On schedule for lean

One manufacturer that was able to continue production more or less unaffected by the record snowfall at the end of last year was Poole, Dorset-based contract electronics manufacturer Hansatech EMS. Why? IT manager Steve Ching is unequivocal: what saved the company, despite the chaos affecting the rest of the UK, was the sophistication and speed of its advanced planning and scheduling (APS), an integral part of the company's Epicor 9 ERP system. "We were able to use our APS to see what we could make, simply by planning against availability of components for orders in house," explains Ching. "Our system links all components to shopfloor operations, so we could see the workable options by job, with full visibility of shortages in any area. We could also see where we had shortages that weren't going to cause problems until later operations, so we were able to keep the factory fulfilling orders and keeping customers informed at the same time." Ching concedes that his APS system wasn't the only saving grace: "We have plenty of capacity, so we don't need to plan labour and we were able to run with the people who could get in." In fact, materials are always Hansatech's constraint - and, with fewer, more highly integrated components and rapid placing from the machines, the key issues for its APS system are normally achieving business agility and "working with our customers to optimise their stock exposure". And that is impressive. Ching explains that, in the last 20 months, Hansatech's APS has become key to providing a whole different level of customer service. It goes beyond continually matching resources to changing customer demand, to optimise production, prices and profit, to working with those same customers to minimise their current and future costs in the face of suppliers' reducing credit limits and the increasing risk of expensive obsolescence, caused by stockholdings and supply chain commitments. "The system not only allows us to change our plans at the last minute, with 'what-if' planning on the fly, so we can build any mix of product, according to changing orders and events. It also tells us what we can and can't build, by customer, so we can then work with them, showing them where the problems are and discussing, for example, changing the order of shipments by moving to more workable sequences and quantities. But just as important, it works out what POs are coming in, when and their value, and then shows us where we could improve cash flow by purchasing materials at different times, changing sequences and reducing stock of higher value components. You could say that in our business, APS is as much about cash flow planning as it is about capacity planning. We have certainly improved our cash situation and our customers' cash flow with this toolset." For Ching, this is the ultimate in flexible and pragmatic lean manufacturing - indeed lean business and lean supply chain. He points out that the world of contract electronics is a competitive and unforgiving place, so today's manufacturers need to be able to adapt to their customers' ways of working. "Some of our customers work on faxban pull systems, calling off demand, whereas others that are more project orientated don't even firm up the BoM until three days before we need to make it. Because Epicor doesn't constrain how we work, and the APS is so tightly integrated, we can tailor the system to optimise our processes on a customer-by-customer basis, without introducing waste or interfering with other customers operating in different ways. "For example, some want project numbers for each job - which we can do, with links all the way from the sales order to the materials - and some just want to give us global orders for the month, and are more interested in their stockholding valuation with us. For one of our project mode customers, we regularly use Epicor's BoM import routine and the comparison tool to visualise changes. Then, once it's clean to build, we flatten the BoM to compare that against what's in WIP, the current stockholding, and so on - and send them that, so they can make decisions, such as whether they want to do the buying, using their supply chain leverage. Then our APS takes over again." So much for flexible lean; what about the role of APS in more traditional high volume, low value manufacturing? Fleckney, Leicestershire-based Coba Plastics - which manufactures small plastic extrusions, such as seating components, seals and hoses - provides useful insight. Its IT director Mark Goodwin points to the fact that, for many companies of this type, the days of churning out massive volumes to stock are long gone. "Call offs and schedules from our customers can be very erratic and, while we can get eight-week forecasts, these are very tentative and subject to frequent change," explains Goodwin. "So, with demand moving, production plans continually subject to change, many extrusion lines, shared equipment between lines, multiple customers and thousand of parts, we needed an APS system to provide visibility of the impact, in terms of efficiency and existing customer orders." Coba Plastics is a long-term IFS Applications ERP user, which upgraded to the latest version late last year with multiple instances of the software for its facilities in the UK and Slovakia. Partly that was to take advantage of some of the new features, but mostly Goodwin says it was to streamline processes and bring everything under the one umbrella ERP system. APS, he says, was essential from the start, to maintain efficiency and meet its OTIF obligations. But it also threw up some surprising benefits - such as highlighting problematic production bottlenecks during the pilot phase. "Once we had got all the data in, it immediately highlighted that we didn't have enough ancillary equipment resource - such as lineside inkjet printers, which were shared between lines. We hadn't anticipated that." For Goodwin, though, aside from agreeing that for lean to work in a complex and variable manufacturing environment it needs system-based intelligence, he says that completing the loop, using shopfloor data capture, is essential. "If you don't have automated mechanisms to feed back what's actually going on against the plan - such as production of this order didn't start till tonight, instead of midday, or your lead time for this activity is 'x' not 'y' - then you haven't got a prayer," he insists. Coba's IT department wrote its own shopfloor data capture software, "because nothing was available at the time that did what we needed". Goodwin explains that the lineside data capture hardware is aimed at shopfloor workers who are not necessarily skilled computer operators. "It has big buttons and touchscreens for start/stop, but, most importantly, they can also see information required to set the machine up to manufacture the product, such as machine settings, technical drawings, tolerance information, etc. It also integrates with ancillary equipment to make production changes on the fly, so we can get data on overall equipment effectiveness as well." All of which, he says, demonstrates the importance of 100% accurate manufacturing data. That may frighten some operations directors, but we need to understand that gold standard data has always been paramount for any manufacturing system to work reliably - and that competing globally simply makes that fact impossible to ignore. "If the system says you need 'x' material, 'y' hours and 'z' speed, but it's a little out, then you'll always be wrong and there will always be knock-on effects in production, purchasing and ultimately customer service. You just have to make sure it's right - hence the importance of feedback." What about other caveats? Hansatech's Ching warns that different systems behave in slightly different ways. "Epicor supports quite sophisticated planning and scheduling, down to the level of using the routings on individual jobs to calculate accurate lead times, and then running APS through MRP to reveal when materials are really needed, instead of working to fixed lead times. If your materials are linked to operations, then you're effectively live planning - which is great, but [again] you need to have all your data 100% right," he advises. "We thought we had that when we went live, because we had been through all the data cleansing just nine months earlier for a previous system, before our MBO," continues Ching. "But we hadn't worked on our inspection process times - only the processes where there were costs associated. That led initially to lead times that were clearly wrong, which made us revisit our routings, find and fix the problem, and improve overall accuracy to reflect all of the real world." Meanwhile, Coba's Goodwin points to the people issues. "Everyone knows you need buy-in from all levels in an organisation. But when it comes to APS, you could be seen to be stripping an awful lot of power from the production planning team, who previously controlled when things could and couldn't be done. That takes some diplomacy."