CASE STUDY – Learn how Knauf, a global provider prefabricated materials, regained its sales leadership in Brazil, impressively optimized its performance indicators, and transformed people's mindset and behaviors.

Words: Nilson Rodrigues da Silva

In an increasingly competitive world, seeing a team execute a project with mastery and deliver results is a reason to celebrate in and of itself. Now imagine when that success extends beyond the local reality of the company and becomes a global achievement.

That is exactly what happened at Knauf Brazil, the Brazilian branch of the German company that was founded over 90 years ago in Europe and now operates in 96 countries, with 150 factories and more than 41,000 employees. In Brazil, Knauf has two industrial plants—one in Queimados, Rio de Janeiro, and another in Camaçari, Bahia—producing drywall systems, prefabricated gypsum-based structures used in civil construction.

With support from the Lean Institute Brasil (LIB), Knauf Brazil recently implemented a large-scale project at its Rio de Janeiro unit. But the initiative was so successful that it transcended borders: in an internal competition among 600 projects from company units worldwide, the Brazilian team’s project was recognized as the best in the world in a specific category focused on office-related initiatives. The Brazilian unit celebrated this recognition, as it meant the possibility of replicating the project not just across other units in Brazil, but also globally.

THE QUEST FOR AN EFFICIENT ORDER PROCESS

This success was no accident. Named Order to Cash, the project aimed to improve customer relations by optimizing the entire production flow—from order placement to delivery. The initiative spanned six areas of the company: external sales, internal sales, finance, Production Planning and Control (PPC), logistics, and shipping.

The project was massive, involving more than 50 employees over the course of a year. It directly and indirectly impacted almost all departments, significantly transformed numerous processes and structures, and brought about a substantial shift in people’s mindsets. And the results have been remarkable, with significant improvements emerging in just six months of implementation.

Before this transformation, Knauf ranked third in sales within its segment in Brazil. After the project, the company reclaimed its position as the national market leader—a historic achievement. Lean Thinking, while not the sole contributing factor, played a decisive role in making this possible by significantly improving the perception of value from the customer’s perspective.

“WE ACHIEVED PHENOMENAL RESULTS”

There are plenty of numbers to back this up. The project increased the Net Promoter Score (NPS)—one of the key indicators of customer loyalty—by over 280%, far surpassing the initial target.

Before the implementation, Knauf's NPS stood at 17, an unsatisfactory position with ample room for improvement, according to company leadership. The project exceeded expectations: after implementation, the NPS soared to 65, a result that surprised even the most optimistic stakeholders.

A similar trend was observed with another critical metric, Customer Satisfaction (CSAT), which measures customer satisfaction. Before the initiative, CSAT was at 49%. The company had set a target of 75%, but the transformation quickly pushed it to 83%—a leap described internally as “a phenomenal achievement.”

The project also led to significant time savings in the production area. Two crucial indicators saw substantial improvements:

• Waiting time decreased by 51%
• Processing time was reduced by 20%

These reductions were vital in stabilizing the workflow and ensuring efficient customer service.

Additionally, there was a major reduction in lead-time—the time required to complete key processes. The cycle time for manufactured products decreased by more than 60%, while the cycle time for handling raw materials used in production was reduced by more than 50%.

Work quality also saw visible improvement. An indicator measuring the percentage of tasks completed correctly on the first attempt (right-first-time) showed significant growth. This improvement was largely due to the company fostering the mindset that “quality starts with the person.”

A quality job starts with the individual performing it. If that doesn’t happen, everything is already off to a bad start. When a worker completes their part of the job correctly and provides the next process with accurate and complete information, they not only speed up the workflow and prevent waste but also minimize the chance of problems occurring. This mindset has been deeply ingrained in the employees.

THE NEED FOR MAPPING

The project was divided into several phases. The first step was planning and kickoff, which took place in an initial on-site meeting at the company, where LIB coaches and the Knauf team precisely defined several key elements: the full agenda of the lean journey, the implementation roadmap, the specific projects to be carried out, and the expected deliverables at each stage.

Mapping the value stream provided crucial insights—identifying inefficient processes, pinpointing bottlenecks, and uncovering issues that led to rework and customer dissatisfaction.

At the outset, it was determined that teams needed to be trained in key lean concepts and practices. This included foundational Lean Thinking, problem-solving methodologies, Value Stream Mapping (VSM), A3 problem-solving techniques, and Daily Management (DM).

A well-understood problem is a problem almost solved. So, after training the teams on the concept of VSM, for the second phase we quickly moved into practical application—mapping Knauf’s value stream.

Through this rigorous analysis, we outlined the current state to identify inefficiencies that could be eliminated and pinpoint opportunities for improving necessary processes.

This mapping process led to several key discoveries. Many workflows had deviations and inefficiencies that resulted in costly rework and customer dissatisfaction—both internally and externally.

EXPOSING “PAIN POINTS”

During this initial phase, the team identified 74 recurring pain points that had been undermining performance but had never been fully addressed.

