No need to speculate to accumulate

Increasing international competition and more demanding customers and markets are hard realities we've all been forced to face for some years. How well we've done so – how much we've allowed ourselves to go down the road of ultimately unsustainable cost-cutting, or have responded to the pressures with creative ideas around products, processes, partnerships and so on – has largely determined where we find ourselves today. Now though, as economies start up the growth curve again, and manufacturing in the UK begins to pick up, it's crunch time. If we can't make metaphorical hay while the sun shines now, we're in real trouble. From a strategic point of view this is a difficult one. Whichever of the paths we've trodden – wading in with the axe, employing lean thinking in our factories and beyond, and/or smart initiatives involving our IT, the fact is that if we're still here, we're mostly geared for current demand, with little spare capacity. And we're still saddled with demanding customers, competition and thus an expectation of short lead times, wide product ranges and variants, and thus short batch runs etc. Of course, you'll know your issues, and there are many ways of bettering your act, and those of your suppliers and partners. You'll find most of them in these pages. But if you need to go back to basics – and I mean right back to your production processes – then you've got a problem. Because inevitably you're going to need time, the likelihood is your solution will have to be radical and probably expensive – otherwise you'd have done it by now – and that means that nasty word, risk. Some organisations are dealing with this very issue scientifically, simulating their options before they spend the big money, and not only saving a fortune, but getting it right and optimal so that their projects are bang on target and proven before anything gets bolted to the factory floor. And I'm not just talking about the big boys, nor about ridiculous costs. £12m Burbidge, which manufactures wooden kitchen unit doors and fixtures at two sites in Coventry, has been successfully using simulation tools from Production Modelling to improve both its business strategy and its manufacturing processes. Most recently, it's been doing that itself, without a big IT team and without specialist skills, having bought the software. Burbidge's finance director Graham Heaven says software, consultancy and hand-holding cost no more than £20,000 – a figure the firm has saved time and again by getting serious investment decisions right first time. In fact, the firm's experience with modelling goes back to the mid '90s, when it first employed simulation consultants to analyse its business strategy in difficult market conditions. Heaven: "Should we have a warehouse packed full of kit, or rationalise the product range, or modify our factory assets and move to Just in Time manufacturing?" Simulation soon showed it had to be the latter – and with production cycle times reduced to one week. "Batch sizes went down, lead times went down from three or four weeks to two days, and the stock commitment went right down." Critical simulation It was a cycle of transformational improvement. "Simulation was critical to all this. It gets you to look at the real issues in detail. Also, other people's ideas and concepts can be analysed objectively with real information, and you can see the effect of your strategy in terms of percentage of orders late and so on." With that success under its belt, when it came to new challenges last year caused by product variety – driven by the fashion nature of kitchens today – the firm turned to Production Modelling, and bought its ProModel simulation tool to bring analysis and simulation to bear. Says Heaven: "Although we have only limited in-house IT, we felt that with the reduced cost of the hardware needed, and the user friendly nature of modern systems, this would be feasible. It also meant we wouldn't be paying for a one-off project, and that we'd be able to apply the technology to other problems." Back to the problem: "The market had broadened, and we were making wider ranges, which was putting pressure on batch sizes and cycle frequency. How should we manage with smaller quantities of wider ranges being ordered? Should we duplicate the facilities, or some of them? Should we reduce the product range. Should we replace some of our big machines with more modern CNC machines and reduce set-up times and allow more frequent changes? Should we batch more together, but then build too much stock?" It's a classic dilemma: and for Burbidge, some key operations did require large batch sizes for anything like efficiency – smaller production batches were leaving the paint shop, for example, largely empty, the net effect being expensive downtime. So that's where it applied the system first. Looking in a little detail, staining and lacquering happens on a 70m line split into staining and drying, and lacquering and drying. As the doors need three coats each side, they have to be fed through four times, with set-up changes after the first two passes. At batch sizes of 200, the line is effectively full and efficient; less than that and the problems arise. Compelling results Running actual production data on the plant model, Burbidge found that by simply splitting the line – the minimal investment option – output would rise by 17%; while by buying a new lacquering pen, output could be increased by 33%. "The simulation provided exactly what we needed – clear and detailed answers," says Heaven. He points out that with proposed process improvements costing upwards of £500,000, getting good intelligence "at a cost that's a small fraction of our proposed investment" was essential. He also says that the visual accuracy and animation of the model helps when it comes to explaining proposed changes and getting board commitment. Equally, there's value in the data-gathering exercise in terms of bringing real understanding of existing processes and operations. "It's amazing what you find, what really happens with the processes, what's actually being done by operators. We've eliminated several unnecessary and wasteful activities," he says. Since that application, the system has been in use with other projects. For example, Burbidge has used it to establish the best way forward for replacing its ageing door-edge profiling machine, again a requirement resulting from smaller batches and more variety. Modelling here helped management make a good, well-informed decision for capex in excess of £350 000. Says Heaven: "We may not be the type and size of company typically associated with simulation, but investing in ProModel has proved very beneficial. It is far more versatile than many might think." It's also a lot easier to use: in fact, he reckons if you're a reasonably serious Word, Excel and Access user, you should be adequately equipped, and he confirms that model development and simulation are much more about configuration than programming. His advice: "Too often, companies still make process change or investment judgements based on gut feel, or simplified and inaccurate assumptions – and then wonder why they fail," he laments. "Tools for enabling important operational decisions to be based on realistic data are readily available, easy to use, and require only a relatively small investment, especially compared to the cost of getting it wrong."