£150k / Year Productivity Improvement Through Supplier Collaboration

August 6, 2018

SME Challenges

 

Having been to numerous events, conferences and reading many articles there are some consistent messages and themes being discussed.  From IR4, the UK Industrial Strategy and using automation to solve the “productivity crisis”.  Some of these are agendas which are fit for purpose for large multi-national organisations who have the capital and horsepower to act upon the “challenges” manufacturing faces.

 

However, speaking with multiple manufacturing SME’s, delivering the same consistent messaging and brow beating is becoming tedious.  What they need are practical answers or access to the right support to help them overcome the individual challenges they each face.

 

Let’s take productivity as an example. 

 

The government is consistently delivering the message that the UK is not as “productive” as its global competitors.  The message is channelled through various organisations and every event or conference I have attended this year the message is clear.  “You as an SME need to be doing more to increase your productivity”.

 

 

The answer being provided? IR4 and automation.  The answer to all manufacturing problems!?

 

 

However, these require businesses to understand their business more than ever, have the resource to manage the programme of change and the capital to invest.  In times of uncertain political climate, this is not a priority for SME’s who do not have the ability to invest in the wrong change programmes at the wrong the time.

 

And even once implemented you need a change in skill set within your team to understand, manage and act upon the data.  Even with the ever-increasing capabilities of AI, by its very own definition, it is artificial.  Do you wholly put your trust into technology that’s artificial?  Or do you need to have the capability to ensure the AI is right and solve it when it goes wrong, or provide the “sanity” check?

 

This is not about dismissing the technology, its about understanding the unintended consequences of introducing the technology and making sure you have the right base to work from which enables you to implement the technology.

 

Do not use technology to fill the gaps you have in your own knowledge of the business.  As the saying goes, “Rubbish in = Rubbish out”.

 

So, what are the more practical steps a manufacturing SME can take to improve productivity?

 

Unfortunately, there are no easy answers, but the starting point is always data and a few key data points can save thousands in investment and deliver huge benefits.

  • Where are your bottlenecks through the manufacturing process?

  • What’s driving the bottlenecks?

    • Long process times?

    • Machine utilisation?

    • Machining strategies optimised?

  • Where is there heavy manual intervention?

  • Are your work stations lean?

Some simple questions, but do you have the data for every step of your manufacturing process which enables you to develop the framework for a cost reduction/productivity improvement strategy?

 

OK, so the data is now available.  But what actions are they driving?

  • Are you investigating the route cause analysis of poor machine uptime?

  • Is this influencing your machine maintenance strategies?

Let’s look at how data from one question, ("Are machining strategies optimised?"), can be used.

 

Supplier Collaboration

 

A recent benchmarking exercise was recently undertaken by APS on behalf of a client, with an annual spend of over £120k per annum on solid carbide end mills. 

 

The client was happy with the service and quality of the products supplied by the incumbent supplier who they had worked with for over 10 years.

 

The number of hours generated by the end mills within the business was significant, more than 50k hrs per year, due to the reliance on the process.  This over was a cost to the business of nearly £2.9m per year.

 

 

APS organised some suppliers to conduct some trials to benchmark the performance of the incumbent’s tools vs one of their own.  The basis of the trials was decided by the client to enable consistency of comparison.

 

After 2 weeks of trials, one potential new supplier demonstrated a 40% improvement in tool life

 

The next stage involved like for like trials in actual manufacturing conditions at the client’s premises.  The new tools were “no worse” than current.   The truth being that the machinist did not want to swap supplier and the programme had not been changed to suit the new end mill, and the machine tool itself was not optimised.

 

The real result was that a major improvement in process time was available, and 5% improvement was not unthinkable if there was the appetite to change.

 

The Result = £150k saving

 

If the client had followed this through they would have improved lead-times, productivity and reduced costs.  A 5% improvement in capacity was worth a saving of nearly £150k per year or an additional 2,600 hrs per year, almost the equivalent of 1 machine with a 70% machine uptime!

 

It so happened that they were also investing in new CNC milling machines due to increase in demand and lack of capacity, but, did not know their machine tool utilisation.

 

Just think of how many thousands of pounds they would have saved by implementing new end mills as opposed to investing in new machine tools.

 

At APS we work with our clients to understand the needs of the business and work to increase profits and productivity.   We are experts at cost reduction within a manufacturing environment providing the platform for manufacturing SME’s to work collaboratively with its suppliers and make the changes required that give you the competitive edge.

 

You do not need Brexit negotiations to be complete for you to consider your next steps, you can do this now and be ahead of the game compared to your competitors.

 

Contact APS today and see how we can provide the support and resource you need to improve costs, productivity and collaboration.

 

Email: info@apsuk-ltd.com

Tel: 07515 003472

Website: www.allianceprocurementsolutions.co.uk

 

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