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Chief Executive

BE manufacturing | 3

FEATURES lean focus: 10 Lean: Lead story

The people side

Lean is often described as a management philosophy for the elimination of waste. For those who really understand it, however, it’s much more than that, as Billy Taylor explains.

20 Lean: Automation

Listen to the machine

The quest for Total Production Efficiency takes a major step forward through the combination of the MTConnect Standard with Big Data, and the new vimana software platform from System Insights.

10

28 Lean: Food Safety

A LEAN FOOD SUPPLY CHAIN

Food safety requires compliance with stringent regulations. Florida-based PACA Foods has found a solution that helps improve quality across the whole business.

20

34 lean: case study

Adopting the lean approach

More companies than ever before are taking part in The University of Kentucky’s Lean Systems Program.

Program Director Glenn Uminger discusses just what it is that makes the lean approach so attractive.

4 | be manufacturing

34

contents

42

42 strategy

Sales & Operations Planning: More than forecasting

S&OP is a hot topic for wholesale companies, here we discuss what it is, and how it can drive performance.

52 operations

Automation in retailing

52

The lessons of ergonomics learned in manufacturing plants and distribution centers are rapidly being put to use in retail operations.

58 Best practice

Food for thought

Best practice in document management drives quality and business performance in the food industry.

66 Executive insight

ismail dockrat, ceo, denel aerostructures

Ismail thinks social media is overrated, and prefers novels to business books.

66 be manufacturing | 5

business showcase

70 Aerospace: 70 Denel Aerostructures Making the transition

Chief executive officer Ismail Dockrat discusses the restructuring programme that has contributed to this South African success story.

80 90

Pharmaceuticals: 80 Julphar

Caring for a country From its new, 40,000 square foot facility in the GerjiJakros region, Julphar is able to supply Africa with vital pharmaceutical and healthcare products.

Chemical: 90 Coogee Chemicals

The right chemistry

Coogee Chemicals plans to continue the work that has made it one of the sector’s biggest success stories.

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contents

100

Fabrication & Raw materials: 100 DORCE HOLDING

Building a better world A global business in every sense of the word, DORCE plans to build upon all that it has achieved to date.

108 3Q Concrete

Cementing a legacy 3Q Concrete supplies its products to some of most important infrastructure projects in South Africa.

116

116 NatSteel

As strong as steel How the success of offsite prefabrication reinforcement products and services have helped refocus the business.

124 Lanka Walltiles Wall to wall quality

For almost four decades Lanka Walltiles has remained a leading figure in the Sri Lankan ceramic tile market.

food & drink: 134 British American Tobacco Trail blazing

134

Global tobacco giant British American Tobacco is realigning its supply chain function to improve operational efficiency.

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business showcase

146 Metallurgy: 146 Sohar Aluminium

LIGHT AND LEAN IN OMAN

158

166

Sohar Aluminium has the world’s longest single potline at 1.2 kilometres long: it is contemplating expansion that would triple its existing capacity while continuing to support Oman’s economic and social growth.

158 Colakoglu

Turning back the challenge With conditions in the steel industry continuing to prove challenging, it is Çolakoglu’s ability to adapt to a constantly changing marketplace that has contributed most to its long-term success.

166 Er-Bakir

Mixing knowledge with quality Er-Bakir has forged a reputation through the building of hand-crafted home purpose copper products.

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contents

electronics: 174 VingCard Elsafe

Opening the doors of opportunity VingCard Elsafe continues to innovate and excite, as its recent unveiling of the first invisible door lock demonstrates.

174

182 SMTC

The perfect manufacturing partner SMTC is committed to delivering the right solutions to innovative partners around the world.

furniture: 190 Grafton Everest RELAX WITH DIAMONDS

182

South Africa’s leading manufacturer of lounge suites aims to capture the increasing demand for fine furniture.

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10 | Be manufacturing

Lean: lead story

The people side of lean

Lean is often described as a management philosophy for the elimination of waste. For those who really understand it, however, it’s much more than that, as Billy Taylor explains

written by: Martin Ashcroft

Be manufacturing | 11

Billy Taylor in the curing presses

lean: lead story

W

hen I first spoke to Billy Taylor last year he was general manager of the Goodyear Tire plant in Fayetteville, North Carolina, where he led a lean transformation that engaged the workforce and revived the plant. Now director of commercial manufacturing for Goodyear North America, based in Akron, Ohio, Taylor recalls our first article together, Living Lean.

“That last article you wrote got a lot of attention,” he tells me at the start of our recent conversation. “I got calls from everywhere – even from a large operation in Vietnam. They translated the article into their native language and distributed it throughout their factories.

They’ve reached out to me to go and visit them out there.”

This introduction exemplifies why Billy Taylor has been so successful working with people. He has made me feel good about myself already; there’s nothing I wouldn’t do for this guy.

Our first article looked at lean through the improvements achieved

at Fayetteville. There was some theory and principle in it but the emphasis was on ‘We did this, we did that and the results were this, that and the other.’

