Managing A - Plant Material Flow Configuration

Chaos to Order/Clarity to Success

We have had opportunity to work with many clients whose companies had A-Plant Flow. These were Capital Equipment (like 9 station Rotogravure Printing Machine, allied Lamination and Slitting Machine), Process Equipment like High Pressure Reactors, Magnetic Drive / Agitators, Autoclaves Hydrogenators), Paint Process Equipment.

?The A-Plant is also known as a "many-to-one" plant. This is where many different raw materials are combined and assembled into a final product. These raw materials are specific to the final product and each assembly step can only be performed if all of the required materials are available.?

Major industries that have this flow configuration are -

1. Green field Plant set-up
2. Individual customised equipment manufacture
3. Ship-Building
4. Aircraft Manufacture
5. Building construction

?Challenges of A-Plants:

• ?Coordination between all machines and operations can be challenging to execute so that you have all of the materials required for assembly.
• Excessive work-in-progress items as you often experience shortages of key materials. When you have shortages of important materials, the assembly cannot be performed.
• Resources are not utilized efficiently as you experience bottlenecks.
• The final delivery of the equipment is dependent on the availability or readiness of client site where the equipment needs to be installed

Vicious Cylce

There is a vicious cycle that is common in A-Plants. Because there is track record of delayed and unreliable deliveries, people tend to initiate work on new orders as soon as possible. This practice increases WIP. This in turns feeds into the track record of delayed and unreliable deliveries.

Over the last 7 years we have experienced many A-Plants.

We have learnt that these companies had three distinct flows after the order is received.

1. White Collar work - Order processing, Design and Engineering, Planning and Purchase
2. Blue Collar Work - Receiving, Inspection, Stores, Release to Shop-Floor, Parts / Components / Sub-Assembly manufacturing, Final Assembly, Inspection, Testing, Test-Run, Dispatch
3. Installation, Commissioning at site

?The five focusing steps need to be applied for all the three flows.

1. White Collar Work - Design and Engineering is the Control Point. It means that the pace at which this team delivers their output in terms of BOMs, Detailed Drawings, determines the pace of work of the company. Lot of capacity of design team is wasted due to way things are managed It is quite challenging as these members are involved in the sales cycle for estimation and General Arrangement Drawings for proposals. Decisions were facilitated to prevent bad-multi-tasking of the team members of the design team. Full-Kit in the form of Checklist of inputs before starting their work Clear Priority communicated at organisation level Controlled WIP for each team member Expectation and encouragement to FOCUS and FINISH. Next level of capacity of Design Team got released by pursuing Standardization of Designs, Components and Sub-Assemblies
2. Blue Collar Work In A Plant, final assembly is the control point. The speed at which the assembly is completed determines the capacity of the company of delivering Finished Goods. One of the client companies experienced that their machine? used to occupy the assembly bays for anywhere from 120 days to 150 days during assembly operation. Obviously, this was not the touch time. They used to have 9-10 machines in WIP in 6 assembly bays. The team used to multi-task from one machine to another. This happened mostly due to unavailability of parts, components and sub-assemblies in time. The solution involved Clear priority of Finished Good delivery from each machine bay communicated at organisation level and transmitted to the vendors of parts, subcontract jobs. Decision to release full-kits to the shop-floor and no assembly to begin without a full-kit. There were multiple kits - mechanical assembly, electrical, hydraulic, electronic control panels. Teams for each kits would FOCUS and FINISH Assembly could begin only when the client gave clearance with readiness of their site. Buffer of full kits were made available so that Assembly had option to begin assembly of any machine which had client clearance. Assembly time was halved from 120 days to 60 days and further reduced to 40 days, releasing capacity to deliver so many more orders. Third party and client inspections were scheduled with more confidence regarding dates of inspection
3. Installation, Commissioning at site Client site was the control point. Installation teams ensured that all the full-kits were available and site was fully available with all the necessary utilities and manpower from the client site for handover. Commissioning, training and client handover became incidence free as SOPs were communicated and followed to the hilt.

The physical buffer of full-kits was the decoupling point for all the three flows. Over a period, it is ensured that design team capacity and installation team capacity is more than the assembly capacity. There is slack available in these areas. Assembly bay capacity determines the ability of the company to deliver to the market. As the assembly time is shortened this capacity keeps on increasing and hence the slack has to be actively maintained.

What do you think would be impact of the above decisions? Will a company benefit and create WIN-WIN for all the stakeholders?

?What would be the customer experience related to lead-time, OTIF?

?One of our clients transitioned from chaotic, delayed and unreliable delivery track record to fast and reliable deliveries. This gave them one level of competitive advantage. They started spares and service function. These functions also added to the image of speed and reliability. The credible life-time support with spares and Annual Maintenance Contracts added another level of competitive advantage. Tying with financial companies to facilitate credit for purchase of high performing and reliable machines added another level of competitive advantage. The credit facility attracted the segment of customers who normally chose cheaper equipment.? They could figure out that the higher performance and operations without downtime meant more income which would fund the EMIs.

?Converting the above decisions into an Excel based Demand Driven Materials Planning Engine is another exciting experience that my colleagues Ayush Agarwal and CA Aniruddha Joshi have scripted.

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References:

1. https://www.dbrmfg.co.nz/Production.htm
2. https://www.planettogether.com/blog/why-you-should-know-the-shape-of-your-plant-vati-analysis