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Engineered Components

Engineered Components. Achieving Operational Excellence Through Continuous Improvement. October 20 th , 2013. Achieve Operational Excellence Through Continuous Improvement – Key Tenants . Supply Chain Optimization

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Engineered Components

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  1. Engineered Components

    Achieving Operational Excellence Through Continuous Improvement October 20th , 2013
  2. Achieve Operational Excellence Through Continuous Improvement – Key Tenants Supply Chain Optimization The supplier base will create opportunities by increasing their ability to add value to supply chain execution and implementation which is becoming more complex and will require scalabilityto support Provisur’s growth NPD Collaboration Provisur’s efforts to align Sourcing, Supply Chain, the supply base, and engineering, to improve the collaboration, teamwork, and speed to market for new product launches under the Staged Gate process Strategic Contracting and Cost Management Continue efforts to drive cost out of the system through tensioning the current business model and provide opportunities for core suppliers to garner long term contractson current business, out-sourcing of non-valued added activities, and securing NPD contracts Globalization of Supply Base As Provisur grows we will develop an international supply chain and expand our supply base globally to meet the challenges in our new markets
  3. 2012 Key Initiatives Award $20M in multi year supply agreements to core suppliers Develop supply agreements to effectively communicate requirements with supply base and ensure steady state of business given performance. Map Provisur supply chain to improve tools and processes to manage requirements with suppliers Invest in human capital, processes, and tools to improve supply chain and Sourcing Engage suppliers upfront in New Product Development Staged Gate Process Right size supply base to provide opportunities for key suppliers to garner larger share of Provisur business Secure $1.3M in cost containment
  4. 2013 Key Initiatives - Update
  5. Direct Material Plan ($M) – Excluding Cost Containment
  6. Global Direct Material Spend
  7. Cost Savings Files
  8. Payment Terms
  9. Sourcing Conference
  10. Supply Chain Process Improvement Auto-Replenishment Auto-P.O. Contract P.O. RTV Supplier Quality Development First Article Process RCCA Process
  11. Engineered Components Spend Agenda Engineered Items Spend Overview Our Customer Requirements & Goals Strategies for Success Case Study: Long Term Contracts Case Study: Focusing on Local Sourcing Case Study: NPD planning and quoting FY12 Cost Savings Target
  12. Engineered Parts Sourcing Department Structure - 2013 2012 Key Focus 2013 Key Focus 2013 Key Suppliers Mark Bockwoldt Engineered Small Parts Blade / Processing Greg Eberhart Fabrications Jen Eckstein Aftermarket Special Projects/WW Jeff Switall Tooling Large Weldments NPD Large Parts Mark Bockwoldt Engineered Small Mach Parts Engineering /R&D/RGR Blade/Processing Quoting/Part Placement Greg Eberhart Fabrications Large Weldments Plastics Quality Systems Jen Eckstein Aftermarket Outsourcing Special Projects/WW Planning Systems Jeff Switall Tooling NPD Large Parts Purchasing Systems Development Machining Supplier Development Mark Bockwoldt Irmko/Konrady/Alpha B&M/Buetel/RAE Greg Eberhart Ace/Supreme/Tigmaster Walco/Robinson Konrady/Adapt Jen Eckstein Donson/EC/HFR Jeff Switall Walco/Tooling Trace-a-matic
  13. Engineered Components Spend Overview Total Spend: $41M Number of Suppliers: 47 (Mokena) & 28 (Whitewater) Number of Items: 21,000 Major Commodities: Fabricated Sheet Metal Parts ($9M) 14 suppliers Milling ($18.0M) 36 suppliers Turning ($1.0M) 3 Suppliers Broaching ($0.4M) 3 Suppliers Hobbing ($0.7M) 3 Suppliers Raw Material ($4.0M) 4 Suppliers Miscellaneous ($12M) 17 Suppliers Goal of Strategic Sourcing of Engineered Parts To create a world class lean and flexible supply chain organization
  14. Supply Chain Customers / a mix of requirements $41M Spend – Four “Internal Customers” Tooling Aftermarket Production Engineering $5M - Eng $7M – Tact $4M – Eng $2M - Raw $14M – Tact $3M - Eng $3M - Raw $3M - Eng Eng – Engineered “One Off’s” Tact – Tactical – repeated purchases Raw – Steel / Misc Each Category needs different strategies