This time, we decide to talk exclusively about Billy’s approach to the people side of lean, something that lean leaders often neglect to the detriment of their projects. “The tools and techniques of lean are generally well understood now,” he says. “What people don’t understand is that it’s not totally about the tools; it’s about people, tools and systems and how they’re linked together.

Holistically, this is your operating culture.”

When talking about people, tools and systems, it’s no accident that people come first; first in the sentence, and first in life.

You can do wonderful things with tools and systems, but unless you have the people side right you’re missing the key ingredient. “Lean is often referred to as a management philosophy that focuses on reducing waste,” says Taylor, “but I believe it’s about aligning people,

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“My approach to lean is to first build a relationship of respect and trust with my team” tools and operating systems to prevent waste.” One of his memorable anecdotes illustrates this very well.

“I had a colleague who worked outside of the United States who came to visit me while I was at Fayetteville,” he begins. “He was a very sharp individual who understood lean tools and concepts and he said to me, Billy, my people just don’t get it. Some of them are not capable of writing their names and they literally sign their checks with their thumbs.

“So he shows me his laptop and he goes through his SMED, his value stream map, standard work, and he tells me about his error proofing and inventory level, and then he looks at me and says, ‘what’s wrong Billy, I know that look’. So I say, I hear you, but can I ask you a question? How much time have you invested in learning

14 | Be manufacturing

how to speak thumb? How much time have you invested in learning the culture of the people you are leading? The minute you learn how to speak thumb, those people will embrace what’s in your laptop and all you’ll have to do is get out of the way.

“Three to four months later he started to see some incremental improvements and he sent me a gift in the mail. In it he said, ‘thank you, I have become very fluent in speaking thumb’. Lean starts with understanding the culture.”

Taylor is not a fan of using Japanese terminology in US plants, either. Using lean terms might show how clever you are, but it does nothing for the people whose practical knowledge you need to harvest. Use the language of the people, with humility and respect, and they’ll understand you better.

The people side of lean

is often overlooked because leaders tend to start a lean journey after reading about what somebody else has achieved. They look at what they did, the tools they used, the results they achieved, and they want to do the

lean: lead story same. Nothing wrong with that. But then they work out their model from what they have seen and tell everybody what to do to replicate the results of the other company.

They fail, of course, because you can’t force people to change. However long it takes, you have to earn the trust of your people so they can understand the need for change, and ultimately take ownership of the change process. Many leaders just don’t get that. I wondered

when the penny first dropped for Billy himself.

“Throughout my career I’ve been placed on assignments that were very challenging,” he explains.

“Before I grasped the concept of lean my upbringing had been about respect for people. People ask me when I started experiencing success in my career. I remember that I started to gain success when I started to gain trust.

People listened to what I had to say because I listened to

what they had to say. It’s that old saying, if you make people visible they’ll make you valuable.

“My approach to lean is to first build a relationship of respect and trust with my team,” he continues. “Then I must determine what my team needs to meet the customer demand. It’s making sure everyone understands the goals, then giving them what they need to achieve them.”

What you want and what you need are two different things,

Billy participating in TPM Event 2012

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as anyone who has brought up children will know. But understanding the culture of the organisation helps make this determination easier.

To truly understand the culture, however, you need to get people to tell you openly and honestly how they feel.

How do you do that, if you don’t have trust to begin with? I can see a chicken and egg argument developing here. “We do mirror exercises,” explains Taylor, “to understand mindsets and behaviours. Behaviours you can see; mindsets you can’t; it’s how people think, feel and act. We bring people off their jobs and out of their natural environment and they write on sticky notes. They give us their true feelings and experience about the culture anonymously. Sometimes it’s brutal, but we post their comments for everyone to see. You can also take photos of work areas and things

that need attention and post the photos, because they are facts about what reality is.”

An exercise like this gives everyone a chance to look in the mirror, and a great deal can be learned about the culture—whether people feel valued, whether they agree with objectives, etc. “The key component is going to see reality,” says Taylor. “After that you display what you’ve learned and you have to find out why people feel that way.

At that point, when people come forward they not only give you solutions, they’ll own them.” You can’t put a timeframe on it, he says, but you have to be committed to staying the course. “As you continue to probe you continue to gain better insight. People will start to respect you because you respect them.

“Respect for culture helps us to honour beliefs and

sensibilities that are not necessarily our own,” adds Taylor. “That’s difficult to do. I like to watch football, but it may not interest you.

You may prefer ballet. I have respect for those differences.

When people can see that and recognise that you embrace

“Lean values are truly about respect for the people. It involves everyone in the company helping to meet the customer value” 16 | Be manufacturing

lean: lead story

Red-green board meetings initiate teamwork

that, you start the journey towards true north.”

Lean is often described as a journey without end.

The term continuous improvement supports the infinite nature of the process.

So, for lean to work—to really live lean—it has to be sustainable. It means that once you have picked your windfall apples and your low hanging fruit, you have to go back to the people well and drill for more ideas.

“I believe that the people part is critical to

the sustainability of lean,” says Taylor. “When you get the people part right the processes live beyond the individual. You might have standardized processes but to continually improve, the people part comes back into it. That is the most difficult part of the lean journey.

