2024
A packaging group in Borås
1,100 people, three plants
Should we build the second plant?
The order book was full and the five-year plan had a €38 million plant in it. The capacity turned out to be in the building already.
Client
A corrugated-packaging group
Practice
Operations and footprint
Partner
Ingrid Malmberg
Length
6-week diagnostic, 5 months of implementation
Result
23% more output, no new plant
A print line mid-changeover, Borås
The question, taken apart in week one
The page we wrote on the first day, and what each hypothesis turned out to be once we had the numbers.
Exhibit 0 · Should we build the second plant?
ConfirmedPartlyRuled out
The question
Should we build the second plant?
Operations and footprint
Part 1
Is the demand real, and is it ours?
- The forecast assumes share we are already losing.Ruled out · share held in every region
- Two customers make up most of the growth.Partly · three customers make up 46% of the growth
Part 2
Can the first plant do more?
- The bottleneck is changeovers, not capacity.Confirmed · 95 minutes per changeover, 40% of lost time
- A third shift costs less than a building.Confirmed · €0.9m a year against €38m of capital
Part 3
Is a plant the right shape of answer?
- A contract manufacturer could take the simple volume.Ruled out · the simple volume is 9% of tonnes, at thin margins
- Building nearer customers saves more on freight than labour.Partly · true, but only at twice today’s volume
Situation
The group prints and converts corrugated board for food and e-commerce customers from three plants in western Sweden. The main plant in Borås was running six days a week, the order book was full into the next year and two large customers had asked for more.
The five-year plan had a second plant in it, at €38 million, and the board held an option on a site outside Jönköping that would lapse in the autumn. The CEO wanted to know whether to take it up.
What we found
The demand was real: share had held in every region, and the growth was spread over more customers than the board feared. But the capacity was already in the building. The main plant ran at 54% overall equipment effectiveness, and the largest single loss was changeovers between print jobs, 95 minutes on average.
Changeovers were scheduled by whoever was on shift, the kits were assembled while the line stood still and jobs ran in order of arrival rather than colour. A third shift on the busiest line cost less a year than the interest on the new plant.
Exhibit 2Tonnes a week
Weekly output at the main plant, 26 weeks
Source: plant production system, weeks 1–26 of 2024; Kvist analysis
23% more output from the same building, and €38 million not spent.
What changed
The diagnostic: two weeks on the floor of lines 3 and 4, and the log of 1,900 changeovers from the year before.
Standard changeover kits, prepared while the previous job runs, and a fixed job sequence by colour on both lines.
One scheduler owns the week, frozen 48 hours ahead. Sales can change it only through the scheduler.
A third shift on line 4, with 22 people hired and trained in eight weeks.
The option on the Jönköping site was released. The board will look at a plant again at twice today’s volume.
The result
Before
After six months
Overall equipment effectiveness
54%
68%
Average changeover
95 min
38 min
Weekly output, main plant
410 t
505 t
Capital spent of €38 million
–
€0
The answer, in 13 pages
What the board received at the end of the diagnostic. The appendix holds every number and how we got it.
The answer, on one page
1
Is the demand real, and is it ours?
2
Where the plant loses time
4
Changeovers
6
Three shifts or a building
8
What we ruled out, and why
10
The plan for six months
11
When to look at a plant again
13
Next engagement
Is the acquisition worth what we’re paying?
A fastener distributor, Nordics and Baltics
·
2025
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