  15. Strategic Sourcing The future of Provisur’ Supply Chain will continue to be a work in progress. There are a lot of ideas that will be explored and current good efforts to be expanded Bottom line – we need to challenge our current paradigms and make fundamental changes In-source Out-source Stage-Gate Process Dock to Floor Consignment Raw Material Forecasting Dual Sourcing Blanket Orders Capacity Planning Configurators E-Sourcing Dock to Stock
  16. Tooling – Made to Order Type of Production 100% “One-Off” Custom Engineered Production Competitive Pressure: Our Competitors are saying “Provisur can not respond rapidly – since they do not make tooling” Provisur offering 5 day service – Competitors offering 3 day… Counter Measures to explore: Kitting at suppliers (COMPLETE) Overnight Plating / Treating (COMPLETE) Current two step order process… Tool room & then Purchasing – can streamline to one step (save ½ day) (COMPLETE) Ship Direct on “Critical Orders” (UPS Pickup) with label printing being done from Mokina (save 1/2 day) Review Repetitive orders – And figure out how to build ahead Faster generation of prints for duplicate orders possible Standardize sizes with customers – drive away from everything “custom” Need to map entire process and streamline
  17. Aftermarket Type of Production 70% “Repetitive Parts” Competitive Pressure: Inventory high – currently needed to maintain fill rates Can not let our customers go to someone else Counter Measures to explore: Need to review inventory levels based on moving demands Can we remove the non-moving “rocks” Bring Lean - consignment to be increased Supplier Lead time improvements Finalize contracts to allow more “flexibility” when “one off” parts are ordered Review what machine / parts should be obsoleted
  18. Production Machines Type of Production Mostly repetitive production parts / mixed with some engineered “One Offs” Competitive Pressure: 10-12 weeks for machines… quoted to customers Customer consistently want machines with shorter lead times Many parts have longer lead times… so ordering and pushing/pulling in anticipation of sales is killing suppliers and the supply chain team 1,000’s of parts per machine – all ordered and received separately and most ordered per sales order. A supplier may ship in 80 line items per machine / each received separate Counter Measures to explore: Single Pricing – 3 year contracts Supply Chain Review by machine – determine optimal level of assemblies to bring in and what suppliers should manufacture the parts Kit the parts by machine Pull System / lead time reduction with suppliers Blanket orders w/releases for production parts Explore additional consignment
  19. Engineering Projects / NPD “RUSH PART PROCESS” Type of Production 100% Engineered “One Off” parts Competitive Pressure: Parts are never fast enough… Communication for part timing not always ideal Massive disruptions of the supply chain – without forecasting No timing on the part level – tying to build timing Counter Measures to explore: Stage/Gate Process set up to forecast demand (Complete) Plan part arrivals and priorities per timeline and build Engineering purchasing in engineering area (Complete) Hold regular supply chain update meetings (Complete) Attendance in Engineering Planning meetings to manage supplier capacity planning Set up “Prototype” suppliers that have rapid turnaround that does not interrupt production schedules
  20. Miscellaneous System Improvements Measures to explore: ABC analysis and fixing order frequencies to match Suppliers – portal expansion RFQ – can be shifted to on line pricing Prints – to investigate share site Hold Design reviews with suppliers for cost reduction / Lean ideas
  21. Case Study: Supply Agreements Worked out a 3 year supply agreements with three key partners Identified as the source for certain product lines Suppliers now has Steady flow of business Can plan raw material group purchasing & labor Can proceed with expansion plans Provisur now has Achieve volume / cost savings reductions Working to a pull system Working on Kitting Worked with Ace Metalcraft – savings totaled $340K / year…. w/ cost reductions