I’ve been around different organisations and different lean leaders and some leaders miss the key point of lean. They see lean as a process of waste elimination, and it is that, but it’s much

more. If you only focus on the elimination of waste you focus on things that drive the internal organisation rather than customer value.

Customer value is where it all starts. Lean is customer first.

What features and services does the customer want?

What do they want, when do they want it and how much will they pay for it? Without this information how can you implement an effective and efficient operating system?

“You’re in business to provide value as the

Be manufacturing | 17

lean: lead story customer defines it,” he continues. “Once you know that you can go back to an internal perspective. Once you have the customer value defined and you’re flowing at a rate of pull from the customer’s point of view, then you can strive for perfection. Lean values are truly about respect for the people. It involves everyone in the company helping to

is committed to driving out waste, not just one.”

Outside consultants, by definition, don’t understand your culture, but your own people do. They are the culture. The truth is that you can’t find a better expert than the person who does the job. Engage him, inspire her, respect them all, and weigh the fruit you pick in tons of customer

“Just because you don’t have engineer in your title doesn’t mean you’re not a lean expert” meet the customer value.”

Putting everyone in the company to work on improvement leaves little room for consultants, the experts that so many resort to when they have problems they can’t solve themselves.

“The problem with being the only expert is that you can only be in one place at a time, so you can only solve one problem at a time. When you let go of control and expand it, you let your people own the business—and every member

satisfaction. “Just because you don’t have engineer in your title doesn’t mean you’re not a lean expert.”

You get tremendous improvement gains while you’re picking low hanging fruit, of course, but as you get higher up the tree the rate of improvement slows down. How hard is it to keep people motivated when that happens? “Once the size of the prize is reduced, it doesn’t mean that the race is over,” says Taylor. “It’s infinite. You

have to constantly go back and revisit the culture and explain the case for change, check your status and ask if you are meeting customer demand. Are we improving and where are we at as a team? The prize may shrink in some form or another, but the engagement is a cycle.

You must continue to go back and revisit.”

In case anyone needs reminding, here’s a standard summary of why you’re all in business: “Satisfy your customers consistently; produce what they want at the right time, deliver it to the right place at a price they’re willing to pay; use the minimum amount of resources through respecting and involving all your employees in a continuous improvement culture.”

Now add the Billy Taylor ingredient. Keep everybody in the loop. “Here’s where we are. Here’s where we are.”

That way, you keep going north together.

For more information about Goodyear visit: www.goodyear.com

Be manufacturing | 19

Listen to the machine The quest for Total Production Efficiency takes a major step forward through the combination of the MTConnect Standard with Big Data, and the new vimana software platform from System Insights

written by: Thomas R. Cutler

20 | Be manufacturing

LEAN: Automation

Be manufacturing | 21

LEAN: Automation

T

he MTConnect s t a n d a r d facilitates data collection vital for meaningful analysis of machine tool behavior. In 2007, a group at the Association for Manufacturing Technology (AMT) led by Paul Warndorf realized the need for a comprehensive standard to address the inability to collect data from manufacturing equipment. That was six years ago and various machine tool builders and controller manufacturers functioned as islands of automation, requir ing propr ietar y methods to access their data.

AMT enlisted the help of the University of California, Berkeley, to develop an open standard making data easily available; this development spurred a new generation of innovation in the manufacturing industry using the latest technologies, including ‘big data’.

William Sobel, presently CEO at System Insights, was a visiting lecturer and researcher at the RADLAB back in 2007 and was asked to develop the standard. Sobel enlisted the assistance of

22 | Be manufacturing

Athulan Vijayaraghavan, who was working on his doctorate in mechanical engineering.

Sobel architected and wrote the MTConnect standard with the goal of reducing the complexity and cost of shopfloor data collection and providing a common language for all manufacturing equipment.

Moving beyond OEE For the past five years ma nu fac t u r i ng pla nt managers and supervisors have adopted lea n manufacturing principles, eliminated waste, and still seen total production efficiency elude them.

Monitoring and overall equipment effectiveness (OEE) solutions in the shop extracted little value because most ‘OEE monitoring’ technology uses tools that generate data, but none that help them make sense of it.

OEE is an effective metric to given an overall sense of how effectively manufacturing equipment is performing; it is not particularly useful in improving shopfloor productivity.

OEE is a composite metric, combining machine

availability, part quality, and schedule adherence. At best, OEE conflates each of these individual aspects of productivity, and at worst, OEE incorrectly inflates a device’s productivity by one of the three metrics, overwhelming the others.

OEE-based monitoring tools have also emphasized data collection and reporting, aggregating OEE and its constituent metrics from a variety of shopfloor devices

24 | Be manufacturing

and presenting it to users in the form of dashboard and reports. While these applications present valuable shopfloor statistics, they do not offer more than a rearview mirror-view into the shop’s performance.

OEE-based monitoring solutions are reactive; they do not help operations managers understand why devices have low productivity and what opportunities a plant has to increase productivity.

