Home: Issue 7 2008 › Lead Story › Like a well oiled machine
Like a well oiled machine
22/01/2009 | Channel: Manufacturing
Chris Pope highlights that the importance of ensuring regular consistent supply of raw materials while synchronising the constraints of the production process will really make a difference
Manufacturers have a great way of simplifying the complex. One recently remarked to me “When you look at it, manufacturing is nothing more than getting something from somewhere, doing something to it, and sending it somewhere else.” The reality is that manufacturers invest vast amounts of energy and significant sums of money into the complexities of just the “doing something to it” part in order to ensure that the right ‘something’ gets to the right ‘somebody’ with the right things done to it, all at the right time and price. But just as every journey begins with taking a first step, manufacturing irrespective of how simple or complex it is, begins with the necessity of raw materials availability. Whether a business then applies two or twenty process steps, none of them are possible without first having the raw materials to hand. This in turn means that ensuring regular consistent supplies as well as synchronising the constraints of the production process with material delivery is critical to a company’s ability to fulfil its delivery promises while keeping stocks to a minimum. These are key areas that can make the difference between growing profitably and going under.
In terms of simple manufacturing processes, those at Highland Spring, the leading UK produced brand and number one spring water are very straightforward. Water is collected from a number of springs in the protected ground of the Ochil Hills, transported to the company’s dedicated bottling facility where it is bottled, labelled and packed appropriately before undergoing a three-day quarantine process after which the finished bottled product is sent to storage ready for dispatch. Success relies heavily on the ability to ensure a smooth and consistent supply of the primary raw material, in this case, water.
Kenny Tannock is stock supply manager and he explains the interrelationship between managing demand and ensuring reliability of supply of this naturally occurring raw material: “Demand for our product can be highly volatile depending on weather and promotional activity. For example, if we have a run of hot weather, demand can spike by 50-60 per cent with little warning. Because we have a three-day quarantine process, we can’t simply produce more water according to demand so we have to keep buffer stocks.”
While drawing water from a number of springs, this still requires careful planning to ensure that unnecessary loading isn’t placed on any individual spring, which is again sensitive to customer demand. This is inevitably linked to basic storage constraints of the water prior to use and the finished products afterwards. Dealing with the scale and throughput of production that Highland Spring does every day, 240 million litres in 2006 alone, there is simply not enough space to keep endless supplies of finished product so production needs to be kept running as smoothly as possible. This is compounded by the fact that larger customers expect orders to be delivered within 24-48 hours of placing an order. Daniel Muir is customer supply and logistics manager and explains the problems this causes: “Big fluctuations in demand cause more than just production difficulties. They also impact on our other material suppliers, and puts immense pressure on our warehousing facilities and distribution partners.”
For Highland Spring, the answer lay in investing in an Advanced Planning and Scheduling (APS) system from Preactor International, implemented by Preactor Solution Provider RMS Ltd. Several solutions were evaluated to help balance supply and demand including Preactor, Agilisys (now Infor SCM) and Simul8, though as Kenny comments, the choice was not difficult: “We soon discovered Preactor was widely used in our industry and while the feedback was consistently the same in that both the company and the solution were very good, what impressed us the most was the sheer variety of ways that food and drink manufacturers were using the product.”
After successfully going live in April 2005, the benefits soon began to flow with the first being a time saving of a minimum of half a day, every day, previously used trying to react to demand. Kenny continues: “I went from spending the majority of my day simply trying to keep up with generating the plan to being able to have viewed, amended and actioned the plan within an hour. I could then review this at 3pm to ensure that everything was in place for the next shift.”
Preactor saved more than just time, it also provided the much needed visibility required by Highland Spring. As Daniel says: “Not only did we now have the means to easily view what was happening at any point in the business and across the entire plan, the information itself was much more accurate. This meant that the production people saw benefits right away because they now had planning information they knew they could trust.” A further consequence was that the planning horizon went from a rolling ten days to four weeks and beyond.
In terms of managing its supply more effectively, Highland Spring has been able to trim off areas of stock and buffer excess, which the company had previously relied on in order to avoid not being able to make a delivery. This has contributed directly, taking all things into account, to Highland Spring achieving an ROI (Return on Investment) in under a year.
A totally different scenario is faced by Martin Aerospace, a global supplier of precision manufactured products to the aerospace and other quality critical industries. The company based in Lanark, Scotland, has grown steadily from its genesis in 1993 and now boasts a 60 strong workforce, which helped generate a turnover in 2007 of £4.5 million. Such is the company’s reputation that it works extensively with leading global aerospace manufacturers all of which demand the most rigorous manufacturing processes.
The starting place for these processes is receipt and review of customer supplied orders in the form of drawings, which after having been validated for manufacturing capabilities, are then passed to materials purchasing/stores. A simple MRP run is made to determine the materials required and whether these are available from stock or whether unique materials need to be purchased for the order. Given the high value and rarity of some of the materials used, timely materials handling and supplier management is a crucial component of the company’s ability to be successful.
