K3 storming: now majoring on lean manufacturing

Lean manufacturing is to be the next push for K3 Business Technology, formerly the Kewill IBS, Micross and Omicron ERP systems development and service organisation, bought out last year and now, following a reverse takeover of what was the Rapp Group, rejuvenated under the K3 banner. Following success with K3’s £40,000 lean manufacturing project at ACT (Aerospace Composite Technologies) on IBS, K3 will be launching its lean manufacturing consulting and implementation services at the up-coming Computers in Manufacturing (CIM) Show 2001 (NEC, October 30 to November 1 2001). K3 CEO Andy Makeham says: “K3 is focused on the delivery of supply chain management software solutions and improvement programmes to SMEs. We’re the first to bring lean manufacturing to SMEs (jobbing shops and make to order and make to contract manufacturers).” And he adds: “Lean manufacturing has little to do with software and everything to do with changing people’s perception of how they view their workplace and their work practices. I would like our customers to start to view K3 as business improvement partners, and view our software as one of a range of tools from which they can benefit.” It seems to have worked for ACT. The company says it has already seen improved customer service, better collaborative planning and forecasting and a measurable reduction in inventory. ACT is also now integrating e-business processes in its supply chain for further cost savings and service improvements. ACT’s IT manager Keith Leyland says: “K3 consultants helped us to implement new working practices including cell manufacturing, line side inventory management and shop floor data capture. We integrated with our existing ERP system to create a completely lean manufacturing process.” In preparation for the CIM show launch K3 has produced ‘The Essential Guide to Lean Manufacturing’. It’s a 16 page booklet, available free from the company, and explains the new processes and approaches, their objectives and their deliverables, with useful observations about how to start – like considering lead time as the time from initial customer contact to successful customer delivery. Go to www.k3btg.com Meanwhile, Makeham says K3’s business has picked up from the old Kewill days in the UK, and put it in position for good growth over the next three years. “We have had two £1 million orders and our half year results (due early September) will be excellent – exactly on track,” he says. Makeham says this year will see turnover of £8 million from a mix of maintenance revenue, improved major account management (across its IBS, Micross and Omicron businesses) and valuable new business – with more to come. “We’re making [profit] of £100,000 a month,” he insists, railing against the current share price (down at 17p). “Our PE (price/earnings ratio) is seven – it’s ridiculous. We’re a very safe high tech investment… There’s only one way the share price can go.” He also claims five £0.25 million orders for its IBS suite in the last quarter, all in aerospace and defence – with four from Rolls-Royce subsidiaries that, he says, didn’t feel able to follow the SAP group preference, and one from Advanced Composites Group (ACG). “We would normally expect to implement three new big systems in a year: we’re now implementing 11,” says Makeham. And he believes that this kind of business is not only pushing the company nearer to the manufacturing Tier One’s, but also making use of its extended software and services footprint. An example is K3’s Touchline multi-media company, which has the rights for Leeds United multi-media filming and promotions. He claims “50%” of Touchline’s business is now with K3 customers in manufacturing. “They [aerospace and defence users] are wanting documentation squirted over the web, engineering change over the web, parts recognition and ordering over the web, streaming video clips on the web for maintenance personnel,” he explains. For the future, Makeham is candid: “We will acquire a small CRM company very soon. In 2002 we want to buy another ERP company to bulk us up a bit with more service revenue. Then in 2003 we’ll be looking for a distribution planning software company. That’ll take us up to £20 million turnover.”