Moving beyond OEE, data is needed that can allow a better understanding of what opportunities are available to increase device productivity.

MTConnect and big data An innovative combination of MTConnect and Big Data technology led to the first significant manufacturing analytic software; it debuted in 2008 at the International Manufacturing Technology Show (IMTS). Sobel and

LEAN: Automation

“vimana allows manufacturers to make decisions by understanding why machines are doing what they are doing” Vijayaraghavan saw the need for applications that went beyond current stateof-the-art capabilities in OEE-based monitoring, and founded System Insights in Berkeley, California. The

result was the development of the revolutionary vimana platform for manufacturing intelligence and Big Data analytics.

Sobel had been working with researchers applying machine learning and Big Data analytics in order to make data centers more efficient. The vimana platform is a synthesis of the technologies that are used to enhance the efficiency of financial systems, data centers, and social media. Dr Vijayaraghavan brought his knowledge of decision tools for designing manufacturing processes and systems, developed during his doctoral work under Professor David Dornfeld at the Laboratory for Manufacturing and Sustainability at UC Berkeley. vimana vimana is a next generation software platform with realtime pattern matching and

historical machine learning capabilities which makes sense of data from multiple shopfloor sources using the MTConnect standard.

Manufacturers apply these data in helping users understand the opportunities to improve productivity. This information is presented in the form of dashboards, real-time metrics, alerts, and contextual reports.

Sobel is passionate noting that, “vimana delivers real, measurable value within weeks of deployment by allowing manufacturers to make decisions and understand why machines are doing what they are doing, and not merely what they are doing.”

Traditional OEE-based applications act as data historians collecting data from the machine tools and providing reports. The reports do not add context to what the machines are

Be manufacturing | 25

“This capability goes well beyond OEE monitoring, and allows the user to take targeted actions to improve productivity based on the downtime reasons” doing, they merely report the machines’ activities.

Identify / Do

Baseline / Plan

Use vimana’s pattern matching to identify opportunities to improve productivity

lin se

ify

Ba

nt

e Id

e

Apply vimana’s historical reports to baseline device’s current performance

26 | Be manufacturing

id Va l

oy

pl

De Deploy

Leverage vimana’s MTConnect support to deploy across facility

at e

Continuous improvement with vimana

Validate

Apply vimana’s realtime analytics to validate improvements

Understanding downtime A key capability of vimana is the auto-classification of downtime in machine tools and manufacturing devices. vimana maps the patterns in the MTConnect data sources in the device including the reason the device is down. vimana can study real-time data from the device leading up to a downtime; it will reveal that the device is down because of a broken tool, or that the device is down for the operator to edit the program to change an offset.

Dr Vijayaraghavan noted, “These downtimes can then be linked in turn to further activities in the device. The operator’s offset change can be associated with poor part quality or excessive vibration or tool chatter during machining. This capability

LEAN: Automation goes well beyond OEE monitoring, and allows the user to take targeted actions to improve productivity based on the downtime reasons.” vimana is a powerful data mining engine on the backend which finds hidden trends in the data, like the actual part handling time, the actual cycle times to make a part, the variation in the overrides during producing, differences between planned and actual process parameters. These capabilities help build more insight into the production process and make sustainable changes for the future. In this way vimana makes Total Production Efficiency a reality for the manufacturing shopfloor.

Total Production Efficiency The capabilities of vimana are delivered to the manufacturing customer using a customer value

framework (CVF) model.

Based on extensive user feedback, System Insights developed an engagement model unique for the manufacturing industry en su r i ng t hat eac h manufacturer is extracting maximum value from v i ma na’s capabi l it ies. vimana is first applied in defining a baseline of the plant’s productivity and device utilization.

Following this initial process, vimana is used in identifying opportunities for improvement, and as the improvements are implemented, effectiveness is measured using vimana.

E xec ut ion of t h is framework has proven to deliver significant economic benefits to manufacturers regardless of the current state of their business cycle.

For expanding businesses, the increased capacity derived by deploying vimana

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material

in a CVF engagement model is applied toward growth targets, avoiding new capital expenditures that would otherwise be required to meet expansion goals. Companies applying this new capacity against backlog realize increased profits. Businesses simply looking to reduce cost can eliminate equipment and labor expenses.

By combining MTConnect and Big Data technology, Sobel and Vijayaraghavan pioneered an innovative and indust r y-f irst software solution and engagement model for Total Production Efficiency.

Aptly named System Insights, these pioneers overcame the limitations of OEE by delivering sig n i f ic a nt e c onom ic benefits to the discrete manufacturing industry in all phases of a companies’ business cycle.

handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists. trcutler@trcutlerinc.com

Be manufacturing | 27

written by: Thomas R. Cutler

A LEAN SUPPLY

Food safety requires complian Florida-based PACA Foods ha improve quality acros

28 | Be manufacturing

Food Safety

AN FOOD Y CHAIN

nce with stringent regulations. as found a solution that helps ss the whole business

Be manufacturing | 29

P

reston W. Blevins is the author of the just-released book Food Safety Regulatory Compliance, Catalyst for Lean and Sustainable Food Supply Chain. Blevins aids comprehension of the salient issues by concluding each chapter with an extensive quiz.

