FCI

Timeline

Top Competitors

Becoming a Global Player

• FCI was founded in 1988 in Pennsylvania by Framatome, a nuclear engineering firm that build nuclear power plants.

• Over the years, FCI increased their international presence through external growth, by acquiring almost 20 companies in 20 years.

• This made them the largest connector manufacturers for carios electronis.

• In November 2005, FCI was acquired by Bain Capital, a private investment fund which focued on acquiring industrial and techonolgy companies worldwide.

• FCI operated in Asia, North and South America, and Europe.

• FCI was a centralized organization where most of the directors were French and were based in France, while the fastest growing market was in Asia, notably China

Pirre Vareille

• As Bain Capital wanted a new CEO to devise and implement FCI's transformation for value creation, they hired Pirre Vareille.

• Pirre Vareille was currently living in France.

• When he was hired by Bain Capital/FCI, he knew nothing about the connectors industry or the companys history, but his career path from plant manager to CEO had taught him one key lesson:

"Never get too much information in advance nor focus on the past. Keep an element of surprise. Keep the focus on the mission to transform the company so that it can adapt the the future."

• Durng his first two months as CEO, Pierre visited each of the 24 plants and R&D centers around the world. He came to the same conclusion after each plant visit: The connector market was changing.

• Pierre learned that traditionally, the American and European major players had focused on innovation.

• As connectors were commodity products, company differentiation and success came from innovation rather than operational capabilities. Hence, operational excellence was not veiwed as a key succes factor in the industry.

• He also learned that new entrants were changing the market.

• He concluded that FCI's structure lacked flexibility - the ability to face the upcoming challenges.

• Pierre created a new vision for the company's future in march 2008, during a seminar in Singapore:

"Our goal is to become the benchmark in the industry in terms of market share gain, sales growth, profitability, and people empowerment"

• Pirre decided that the best way to live out this new vision, was to implement lean manufacturing. Pirre believed that Yves Merel was the man to get it done.

• Customer Focus - emphasized quality and customer satisfaction

• Supplier Development - Training supplier to FCI's standards

A Strategic Plan

• Lean Manufacturing - Strategic objectives within operations

• The strategic plan that should cover the next four years was presented to the shareholders in July 2008.
• Designed to promote long-term value within the company
• Based on five key cross-functional and mutually-reinforcing initiatives, led by the corporate headquarters, with its own visual identity and target.

A Strategic Plan

• Lean Development - Boost engineering efficiency

• People Empowerment - Highly skilled people for implemtation

Organizational Change

Key Performance Indicators (KPIs)

Lean Initiative

Achievements by December 2010

• In 2010, despite the economic situation, FCI maintained their strategic plan and the lean operational implementation.
• Because of the continuous implementation efforts, lean was now recognized as part of FCI's culture by every employee around the world.
• The lean implementation was a success because of the new vision, along with the buy-in from Bain capital and the implementation excellence of the teams. However, Pierre knew that there would still be many future challenges for the company.
• Pierre stated:

" We can be satisfied by the job accomplished, especially knowing where we came from"

"But Yves, you and I both know that many challenges still lie ahead. The parameters of the equation we are trying to solve using lean are constantly changing"

• The lean initiatives and Pierre's constant strive for perfection, led FCI's estimated market value to double.

Short about case B

• Describes how the lean implementation effected a plant in China and what challenges they experienced, and furthermore, how the plant handled it.

• The workers had a hard time understanding the need for the lean implementation, why they implemented a visual management board showing the corporate KIPs for each production line. To help the workers understand the need and impact of the lean implementation.

• The corporate KPIs for each production line:
• Safety
• Quality
• Productivity
• Service level

• Management routines for each work team, and they included:
• Shop floor operators were 20-30% more present at the shop floor
• Supervisors
• Engineers

• However, the stop-at-first-defect mindset was very difficult for people to adapt and hence difficult to implement.
• As more workshops were organized on the shop floor, the staff developed a deeper understanding of lean.

• The lean improvements were seen as a great step forward for everyone and it allowed productivity gains by eliminating obvious sources of waste.