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Hydro relies on lean production

Since 2011, Hydro has been a key participant in the National Lean Operations research program in Norway, which examines the use of lean techniques in Norwegian companies. When evaluating their results, the researchers rated the Aluminum Metal Production System (AMPS) at Hydro as one of the best examples of "lean production".

AMPS is Hydros' platform for continuous improvement. The production system was developed according to the principles of the “lean production system”. During the financial crisis, when the price of aluminum fell from $ 3,000 a ton to $ 1,300 in just one year, the system proved to be an important tool for the company.

"We launched AMPS in 2007 when aluminum prices were high," said Per Holdø, director of AMPS at Hydro Aluminum Primary Metal. “At the end of summer 2008, aluminum prices dropped dramatically. In this situation we were tempted to discontinue AMPS and to consult with consultants who could have taken simple measures to reduce costs due to the crisis. ”

"But the management of Primary Metal remained steadfast and stuck to AMPS. The entire organization should be involved in the improvement work and the company should be led through the stormy waters. This was a goal-oriented, far-sighted decision.
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AMPS is based on five principles:

• standardized work processes
• clearly defined relationship with customers and suppliers
• optimized work flow
• dedicated teams
• visible management

The principles include tools and guidelines that support the best practices in primary metal.

Although individual principles and tools from AMPS could be used separately, Holdø emphasizes that the success of the "lean production" at Hydro is primarily based on the interaction of the five principles. & nbsp;

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"The interrelation between the so-called" soft "and" hard "aspects in our production, from the processes and production systems to management, was important to us. These aspects are interdependent and crucial to our results, ”explains Holdø.
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The results of the research program confirm that Hydro was successful in valuing both moments.
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"We found that Hydro with AMPS put more emphasis on the" aspects of the lean method than other international reference companies. While others mainly focus on & nbsp; Rationalization, logistics and constraints focused, Hydro also took into account the organizational aspect, including teamwork and visible management, "said Jonas A. Ingvaldsen, associate professor at the Norwegian University of Science and Technology and researcher at Sintef Raufoss Manufacturing.

Clear results

AMPS was critical to the success of the $ 300 improvement program completed in 2013 that Hydro's own aluminum smelters implemented. The result has been annual cost savings of nearly 1.5 billion Norwegian kroner since the program started in 2008. A new program is now targeting further savings of $ 180 per tonne of aluminum produced at Hydro's joint venture smelters.
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By focusing on improving not only the technical but also the human aspect in the operation of primary metal, the workers were increasingly involved in the decision-making processes. The result of these efforts is shown in the employee survey at Hydro, Hydro Monitor.
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“We see a positive connection between the introduction of AMPS and various indicators for employee engagement. The employees show a clearer understanding of their tasks, they see their work in a larger context and feel more involved in the work processes, ”says Holdø.

Continuous improvement and research

"We achieve good results in the employee survey, but a flat organizational structure also entails some challenges," says Ingvaldsen.
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"We see that Hydro's AMPS production program differs from the original, more hierarchical lean concept in that the shift supervisor is no longer available. On the one hand, this has led to greater employee engagement, on the other hand, the decision-making processes in the individual teams have become more difficult. That is why we are now concentrating on further improvements in this area. ”
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Hydro will therefore prioritize the development of the managers at Hydro in the future. Holdø explains how this coincides with one of the key points of the lean concept, continuous improvement:
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"Working with AMPS is an" endless story, "he explains. "To get the culture and & nbsp; Building and maintaining best practices in our company is critical to continuous improvement, which includes all of our people.

At the same time as the internal improvement work, Hydro will also participate in further research into lean methods. Starting this year, Hydro will share its experience and investigate whether the Norwegian improvement program is compatible with other corporate cultures in Hydro's international joint venture network.

This text is machine translated. To view the original German text, click on DE on the top right of this window

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