Normally, large companies have the resources to fund the implementation of best practices, small companies less so. Blevins’ text is a roadmap for the small food manufacturer and shares how any organization can achieve world-class excellence in operations and supply-chain management.

There are many examples of small food companies that have taken a path from few quality and safety controls to world-class excellence.

PACA Foods is a foodproduct manufacturer that focuses on dry-blended

food products including spices, nutrients, flour, and sugar based products. All products have private labels and are produced on a custom and proprietary basis.

The Tampa, Florida based food company manufactures products for retail, food service, and industrial (other food processors) customers, including all aspects of a product’s dry portions. Producing quality product, delivered efficiently, at the lowest possible cost is a challenge.

Michael Shepardson, CEO and President of PACA Foods, shared how the firm went from no computerized inventory control system for the first fifteen years of its existence to evaluating programs that had the capability of integrating with QuickBooks.

Jay McLennan is the Manager Supply Chain and Planning at PACA Foods.

“One of the key initiatives of the new ownership group was to attain an SQF level II certification” 30 | Be manufacturing

Food Safety McLennan was charged with gaining better control over quality and safety processes, noting, “One of the key initiatives of the new ownership group (when they took over two years ago) was to attain an SQF (safe quality food) level II certification; some key components of which are documentation and inventory/lot code tracking.”

The company implemented MISys (www.misysinc.com) and was able to manage many historical HACCP (hazard analysis critical control points) issues in a proactive fashion by verifying and recording every lot code as inventory comes through the door and trace it as it moves through the different processes within the facility. “We can now even track it at the FIFO layer which greatly adds with our inventory rotation; a critical component for our inventory control here, since many of our products have short and varied shelf lives.

We have passed every mock recall and SQF critical control point for purchasing and inventory control since we launched the MISys solution,” reported McLennan.

Safety considerations PACA has some items that are allergens and have to be specially handled and specially located in the company warehouse.

McLennan noted the company even runs peanut products now which require a very high level of attention to safety, since a mistake could be potentially fatal.

The requirements for special handling, clothing, testing, equipment and production are now all maintained in the same software solution that has improved quality control procedures.

“The chances for a mistake are down to almost nothing and we have enjoyed an increase in both this kind of business and in the speed in which we produce it. We are now so confident in our abilities that we are actively pursuing business that requires even more stringent controls, like working with meat products that require full FDA and USDA compliance.

“We recently had an entire truckload of a potentially hazardous item come in. It ran acceptable at first, but then started setting off our

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metal detectors. We didn’t have a service failure to our customer, and were able to tell exactly when the problem started. We were able to identify which of three lot codes on that one receipt was the one that caused it. The manufacturer was extremely grateful not to have the entire shipment rejected; we were able to replace the bad lot in time, never stopped running and were able to make our delivery on time, complete, accurate and most importantly safely,” enthused McLennan.

Transparency drives both quality and safety Food manufacturers globally have reported the advantages of the transparency of the MISys system. The ability for all users to see live real time information results in greater efficiency and fewer errors.

Previously, whenever there was a question regarding inventory levels, lot codes, or expiration dates, staff had to physically stop, leave the production floor and come to the office to ask the inventory control manager. Now all they need to do is consult the closest computer or ask

the nearest supervisor on the floor who has access. The result is far less downtime and production interruptions on the floor. It has also resulted in the purchasing and inventory personnel focusing on more value added tasks. Previously there was a line to the door of the purchasing manager’s office and now PACA can go days at a time without a production question being asked.

PACA has actually enjoyed a cost of sales reduction during a mildly inflationary period, while some key blended food items and ingredients (like

Inventory reduction + reduced carrying costs - MISys Investment = $169,980 $210k

Reduced Carrying Costs

$185,000

Inventory Value: $500,000

$170,000

$170k

Typical System Configuration:

$155,000 $140,000 $125,000

$50k

y Re Inve ntor

$90k

duc ti

on

$130k

Cashflow $114,660

Cashflow $128,490

Cashflow $169,980

Purchase Cost: $9,170

$10k $9,170

Cashflow $142,320

Cashflow $156,150

• Basic Manufacturing • Advanced Purchasing • Material Requirements Planning • 1 User License • SureStart Implementation • Unlimited Technical Support

$10,340

12mo

32 | Be manufacturing

$11,510

$12,680

$13,850

$15,020

MISys Investmment 24mo

36mo

48mo

60mo

Annual Maintenance: $1,170

Food Safety

“We are now so confident in our abilities that we are actively pursuing business that requires even more stringent controls” anything containing corn) have gone up dramatically.

Being able to accurately forecast and order in a just-intime environment, being able to consolidate items under preferred vendors, and move to less frequent deliveries reduced material and labor costs as PACA has established real economic order quantities and enjoys the cost savings derived as a result.