Andrew Wallace is IT manager for Martin Aerospace and he outlines the major challenges the company faces: “Quality control and traceability is central to our business. Not just at a batch or individual product level, but right down to every process on every raw material item.” Because of this, not only is every process recorded once it is completed, the product is quality checked at each stage at a sample/batch level. Each individual product is then rigorously tested across every required parameter before being dispatched.
Andrew is quick to point out another challenge and a reason why orders are checked at each stage - raw material cost and availability: “We deal with exotic and very expensive materials, often with long lead times, which is why we aim to maximise our yield for every batch produced.” The exotic nature of the raw materials leaves it open to significant fluctuations in terms of price and availability, all of which can affect not just the time taken to deliver the finished product, but also the costs involved in producing the order. Another challenge lies in managing the flow of work to and from the company’s list of approved subcontractors. As Andrew remarks: “The best laid production schedule can be ruined by unforeseen delays at a subcontractor level, leading to failed delivery dates and less than happy customers.”
The solution to Martin Aerospace’s challenges was found in the EFACS Enterprise Resource Planning (ERP) solution from Exel Computer Systems, implemented by RAD Software, Exel’s Scottish partner. In fact, Martin Aerospace went live using EFACS in less than two months with the benefits arriving shortly afterwards. Arguably one of the most notable impacts of EFACS was the removal of all the pain and time involved with the manual creation of each unique works order. Now EFACS simply generated them automatically with complete BoM and routing information, including barcode information so that every process step could be logged in real time, thereby ensuring that the system was fully up to date.
This increase in visibility not only led to significant time saving across the company in obtaining information, it also crucially helped Martin Aerospace to analyse completed job cards, and use this information to determine whether the efficiency can be improved, or the jobs exited. And one key area, which benefitted from this from the outset was purchasing and stock control. Given the scarcity of materials, it was safer although much more costly to buy in a surplus amounts of stock rather than run out. “Now with EFACS, we were able to confidently buy only what we needed when we needed it,” recalls Andrew. “This also meant that stores only needed to issue exactly the right amount of raw materials per job which in turn massively reduced Work in Progress (WIP) and also reduced the tendency to over manufacture product which would then cause storage problems.” Given that this was a number of years ago and against a backdrop of no clear visibility, Martin Aerospace can’t fully quantify precisely how much of a cost saving this proved but Andrew smiles when he says: “It’s an awful lot of money.”
So whether simple or complex, the reality is that by getting your supply of raw materials under exacting control by which ever means are most appropriate, really makes a difference. Not only do you keep your customers happy by supplying the right product at the right time, you can also make considerable cost savings as well.
Chris Pope
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has extensive experience working in the world of manufacturing IT, writing
independent articles as well as case studies for many leading manufacturing IT vendors. He has written for a range of manufacturing and engineering titles and currently contributes regularly to a leading maintenance and engineering publication
In terms of simple manufacturing processes, those at Highland Spring, the leading UK produced brand and number one spring water are very straightforward. Water is collected from a number of springs in the protected ground of the Ochil Hills, transported to the company’s dedicated bottling facility where it is bottled, labelled and packed appropriately before undergoing a three-day quarantine process after which the finished bottled product is sent to storage ready for dispatch. Success relies heavily on the ability to ensure a smooth and consistent supply of the primary raw material, in this case, water.
Kenny Tannock is stock supply manager and he explains the interrelationship between managing demand and ensuring reliability of supply of this naturally occurring raw material: “Demand for our product can be highly volatile depending on weather and promotional activity. For example, if we have a run of hot weather, demand can spike by 50-60 per cent with little warning. Because we have a three-day quarantine process, we can’t simply produce more water according to demand so we have to keep buffer stocks.”
While drawing water from a number of springs, this still requires careful planning to ensure that unnecessary loading isn’t placed on any individual spring, which is again sensitive to customer demand. This is inevitably linked to basic storage constraints of the water prior to use and the finished products afterwards. Dealing with the scale and throughput of production that Highland Spring does every day, 240 million litres in 2006 alone, there is simply not enough space to keep endless supplies of finished product so production needs to be kept running as smoothly as possible. This is compounded by the fact that larger customers expect orders to be delivered within 24-48 hours of placing an order. Daniel Muir is customer supply and logistics manager and explains the problems this causes: “Big fluctuations in demand cause more than just production difficulties. They also impact on our other material suppliers, and puts immense pressure on our warehousing facilities and distribution partners.”
For Highland Spring, the answer lay in investing in an Advanced Planning and Scheduling (APS) system from Preactor International, implemented by Preactor Solution Provider RMS Ltd. Several solutions were evaluated to help balance supply and demand including Preactor, Agilisys (now Infor SCM) and Simul8, though as Kenny comments, the choice was not difficult: “We soon discovered Preactor was widely used in our industry and while the feedback was consistently the same in that both the company and the solution were very good, what impressed us the most was the sheer variety of ways that food and drink manufacturers were using the product.”
