Real business improvements don’t always come easy. But Thales, the Glasgow-based manufacturer of electro-optic equipment, shows that a planned, step-by-step approach is a practical way, writes Dean Palmer.
Thales, formerly Pilkington Optronics which designs and manufactures electro-optic equipment (lasers, infra-red search and track devices, thermal imaging systems), was suffering from excessive operating costs. Back in 1996, Anderson Consulting was charging its Glasgow site (550 employees and an annual turnover of £100 million) £40,000 a month to maintain its mainframe-based manufacturing system (MRP) alone.
It had to change. And there were other issues: Thales primarily serves the world’s armed forces and defence industries, so there is a very high requirement for quality products manufactured to exact specifications and tolerances. Quite simply, Thales’ internal quality assessment and contract control operations were critical to its survival, as was the ability to trace material and products through the factory, right back to the supplier. This had to be improved.
And there was some urgency: Thales was growing its business by expanding into other sectors, like automotive – where it’s currently working with Ford supplier,Visteon to develop a thermal imaging device for vehicle headlights for improved night-driving. So it was doubly important. Finally, like most in manufacturing, Thales had an abundance of disparate databases around its Glasgow site, each not able to ‘talk’ to the others, and each with Y2k as an issue on the horizon.
So the firm decided to totally review its IT requirements. After a software evaluation period, the company implemented K3’s (formerly Kewill) IBS-Elite ERP (enterprise resource planning) software in 1998. The project took just 10 months to complete, and as purchasing manager, Alistair Beaton, explains: “It gave us a solid platform for future IT improvements, and a chance to look in detail at our business processes, and re-model them.
But as Beaton says, no business can afford to stand still for long. “After replacing the original MRP system with IBS-Elite, the K3 team understood our business and workflows. So we invited them to help us review the quality and contract control operations.”
These two areas had been causing some problems of their own. Beaton: “Bid prices and initial enquiry information were sitting in filing cabinets. People couldn’t find the information they needed quickly enough, and departments were functioning separately with their own databases. Information was being re-keyed on multiple occasions, and there was far too much manual work with possibilities of human error. All the typical stuff really.”
So, from early 1999, K3 spent six months implementing a contract control module at the Glasgow site, integrated with the existing ERP system.
“We now have complete freedom of information across the business. Finance, despatch and program [contract] managers can all access the data, from initial enquiry and tender information, right through to quality, manufacturing and delivery schedules.
“Workflow has improved dramatically. Bid prices are now keyed-in once at the enquiry stage, staff are freed-up from admin tasks to focus on value-added activities, and program managers [who were spending 50% of their time searching for data] can perform risk management and make other strategic decisions.”
But that’s not all. In parallel with the contract control module, K3 also implemented a brand new quality assessment system. Beaton: “Shop floor operators are now responsible for their own work. When they finish a job, they must log information into IBS-Elite. This gives us a record of where the job is in the factory, cost information and full traceability of product.
“Our quality and manufacturing is now fully integrated. We can identify bottlenecks, and we’ve cut lead times for repair jobs [these are 30% of Thales’ sales last year] by half, from eight to four weeks typically.”
And the future? Beaton is looking at web browser technology to support the firm’s world-wide servicing operation. As he explains: “Customers like the Ministry of Defence now want to buy complete services, not just products. They now expect us to take responsibility for servicing equipment that could be located anywhere in the world. That means we’ve got to react fast. e-business is a way of dealing with this type of complexity.”
Beaton is looking to implement K3’s IBS.net software, integrated fully with the IBS-Elite ERP system, to deliver information over the Internet to customers. This means clients would be able to log into the Thales extranet and view exactly where their order or repair job is – right down to where the job is on the shopfloor.
Author: Dean Palmer