Scalability Like many other small and mid-sized food products manufacturers, PACA had QuickBooks as the backbone of the accounting operation, yet needed more without abandoning the system.

Shepardson commented: “We analyzed the available programs that had the capability of integrating with Quick Books. MISys was the front-runner from the start…it had all the modules, inventory control, purchasing, MRP, bar-coding, lot control, scheduling that we knew we needed for our daily needs and to begin our plan for continuous improvement.”

No more confusion over which product uses which ingredients or packaging, having accurate costs in FIFO layers provided the ability to quickly analyze inventory and send purchase orders directly from the system. Real cost savings were realized

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material

by loading the qualified suppliers for every item and being able to quote and compare suppliers’ prices, quality, and lead times.

Blevins’ text recognizes how food companies, like PACA Foods, have had to reconcile the global sourcing of ingredients and how that has created a complex supply chain, significant management challenges, and additional regulatory compliance requirements.

The tremendous pressure on food manufacturers can be balanced by leveraging existing investments in food safety regulatory compliance into superior inventory management.

handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists. trcutler@trcutlerinc.com

Be manufacturing | 33

34 | be manufacturing

lean: case study

Adopting the lean approach

More companies than ever before are taking part in The University of Kentucky’s Lean Systems Program. Program Director Glenn Uminger discusses just what it is that makes the lean approach so attractive

written by: Will Daynes research by: Vince Kielty

be manufacturing | 35

I

wouldn’t say I have seen a change in the market in recent years, so much as that I have witnessed an increase in realisation from companies and businesses that in order to implement lean correctly it requires the understanding of management, strong leadership and a complete culture change,” explains Lean Program Director, Glenn Uminger. “So many organisations have tried in the past to implement lean and have come up short in their goal. It is only when they understand that culture change and leadership have to be foundations on which to build that they start to see the benefits take hold.”

The lean approach to manufacturing was first developed by Toyota’s Taiichi Ohno in the aftermath of the Second World War. In the decades since, the lean approach has spread across the globe, delivering vast improvements to the manufacturing sector in the process. It was during the 1990s that Toyota began working with the University of Kentucky’s (UKy) College of Engineering to develop the Lean Systems Program (LSP) to help impart the true philosophy to nonToyota companies in the US. In more recent times the approach has also spread into all areas of business and industry, from health care and retail, through to financial services and government. “When it comes to organisations and businesses using lean,” Uminger continues, “there has certainly been much more movement beyond just production and manufacturing, with all manner of industries realising that this approach applies everywhere, in all

36 | be manufacturing

Students performing standardized work on a moving assembly line

lean: case study

types of businesses and in all parts of the organisation itself.”

In Uminger’s opinion, this desire and drive to adopt a lean approach to business is a direct result of increased competition and a continuous need for self-improvement.

“The first thing we do,” he says, “is give companies a total perspective of what lean is, which includes the concepts of clear vision, leadership, culture change, having the right people in the right places and systematic problem solving methods.”

What people behind the LSP find is that companies that approach them get most excited about the idea of improving their problem solving capabilities, often because they see it as a quick way of getting results by taking something that they do and making it better.

“What we find we have to do in this situation,” Uminger highlights, “is rein them back in somewhat and explain that problem solving is in fact the end game. Having a problem solving culture throughout your organisation is what you want to end up with, but to get there you have to ensure that all the pieces of the puzzle are in place to support such a culture. This includes creating an environment where people feel free and encouraged to raise concerns

and problems in the first place, and having management that shows its appreciation to those who do so.”

This September will play host to the third annual Lean Users Conference and Uminger hopes that it will follow in the footsteps

“The lean approach has spread across the globe, delivering vast improvements to the manufacturing sector in the process” 38 | be manufacturing

lean: case study

Students engage in problem solving and learn to apply lean principles to standardize and improve processes

of the two that have come before it. “The 2012 Lean Users Conference,” he enthuses, “was very successful and provided a forum for a wonderful exchange of ideas between our associated companies, each of which brought with them a very clear presentation of improvements that they had made through their use of the lean approach.”

One such presentation came from a hospital, which highlighted the changing performance of a particular state clinic.

Previously, said clinic suffered from having a 40-day waiting period for those wishing to receive care, the consequences

of which included falling patient numbers and revenue.

“What the hospital did,” Uminger says, “was rebuild the clinic from the ground up using all of the lean principles. The result of this was a reduction of the waiting time to two weeks, which remains a leading figure amongst the clinics’ competitors. This has in turn brought patient levels back up, brought in increased revenue, but most importantly the use of lean principles has led to an improvement in patient care levels.”

Part of the focus of the LSP over the last year or so has been to become

be manufacturing | 39

much more actively involved with those companies looking to implement the lean process throughout their operations.

This has meant a more active approach to coaching, physically going to the company ’s premises and from there developing a clear picture of what a true lean organisation should look like.

“What this approach has done,” Uminger says, “is move us into a real world scenario where we are applying and implementing what we teach. Again, this is a process that takes time, but it is one that has already begun reaping rewards. It also enables us to coach companies on a deeper level, allowing us to apply to the teaching what we ourselves have experience with clients in the field.”

