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Vaillant Group Case Study

Vaillant Group’s Belper operation relies on Kronos and SAP to drive efficiency, maintain margins and improve productivity

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With approximately 13,000 employees and a sales turnover of around 2.4bn euros the Vaillant Group develops and manufactures ventilation, air-conditioning and heating technology products throughout Europe and sells them in more than 80 countries.

Today, the final assembly plant at Belper in Derbyshire is a highly efficient plant, with domestic boiler production in 2008 & 2009 surpassing its annual production record of more than 400,000 units (and still growing).

The Belper manufacturing site is recognised as a Centre of Manufacturing Excellence throughout Europe, with the highest possible manufacturing credentials, including the renowned ‘Quality Management System’ to BS EN ISO 9001:2000.

  • Absence levels at 2.8% are falling year-on-year and down from 4.1% in 2006
  • Planned labour requirements reduce overtime costs
  • Ability to identify all non-productive time on the shop floor
  • Supports JIT, Kaizen, Lean and TPM
  • Invaluable support for continuous improvement programme at Vaillant Group

Kronos at Vaillant Group, Belper – driving efficiency

Kronos has played an increasingly strategic role at Vaillant Group’s Belper site since 2003, where the system has evolved over time in both its functionality and in the variety of ways it is used at the plant.  Allan Harley, Continuous Improvement Manager at Vaillant Group explains, “What started as a system to monitor employee working time for payroll purposes has evolved into one of the platforms for ensuring that the plant is run at optimum efficiency. We rely 100% on two core systems at Belper to drive efficiency, maintain margin and increase productivity – Kronos and SAP. “

Vaillant Group manages both its own employees and contract employees with the Kronos system.

Operating lean production practices

Operating lean manufacturing practices as part of its continuous improvement programme is helping Vaillant Group to overcome the challenges in the domestic heating market – where the overall market was down by 5% in 2009, yet Vaillant Group grew its UK sales volumes and market share levels.

Today, most areas of the Vaillant Group business rely on real-time workforce information from Kronos to drive efficiency at the plant, from HR and payroll to logistics, assembly, manufacturing and maintenance. In every area, the business requires employees to be working in the most efficient way possible in order to meet increased demand for boilers, without compromising quality or increasing costs.

 “Keeping a real-time track of employee time is vital to managing your workforce effectively”, comments Allan Harley, “Without a sound workforce management system you could be wasting time and money and missing opportunities to improve your bottom line. Knowing where everyone is and what they are doing is essential. With Kronos we could potentially monitor shop floor activity on a minute-by-minute basis.”

Vaillant Group operates with a Just in Time (JIT) inventory strategy, with average stock held for only 12-14 days, and boilers are made to order, rather than for stock.  With increasing number of boilers being assembled every day (each consisting of in excess of one hundred and fifty separate parts, some of which are produced on site), it’s imperative that component parts are readily available, which in turns means that procurement staff need to be available to purchase stock, and logistics staff available to warehouse it and deliver it to the shop floor. Kronos forecasts and highlights any gaps in staff availability to ensure that there are never any hold-ups or bottle necks in the supply chain.

The plant also operates a Total Planned Maintenance (TPM) policy, with regular, planned maintenance of machinery to avoid unnecessary downtime and reduced production. Here too Kronos is used to ensure that maintenance staff are always available when required.

Understanding productive and non-productive time

Understanding the true cost of production is only possible when you are in a position to understand the amount of time and materials that directly contribute to the production of the end product.  Vaillant Group uses Kronos to monitor all employee activities on the shop floor to better understand the amount of direct and indirect time worked.  When employees are not directly working on boiler assembly, they are required to log their working time against a variety of pre-set codes, which include such things as, union meetings, waiting for parts, health and safety briefing, machine down time and waiting for maintenance.

Allan Harley explains more, “All non-productive time means fewer boilers off the production line, so it’s imperative that we know where the time goes.  With Kronos there’s absolutely no guesswork around ‘lost ‘time and as a result we can analyse the lost hours and work hard to reduce them in the future, so continuously improving processes at the plant, driving efficiencies and increasing production capacity. Using Kronos we’ve identified previously unaccounted for training time and down time due to supplier problems.” and successfully addressed these and other issues.

Lean thinking requires time standards

Lean thinking needs time standards, without which many major decisions would be little more than guesswork. At Vaillant Group, time standards in SAP convert production capacity into the number of minutes required to assemble a boiler, to paint panels and to manufacture parts. These minutes convert into hours in order to accurately assess how many employees are required to meet production demand. Kronos data is then layered across the required manpower data to highlight potential employee gaps – where available labour falls short of what’s required - this can be as a result of planned holidays or perhaps employees on long-term sick.

“Kronos also polls its historical records to estimate how many employees might take time off during the World Cup for example,” explains Allan Harley. “This combined intelligence from Kronos enables us to accurately plan labour requirements well into the future – giving a precise figure for the number of contract employees required to fill gaps and enabling the organisation to plan labour requirements more effectively without relying on costly overtime and weekend working.”


Tracking leave requests helps production planning

Managing employee leave requests means keeping employees happy and at the same time understanding the impact that absence can have on the Vaillant Group business. The minimum time required to train a temporary employee to cover holidays is two weeks, and it takes three months to train somebody up to the required level to work across all assembly tracks.  The company uses Workforce Timekeeper, to ensure that the organisation has an accurate view of the potential gaps in labour and skills across the year, and has sufficient time to call in and train additional, flexible workers or move existing employees within the business. Kronos holds all holiday information, calculates leave taken and remaining, and is used to populate the manpower planning tool to identify gaps in labour requirements.

Proactive absence management

The next phase of Vaillant Group’s system development will be the introduction of Workforce Attendance from Kronos. Allan Harley explains what the new module will bring. “We already have a remarkably low absence rate of 2.8% at Vaillant Group – significantly lower than the national average of 3.7% in our sector, but Workforce Attendance will help to pro-actively manage absence by pushing timely and relevant information to those people that need it. Weekly half-hour managers meeting with 12 attendees to discuss future manning levels, training requirements, planned and unplanned absence can be reduced to just one 30 minute meeting per month. Which allows managers to spend more time in the business and on the shop floor.

We’ll continue pushing our Kronos system to drive efficiencies at the plant and to aid JIT, Kaizan and lean initiatives – Kronos is one of our major metric recorders for Industrial and has resulted in year on year improvements on manning efficiency, improved training, better understanding of seasonal effects and gives us greater transparency into how staffing levels are linked to business need. It’s an incredibly stable system and is one of the pillars of our success,” concludes Allan Harley.