilized the operations expertise of Definity Partners.

 


Solutions

Definity’s mission was clearly defined and the team went into the facility ready to make an instant impact to improve their operations. The POE team was involved heavily in the daily run, or day-to-day operations of the company, with little focus on improvement and growth at any level of the organization. It was clear POE needed a shop floor transformation as well as a reassessment of roles and responsibilities.

Actions

Increased predictability and confidence in the operating systems: By focusing on people and shop floor velocity, “standard work” was developed for the truck assembly line and subassembly stations that included daily measurements and goals. Communication was improved through daily shop floor huddles and web portals with key suppliers to ensure that both supply and demand matched expectations.

Developed a thoughtful assembly process: Floor leaders engaged the team to optimize the production flow and balance the workflow, continually recognizing the impacts of ongoing improvements to the work processes. The assembly team balanced the work around takt time which provided confidence in the production capacity of the current facility and an understanding of what would be required to scale to 20 trucks/month.

Empowered the frontline leaders to run the day-to-day operations, allowing upper management to focus on improvements and growth: Once frontline leaders had the tools and leadership guidance they needed to make decisions, manage critical issues, reduce daily surprises and get trucks out the door more efficiently, upper management was able to move out of the daily run. This autonomy gave the frontline leaders the confidence they needed to lead their teams with authority and allowed upper management to focus on improvements and growth.

Shifted and trained the team to transition from a very reactionary work environment to one where they plan and optimize: “This was the hardest, but most rewarding experience of my career. The hardest part was the cultural shift. When I think back to how we were prior to the engagement, it amazes me how far we have come in such a short time. It was a major shift from ‘I will get it to you in a few days,’ to ‘you will have it by Wednesday.’ Our team’s culture was good before Definity came to help, but now with the new measurements and accountability in place, we have all stepped into our roles and truly feel responsible for the success of the company. It’s a great feeling to have and a great way to run a business,” stated Plant Manager, Brandon Buchleiter.

Created a structure and systems around parts availability to the line: It was not a surprise based on how quickly the business had grown, that POE had an informal process for ordering materials based on need in place when the work began. The supply chain need was two-fold. First, a scalable supply chain was developed that could improve the situation near-term, and second, robust supply chain partnerships were designed to provide long-term incremental value to the business.

“As the CEO I always had the sense that I shouldn’t be in the weeds, but I soon realized managers shouldn’t be either. The transformation was sustainable and I am astonished at how much progress we continue to make every day. Although we had a tremendous ROI in terms of bottom line improvement and ability to manage customer demand while increasing our run rate 190% in less than a year, the excitement from the cultural transformation was the most rewarding part of this entire experience. To see the pride, the passion, the results, the quality, the feeling of accomplishment and the sense of ownership that is apparent in the employees now, that is what made the entire process worth it,” stated Ian Dickinson, “Two guys, twelve weeks, twenty trucks, transformed our business.”


Results

• Increased yearly run-rate by 190% in less than 6-months

• Increased truck throughput by 65% during a short 3-month improvement focus

• Increased capacity to build up to 20 trucks per month with capabilities of 30 trucks per month

• Developed new supportive and engaged corporate culture with strong accountability, predictability and satisfaction from employees

• Expanded supply chain capabilities to permit confident execution of existing product line and provided capacity for the development of new product lines

• Developed key resources and improved processes to enable Shop Leaders, who were previously critical to the daily run of the business, to spend their time on improvement and growth initiatives

• Shifted top level executives primary focus from daily production activities to developing relationships with key clients, exploring market trends and needs and other growth initiatives and strategies