The vast majority of those that use the lean approach would agree that the key to achieving the ultimate goal of being a lean business is having fundamentally good management and strong leadership in place throughout an organisation.

“Leadership is the starting and ending point of it all because it is the leaders who help create the culture that everybody then follows,” Uminger concludes. “I am a firm believer in that principle. It is the essence of what lean is all about and personally I have yet to come across any organisation for which the true lean approach does not work.”

For more information about University of Kentucky - Lean Systems Program visit: www.lean.uky.edu

40 | be manufacturing

Program instructors provide frequent one-to-one coaching to clients taking any course

lean: case study

be manufacturing | 41

Sales & Operations Plann

More than fo S&OP is a hot topic for wholesale companies, here we discuss what it is, and how its sophistication can drive performance beyond that achievable with spreadsheet planning

written by: exact software

42 | Be manufacturing

strategy

ning:

orecasting

Be manufacturing | 43

S

ales and operations planning (S&OP) is an integrated b u s i n e s s management process that was developed in the 1980s

by Oliver Wight. In general terms, it refers to the decision-making processes involved in balancing supply and demand, creating profitable volume and mix propositions, and engaging in optimal asset management.

Its scope is business-wide, integrating financial and operational planning, and linking board-level strategy to on-the-ground day to day operations.

Broad scope S&OP involves a wide range of company activities, the plans drawn up with input from marketing, manufacturing, engineering, finance and procurement to drive the overall financial plan. As such, S&OP is in reality a broad reaching term for how senior management runs the company. It is about creating the optimal balance between goods in and out, and ensuring operations are managed to support profitable

44 | Be manufacturing

sales activities. With sales and operations managers not always automatically aligned, strong leadership and fact-based decisionmaking are essential to get everyone pulling in the same direction. It helps operational leaders need to understand that ‘sales’ is the core of the business, and to focus on ensuring transactions can occur as smoothly and as quickly as possible.

Ownership of S&OP The S&OP is top management’s tool for steering the company.

It helps ensure that day to day operations work towards the business plans agreed upon to deliver the company’s toplevel strategic objectives. This visibility into performance against planning allows senior management to effectively guide lower management, helping them successfully steer the day to day activities at ground level.

Ongoing S&OP is also a dynamic process that needs to be re-visited regularly to remain effective. At the end of each monthly cycle, top management needs to

“S&OP is in rea reaching ter senior manag the com

ality a broad rm for how gement runs mpany”

strategy review the balance of the supply chain and ensure the resources for meeting the agreed business objectives are available. The decisionmakers need to be committed to a continuing cycle of Plan, Do, Check, Act – creating one master outline that delivers customer satisfaction, required profit and, above all, is achievable. The plan should be ambitious, yet achievable.

If it asks for too much, it loses credibility.

S&OP Process As mentioned above, the S&OP process runs in cycles.

Input will come in a variety of shapes and forms, all of which need to be carefully transformed to fit an overall plan clear to all stakeholders.

At all points, it is essential that strategy and execution remain clearly connected.

The starting point is the business’ most up-to-date sales history and committed purchase orders. This input for the sales forecasting process is then considered in combination with current inventory and supply capacity, enabling leaders from sales, marketing, operations and finance to reach consensus on

demand and supply, and on what can be made available to promise.

The output of these discussions needs to be one consolidated plan, one set of numbers for the whole business to work from. A business may work with several scenarios and track actual performance against them. However, it is essential that every scenario is based in realism, with firm indicators that such a level of performance is achievable.

Managing expectations over time Expectations and ambitions then need to be clearly communicated. The vision, mission and goals must be understood by all stakeholders, enabling them to successfully cascade from the long term plans to everyday execution. It’s also important that leaders are able to confidently differentiate between trends and exceptions and adjust plans as necessary – an idea that isn’t flexible is likely to break under strain.

Planning horizons, period sizes and review frequencies should reflect the underlying

Be manufacturing | 45

“By definition, connecting top level strategy with organization-wide operations is a genuinely complex matter� dynamics of the business.

Business with long supply lead times need to look several months into the future, even for operational planning. The time it takes to make a substantial increase in capacity drives the planning horizon for the capital investment calendar. With the S&OP also linking product mix and product innovation plans to operations, most companies should look to plan at least the next 18 months on a rolling basis.

KPIs With a set of well supported plans in place, the business needs to establish the right set of objective criteria to measure progress.

Strategically aligned Key Performance Indicators (KPIs) are the tool for this job, representative of commercial

46 | Be manufacturing

priorities and suited to active monitoring of planning accuracy.

Keeping track of how effective financial and sales volume forecasting has been is a key area. Closely reviewing up-to-date sales volume and revenue data is essential, as are more operational performance indicators like inventory turns, total inventory, lead time adherence, return on promotional spend and new product introductions success.

In general, any business will get a good idea that forecasting was well considered when stock declines steadily to each re-order point, and service levels maintain consistency.

Careful monitoring against well-considered forecasting will also ensure that exceptional occurrences

are highly visible and easily considered for future planning.