  22. Case Study: NPD Sourcing Plans Past Practices Quotes are for 1,3,6,12 quantities No given volume forecasts Each part purchased separately Suppliers will supply up to 60 parts (with sixty line items) for each machine Various pricing, volume etc. making for an accounting nightmare Strategy Quote parts by “Family of a Machine” Complete Sourcing Strategy for each machine Identify what assemblies, sub assemblies and kits should be combined Quote 3 Year packages for parts and machines
  23. Future Project – Machine Components $30M / 3 yr program will be tensioned in upcoming months This includes approximately $6M of new aftermarket parts from Weiler and Behive 3 year supply agreements that incorporates the following: Increase value Assemblies, kitting, multiple processes Reduce / stable cost through Volume planning, inventory reductions, material handling Lead us through lean fundamentals Lead time, quality, waste reduction Timing Develop strategy and communicate to supply base by 10/2011
  24. Supplier Lead Time Reduction Working on actions on several fronts: Best Fit / Find suppliers that can reduce manufacturing steps Robinson / Ace – adding internal machining capacity AMFEC / internal machining & anodizing Increase capacity through adding suppliers Large parts - adding Robinson / Trace-a-matic Small parts – To add three in 2013 Modify parts manufacture methods Friction welding / low volume plated parts to SS Reduce “Re-prioritization” from emergencies Engineering / Rush parts outside of production requirements Meeting with Eng. weekly to prepare supply base for NPD/Emergencies Contract P.O.’s – for plated parts & machine parts Negotiate releases and pre-build Simplifying Repairs Working with Harbor Mfg for quick on site service Eliminate poor performing suppliers Custom Rubber
  25. Provisur / Mokena Equipment Manufacturing Process MPS Planning – Starts Planning Build Kickoff Move Date in/out based on EOD Planning Bills in System / Common LLT Parts Ordered EOD Kickoff Part Pick 1,200 Parts Eng Bills Selects Ordered Mokena Machine Build Build 6 weeks 600 Hours LLT Parts 24 weeks
  26. Provisur / Mokena Equipment Manufacturing Process SUPPLIER PARTS LATE SUPPLIER PARTS RGR’ED MPS WRONG / LATE PLANNING BILLS NOT RELEASED MPS Planning – Starts Planning Build Kickoff NO TIME TO REACT Planning Bills in System / Common LLT Parts Ordered Part Pick 1,200 Parts EOD Kickoff PARTS TAKEN FOR FIELD PARTS LOST/DAMAGED Eng Bills Selects Ordered DEF PARTS REACH FLOOR PICKING ISSUES CUSTOMER INFO LATE/REVISIONS PARTS ORDERED LTLT SUPPLIER CANT REACT MANPOWER ISSUES PART REVISION ISSUES ENG BILLS LATE/INCORRECT Machine Build NPD / PROJECT EMERGENCIES Build 5 weeks 600 Hours LLT Parts 24 weeks
  27. Provisur / Mokena Equipment Manufacturing Process MPS Planning – Starts Planning Build Kickoff Planning Bills in System / Common LLT Parts Ordered Part Pick 1,200 Parts EOD Kickoff Eng Bills Selects Ordered CUSTOMER INFO LATE/REVISIONS Eng/Sourcing working together to plan in advance as changes happen ENG BILLS LATE/INCORRECT Machine Build NPD / PROJECT EMERGENCIES Build 5 weeks 600 Hours LLT Parts 24 weeks
  28. Provisur / Mokena Equipment Manufacturing Process SUPPLIER PARTS LATE SUPPLIER PARTS RGR’ED MPS WRONG / LATE PLANNING BILLS NOT RELEASED MPS Planning – Starts Planning Build Kickoff Planning Bills in System / Common LLT Parts Ordered Part Pick 1,200 Parts EOD Kickoff PARTS TAKEN FOR FIELD PARTS LOST/DAMAGED Eng Bills Selects Ordered DEF PARTS REACH FLOOR PICKING ISSUES MANPOWER ISSUES TEAM NEEDS TO REVIEW GOING TO A PRE-BUILD PULL SYSTEM TO MINIMIZE THESE ISSUES PART REVISION ISSUES Machine Build Build 5 weeks 600 Hours LLT Parts 24 weeks
  29. Provisur / Mokena Equipment Ideal Process MPS Planning/ Contract P.O. for Supplier Capacity Planning WILL IMPROVE: SUPPLIER LATE SUPPLIER RGR’s MPS WRONG / LATE BILLS NOT RELEASED PARTS ORDERED LTLT PART LOST/DAMAGED MANPOWER ISSUES + REDUCED INVENTORY Pull system set up by supplier based on MPS & LT Supplier Assembly/ Kit Release Slack Time Mokena Prebuild/Kit Common/Select Builds Releases Slack Time EOD Kickoff Misc Parts / Selects Ordered Part Pick 300 Parts Specific Customs Ordered Eng Bills Machine Build Supplier Sub 100 Hours Sub Build 300 Hours Build 3 weeks 200 Hours
  30. Material Sensitivity
  31. The Keys for the Future Suppliers need to be able to: Articulate a vision for future plans Proactively improve the supply chain Add intellectual human capital to create value in the supply chain Jointly we need to proactively bring solutions
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