APS holds the keys to AWS' manufacturing future

£8.5 million turnover contract electronics manufacturing firm AWS Electronics will this year switch off its MRP II and switch on advanced planning and scheduling (APS) to transform not only its production operations, but also its entire business. And managing director Derek Fulluck expects “more than 10% and up to 20% improvement in profitability”, as well as support for its aggressive growth plans, with web-based collaborative supply chain operations. Based in Newcastle-Under-Lyme, AWS has a 46,000sqft factory geared to complex products. The firm has four SMD (surface mount device) machine lines, circuit board assembly bays and several self-sufficient cells for long term customers. Lines include vending machines, engine controls, laboratory test equipment and power supplies for satellite data comms, and it gets involved with everything from prototype production, through qualification, to production. Says Fulluck, “We’ve got 20-odd customers and 18,000 component parts and finished products. We build everything from PCBs to finished products with a wide range of materials, a range of people skills and machines. We’re a mile wide and an inch deep.” Like many in manufacturing, AWS is finding itself having to respond ever more rapidly to customers in what has become a very competitive market. The firm has been running Lilly Software’s Visual Manufacturing for the last couple of years, and the belief now is that augmenting it with APS is the answer. Fulluck: “We’ve managed the complexity by having account managers for each of the customers and communicating all of the time with production.” And for him that doesn’t mean just weekly planning, but keeping in constant touch “to avoid production being seriously affected and to avoid big switches overnight.” The point: “I want to grow the business without increasing my overheads: we can’t keep running with more account mangers.” “With such a wide range of types of machine-based and manual assembly work, we need a tool that can handle the complexity of knowing whether, on the one hand, we have the capacity and, on the other, if we have the required materials, right down to a single component. This will allow us to commit to delivery dates, or to be warned early enough to do something about it. I expect the new system to spot anomalies – labour, skills, machines, materials, orders – to manage the increasing complexity as we grow the business.” Fantastic advantage Materials manager Neil Gordon agrees. “It will give us a fantastic business advantage. Because once it’s up and running it will give us far better control of the plant, reduction of inventory and achievable customer requirements built right into the work plan.” And he adds: “The second thing is that with APS you can do ‘what ifs’. So on set-ups for labour shifts you can check to see the effects of running overtime on one particular cell, or all the cells, and assess problems with materials due in. And the third thing is that when taking new orders the system will tell you when you can ship while still maintaining everything else on the plan.” Beyond this, the APS will also schedule just-in-time deliveries, allowing the optimum utilisation of manufacturing capacity while also minimising the amount of capital tied up in stock and work-in-progress (WIP). Says Fulluck: “We’ll be able to respond to customer ‘what-ifs’ quickly and accurately so they can tie back into their clients and so on. We brand ourselves as an extension of their factory, and this system will help us to live up to that.” And there’s the collaborative e-business bit with customers and suppliers. AWS is currently working with Lilly and web design specialist LPP on improvements to its corporate website to allow more interactive communications with its customers and principal suppliers. In future, customers will be able to check the details of their orders and obtain up-to-date status reports over the Internet. Based on a Visual Manufacturing screen, the system will also provide the basis for exploring links between trusted suppliers, while also covering quality management procedures and issues. Integrating e-business Fulluck: “We’re going to open up our live data in Visual Manufacturing to our customers so they can see the BoM (bill of materials) and our rev level [and] check work is what they expect. And we’ll show our outstanding order book, and the reasons why and the new date, and our quality interactions. It’s their data: for us as contract manufacturers that’s very important.” So far so good, but it hasn’t happened yet, and both Fulluck and Gordon know this isn’t something to be undertaken lightly. Fulluck: “It will mean a fundamental change to our business practice, involving the transition from classic materials planning to a system that also takes into account available resources and capacity constraints.” Indeed, he continues, “The potential impact of finite scheduling on our productivity is likely to be so significant that we have held up our implementation to give our project team time to prepare properly.” Currently, AWS is in the throes of reviewing its engineering master file data. Every product structure and manufacturing process, including method, sequence and assembly instruction, is being checked and validated. “Finite scheduling is simple in theory: the computer recommends what to make and when,” says Fulluck. “But putting it into practice is another matter. The accuracy of the process depends on the quality of the information contained within the manufacturing database, especially manufacturing cycle times. It is very important to input the right information so that the system can rationalise priorities correctly.” Gordon adds: “There’s not as big a difference [from MRP] as you might think: it does all the usual netting of stock against demand and you can act on its suggestions or not. In a sense it’s the same but done automatically with available capacity.” But he agrees you do absolutely have to keep on top of your base data, and top of the list is available resource. Second, he says, “you have to see the works orders going through the shopfloor and the transactions booked against them in real time and accurately. Third, you have to be sure of your inventory to the high 90s percent – and that’s stock, WIP, the whole bit. Fourth, you have to be in control of purchasing and incoming materials receipts – you need to know because there’s less inventory, so decisions will be made by the system on the basis of expected materials.” Poor quality data could suggest apparent shortages of components or capacity, resulting in a works order being sidelined in favour of a smaller job that is ready to go despite having a lower priority. Other key considerations, he says, include cycle times quoted for individual production operations. These are often either under- or over-estimated, or simply based on fixed allowances, which can lead to unacceptable conclusions from a finite scheduling system. “We’re clean, but the exception is labour times for parts production, and we’re doing that exercise now. We don’t have the data because we can’t currently book time to a specific works order, to an individual job. We’ve got 18,000 parts, although they’re not all active, so it’s a big task.” Is it worth it? Gordon is unequivocal. “I would say absolutely it is: it’s going to give us the ultimate control to run a business of this size and complexity – with a wide customer base and complex production. APS lets you make promises and manage your business properly. This system will give us all the answers.”