Getting a Rolls Royce deal on scheduling

When Stroud-based specialist capital equipment manufacturer LB Bentley decided it needed a new ERP system to run its business, it opted for advanced planning and scheduling (APS) in place of conventional MRPII from day one. As a result, not only has it nailed its massive order volatility problems and cut costs, but it’s been able to grow the business massively without major investment – and is now applying the system to engineering design as well. And there are fiscal benefits too. The firm currently turns over around £3.7 million and is privately-owned, employing around 50 at its 20,000sqft site in Stroud. Two thirds of its production is small bore, precision engineered sub-sea gate valves for the upstream oil and gas market. The remaining third is high pressure compressed air and gas filtration and purification products for various markets including the MOD, National Grid OEMs and general industry. The company does its own engineering design and is almost entirely make- and engineer-to-order small batch manufacturing. Since it’s niche engineering, the firm runs a full design shop with Autodesk Inventor 3D CAD, EdgeCAM production engineering and NC Link for automatic machine programming. In its factories it has a total of six CNC centres as well as the classic range of milling, turning and some spark erosion machines, plus a considerable investment in assembly and test facilities, including clean room and high pressure facilities. Key issues are to do with managing volatility of orders and variety of production while maintaining economic batch sizes and keeping costs down. Order sizes range from £5,000 to £500,000, and the oil industry in particular is subject to substantial variations in demand, which reflect in size and timing of orders. When they come, these have to run through the factory alongside production for the other sectors, putting obvious pressure on production resources. Joint managing directors John and Bernard Bentley say they selected an APS system tightly integrated with ERP from Lilly Software three years ago specifically to handle these issues. The pair wanted more than MRPII could deliver for materials procurement and capacity planning: they wanted an IT tool able to identify impending and longer range bottlenecks on the fly, and capable of providing decision support in optimising production resources for any order mix. Says Bernard Bentley: “We had an Access database running the factory, but it didn’t show us the impact of new orders on production in terms of resource contention, for example. We were acutely aware that we were creating bottlenecks but we couldn’t identify them. For us, being make-to-order and with the kind of volatility we experience, that was key.” John Bentley says the Theory of Constraints (ToC) made sense to them and, although the firm hasn’t gone the whole hog of material release to the beat of the ToC drum since it’s bottlenecks vary according to order mix, it’s using APS to tackle the problem the other way around. “We think of it as a tool. Now, everything is scheduled from the delivery date on the sales order, and with APS we can look at any time period ahead and see where we might have problems; we can run ‘what ifs’ and resolve those in a way that just wasn’t possible before.” The system is also geared here to optimising not just for economic batch size, but to maximise key throughput at minimum cost. John: “Batch size is critical to us. If, for example, a machine is not going to be a bottleneck, it makes sense to manufacture 50, but if we can see it is [a constraint] that’s the last thing we want to do.” And Bernard adds that the system also works the other way round: “It helps the sales side, because they too can see the existing planned throughput.” Further, since the system is aware of supplier lead times for materials and for its subcontract work, it handles and optimises those sides automatically against due date as well. John: “Outsourced services are scheduled in the same way, using delivery dates in purchase order lines… APS is a vital tool to ensure that critical items on long lead times are ordered and manufactured in time.” Importantly, he continues: “If anything happens, like a problem with a supplier or a machine break down, we can see the impact straight away and do something about it.” Indeed, operators are now being multi-skilled so that they can be moved to what would otherwise be bottlenecks as and when they are anticipated. Both brothers make the point that successful APS is highly dependent on being fed with good data (like MRP but more so because of its granularity), so data cleaning and good shop floor data capture (SFDC) are essential. LB Bentley has implemented barcode scanning at the machines, with jobs swiped on and off to automate that. On the other hand, as a result of its SFDC’s live data capture to APS in terms of cycle times, resource utilisation and so on, the system also shows anomalies like false factory assumptions, safety nets and so on that can be addressed to improve responsiveness. John Bentley explains: “We had to purge the system of erroneous data pulled in from our Access database, but the system is to some extent self-purging, taking actual cycle times for example as feedback from the shop floor… You can also see safety margins of time for a job because it’s working on real data recorded from previous batch runs.” Significantly, they comment that for them APS is a journey, and that they are still exploring its potential. Last month, they started extending the system to cover engineering design and production engineering, considering these also as key sequenceable jobs and resources. Says John: “You can consider it as providing work-to lists for engineering designers and production engineers, for example, for customer product modifications. We’re using the system in the same way – to ensure they’re working on the right jobs to avoid bottlenecks later.” As for hard figures that indicate a scale of return on investment, the Bentley’s say they can do no more than point out that the firm has grown 53% in the last three years with nothing like a comensurate investment in people and machines. Bernard also makes the point that since the system is entierely integrated and lets you drill down into real gross and net profit for every job against forecast and budget figures with recorded actual costs, the firm is in an excellent position to talk authoritatively with its bankers and plan a sound financial future.