After successfully going live in April 2005, the benefits soon began to flow with the first being a time saving of a minimum of half a day, every day, previously used trying to react to demand. Kenny continues: “I went from spending the majority of my day simply trying to keep up with generating the plan to being able to have viewed, amended and actioned the plan within an hour. I could then review this at 3pm to ensure that everything was in place for the next shift.”
Preactor saved more than just time, it also provided the much needed visibility required by Highland Spring. As Daniel says: “Not only did we now have the means to easily view what was happening at any point in the business and across the entire plan, the information itself was much more accurate. This meant that the production people saw benefits right away because they now had planning information they knew they could trust.” A further consequence was that the planning horizon went from a rolling ten days to four weeks and beyond.
In terms of managing its supply more effectively, Highland Spring has been able to trim off areas of stock and buffer excess, which the company had previously relied on in order to avoid not being able to make a delivery. This has contributed directly, taking all things into account, to Highland Spring achieving an ROI (Return on Investment) in under a year.
A totally different scenario is faced by Martin Aerospace, a global supplier of precision manufactured products to the aerospace and other quality critical industries. The company based in Lanark, Scotland, has grown steadily from its genesis in 1993 and now boasts a 60 strong workforce, which helped generate a turnover in 2007 of £4.5 million. Such is the company’s reputation that it works extensively with leading global aerospace manufacturers all of which demand the most rigorous manufacturing processes.
The starting place for these processes is receipt and review of customer supplied orders in the form of drawings, which after having been validated for manufacturing capabilities, are then passed to materials purchasing/stores. A simple MRP run is made to determine the materials required and whether these are available from stock or whether unique materials need to be purchased for the order. Given the high value and rarity of some of the materials used, timely materials handling and supplier management is a crucial component of the company’s ability to be successful.
Andrew Wallace is IT manager for Martin Aerospace and he outlines the major challenges the company faces: “Quality control and traceability is central to our business. Not just at a batch or individual product level, but right down to every process on every raw material item.” Because of this, not only is every process recorded once it is completed, the product is quality checked at each stage at a sample/batch level. Each individual product is then rigorously tested across every required parameter before being dispatched.
Andrew is quick to point out another challenge and a reason why orders are checked at each stage - raw material cost and availability: “We deal with exotic and very expensive materials, often with long lead times, which is why we aim to maximise our yield for every batch produced.” The exotic nature of the raw materials leaves it open to significant fluctuations in terms of price and availability, all of which can affect not just the time taken to deliver the finished product, but also the costs involved in producing the order. Another challenge lies in managing the flow of work to and from the company’s list of approved subcontractors. As Andrew remarks: “The best laid production schedule can be ruined by unforeseen delays at a subcontractor level, leading to failed delivery dates and less than happy customers.”
The solution to Martin Aerospace’s challenges was found in the EFACS Enterprise Resource Planning (ERP) solution from Exel Computer Systems, implemented by RAD Software, Exel’s Scottish partner. In fact, Martin Aerospace went live using EFACS in less than two months with the benefits arriving shortly afterwards. Arguably one of the most notable impacts of EFACS was the removal of all the pain and time involved with the manual creation of each unique works order. Now EFACS simply generated them automatically with complete BoM and routing information, including barcode information so that every process step could be logged in real time, thereby ensuring that the system was fully up to date.
This increase in visibility not only led to significant time saving across the company in obtaining information, it also crucially helped Martin Aerospace to analyse completed job cards, and use this information to determine whether the efficiency can be improved, or the jobs exited. And one key area, which benefitted from this from the outset was purchasing and stock control. Given the scarcity of materials, it was safer although much more costly to buy in a surplus amounts of stock rather than run out. “Now with EFACS, we were able to confidently buy only what we needed when we needed it,” recalls Andrew. “This also meant that stores only needed to issue exactly the right amount of raw materials per job which in turn massively reduced Work in Progress (WIP) and also reduced the tendency to over manufacture product which would then cause storage problems.” Given that this was a number of years ago and against a backdrop of no clear visibility, Martin Aerospace can’t fully quantify precisely how much of a cost saving this proved but Andrew smiles when he says: “It’s an awful lot of money.”
So whether simple or complex, the reality is that by getting your supply of raw materials under exacting control by which ever means are most appropriate, really makes a difference. Not only do you keep your customers happy by supplying the right product at the right time, you can also make considerable cost savings as well.
Chris Pope
')";>')";>
has extensive experience working in the world of manufacturing IT, writing
independent articles as well as case studies for many leading manufacturing IT vendors. He has written for a range of manufacturing and engineering titles and currently contributes regularly to a leading maintenance and engineering publication