For example:

• Misalignment between Sales and Shipping, where trucks were dispatched to pick up raw materials before the necessary requests had even been placed—a result of outdated habits left unchecked by traditional management.
• Excessive financial restrictions, where willing customers were unable to place orders due to bureaucratic delays or outdated records.
• Storage inefficiencies, where the warehouse appeared to lack space, but deeper analysis revealed an excess of non-essential inventory rather than a genuine shortage of room for critical materials.
• Siloed operations, where departments operated in isolation rather than collaborating. Information didn’t flow, compromising the relationship with clients and internal suppliers.

LOOKING AHEAD

An important countermeasure was designing, in the Future State, a workflow that encouraged people to operate in a more “horizonal" manner. The goal was for the entire team, in a multidisciplinary approach, to start thinking about their tasks, their work, and their value deliveries regardless of the departments they belonged to.

This horizontal workflow aimed to break down silos, fostering a stronger connection between clients and internal suppliers. The focus shifted from individual departmental concerns (sticking to their own turf) to understanding how each step fits into the bigger picture, ensuring that collective efforts resulted in the best possible outcome for customers.

We worked hard on raising awareness among everyone so they could understand that, instead of working solely for their departments, they needed to work for the value stream and, consequently, for the customer. It was an eye-opening learning experience for everyone because we identified numerous issues that impacted, for instance, lead-time and the ‘first-time-right’ execution. These were likely caused by disconnections—fragmented, non-integrated workflows—which, unfortunately, are common among the Commercial, Marketing, and Production departments.

POKA-YOKE FOR EFFICIENT INVOICING

One of the most impactful improvements was optimizing the invoice generation process, which previously contained unnecessary steps that caused issues for both the company and its customers.

In short, the system automatically generated dozens of invoices based on sales completed within a given period. This required a manual review of each document to separate those meant for individual customers—who needed to pay via invoice—from those intended for corporate clients, who used different payment methods and didn’t require an invoice at all. In other words, it was an entirely unnecessary step that was identified and eliminated.

To fix this, the team designed and implemented a poka-yoke—a classic lean concept and practice aimed at error-proofing processes to prevent rework.

A new system was introduced, using predefined rules and automated customer records to determine upfront which transactions required an invoice and which did not. While seemingly simple, this solution significantly reduced processing time, minimized manual effort, and lowered the risk of customer dissatisfaction.

HEIJUNKA TO BALANCE “PEAKS AND VALLEYS”

There was also a lack of heijunka, a Japanese term from the lean vocabulary that refers to workload and process leveling. Knauf Brazil was facing significant fluctuations between capacity and demand.

For example, order volumes varied drastically, creating two major problems: at times, there was a surge in orders, leading to bottlenecks, while at other times, there was excess idle capacity due to low order intake. In both cases, the company incurred losses—either due to overburdened operations or underutilized resources.

This was a major and recurring pain point. We noticed extreme variation—peaks and valleys. When the Commercial team had fewer sales, Production remained idle. When sales suddenly increased, it led to an unexpected surge in overtime hours.

To address this, the company implemented specific actions to balance product mix and production volumes over a fixed time period, in order to meet customer demands while avoiding excessive inventory buildup.

Within this framework, LIB coaches and internal teams dedicated themselves to developing a series of A3 reports, with a focus on identifying problems, conducting precise diagnostics, and designing countermeasures.

A3 LED TO “DAILY MANAGEMENT IN SHIPPING”

One of the key A3 reports implemented focused on Customer dissatisfaction in product deliveries and relationships. This analysis sought to understand why the Net Promoter Score (NPS) was not showing strong growth, a factor that could lead to market share loss in the face of fierce competition.

Using data and insights from the Value Stream Mapping, the team established strategic objectives:

• Increase NPS from 17% to 65%.
• Improve OTIF (On-Time In-Full)—a key logistics metric that measures delivery reliability—from 86% to 95%.
• Reduce lead-time from three days to two by improving order release rates from 74% to 95% and cutting Finance Department order blocks from 70% to 30%.

To achieve these goals, the team developed a plan with over 60 actions and established a Daily Management process to monitor progress. One of the most critical steps was launching an experimental daily management system in the shipping department, a pivotal area in the entire workflow. It defined the department’s commitments, control variables, and problem-solving methods.

This daily management in Shipping was crucial for aligning delivery priorities with customer commitments, addressing problems while there was still time for corrections, and—most importantly—collecting data on issues to identify root causes and implement effective countermeasures as deviations were detected.

CULTURAL TRANSFORMATION

This entire process has already yielded phenomenal results—significant improvements in key performance indicators, a rise in an essential market ranking, and even an internal global award. Yet, the journey continues. The initiative is still in progress and is expected to bring many more substantial benefits to the organization.

The company is also celebrating another achievement—one that may be even more crucial because it ensures long-term sustainability: a significant transformation in mindset, attitudes, and behaviors across the workforce.

Employees have begun to see their work through a lean lens—constantly evaluating tasks and processes, always seeking to identify and resolve problems. They are striving to improve things every day, focusing not just on their departmental roles but on the entire value stream. And it doesn’t stop there. They have also started sharing their learnings, new management concepts, and best practices with other departments and even other company units.

Knauf’s lean journey is far from over, as the pursuit of the "perfect order" continues.

_THE AUTHOR