The role of IT By definition, connecting top level strategy with organization-wide operations is a genuinely complex matter. Creating an accurate view that touches all relevant processes and stakeholders requires the handling of large volumes of data. To effectively interlink past performance with future expectations, the historical and current information needs to be complete, accurate and highly flexible in how it can be mined, reviewed and presented. In order to serve multiple perspectives, it must be possible to work with the data on a range of levels. This will allow upper managers to visualize the overall status of the business, whilst

strategy maintaining clear links to all operational activities.

Choosing the right tools As a result of these demands, S&OP success is largely dependent on the software employed to support it. Many companies use MS Excel as an S&OP tool, it being easy to configure, flexible, inexpensive and familiar to almost everyone. However, it will always fall short in comparison to a properly configured, integrated planning tool. Excel is not

real time, has poor version management and is not multi-user. As such, it’s a major challenge to use it for effective collaboration.

Spreadsheets have their limitations The information in a spread sheet is relatively static, not easily manipulated and not suited to easy viewing from different perspectives. Deep diving through a top level data set into the various processes that contributed to it is not realistic, while combining separate reports into a useful

top level summary is difficult and time consuming.

In short, Excel misses the manipulative power needed to properly analyze the vast, wide-reaching data streams that hold the information needed to create effective plans. And that’s only in terms of collecting historical data to support planning decisions. Running a set-up where current performance and real time figures can be compared to the plans and then used to effectively update and adjust them is near-on impossible.

Be manufacturing | 47

Dedicated solutions The right S&OP software needs to under pi n management by not only thoroughly analyzing the past, but providing easy access to the business’s ongoing progress against the planning as the cycle unfolds.

It must be collaboration friendly, bringing often highly dispersed, international operations together with any external parties involved in the processes (customers and suppliers).

The ability to create and then manage scenarios is also a key aspect of a good solution, effectively sharing them with a wide community of stakeholders throughout the business’ ecosystem.

Connecting operational pl a n n i ng, e xe c ut ion and financial planning capabilities — ideally at the data and process model level — will support a truly active planning environment

that can be followed closely, adapted as necessary and analyzed fully at each point in the review process.

Workf low management, controlling and cataloguing the passage of information through the involved people is an important part of this.

Dealing with complexity Stakeholders need easy access to detailed reporting on the established KPIs – both vertically within specific operational processes, and horizontally in relation to the end-to-end supply chain – helping management identify the root of issues and make the right decisions when trading off competing values.

In short, the right tool needs to be able to capture and manipulate all business critical information, from right across the company, in whatever form the decision makers require it to make choices with confidence. Base

planning data needs to be available in a range of views and formats specific to the various groups that will work with it, supporting them in releasing the patterns and insights they’re looking for.

Creating the right mix The best results will be achieved when system calculations can be combined effectively with human insight. Think about a system that can combine input from sales and marketing professionals with output from a forecasting engine.

The data tells a lot, but it’s also important to fine tune it with intelligence from the people working closest to the market.

Given the above, creating and then managing a realistic, trustworthy Sales & Operation Plan is obviously a complex process dependent on deep understanding of past and current performance.

“Today’s competition is no longer between individual companies but between networks of companies” 48 | Be manufacturing

strategy

As such, it’s too big and too important a job to be trusted to a tool not fit for purpose.

Why use S&OP? With supply chains becoming longer, wider and more complex, there has never been more “distance” between the raw materials and the consumer. At the same time, modern technology has made it possible to keep all stakeholders informed at every step of the way.

Today’s competition is no longer between individual companies but between networks of companies.

Accurate processes to

optimize a company’s role in these complex environments have never been more important. Without end to end planning covering the entire ecosystem of business relationships, achieving success promises to be a real challenge.

Understanding the customer In addition to the wider reach of company activities, it is essential that businesses respond promptly and effectively to fluctuations in customer demand. Changes in customer needs directly inf luence planning for

logistics, manufacturing and procurement. Companies need to be able to work with these changes effectively, ensuring they are stocked to meet needs without tying up capital unnecessarily.

As product life cycles get shorter, accurately matching supply and demand is certainly not getting any easier. Balancing them to maximize profit has become a key, complex discipline in its own right. Simple, unscientific forecasting, using underpowered IT support, will not give businesses the platform they need to realize their potential.

Be manufacturing | 49

“S&OP is the process to help companies go about making corporate strategy an operational reality�

Solving existing issues Executed effectively, S&OP addresses a wide range of internal issues related to unacceptable lead times, excessive on hand inventories, customer service issues and ineffective utilization of resources. It helps companies move away from finger pointing between sales and operations. It ensures optimal use of resources in accordance with effective execution of the company strategy. And if things do go astray, clear ownership allows problems to be addressed quickly and effectively.

S&OP-driven businesses can provide clear answers to questions around which products will be sold, where and when they should be available, in what quantities and at what price. The planning proposes a framework to deliver on the strategic objectives, providing a clear case for the proposed demand

50 | Be manufacturing

and the business’ ability to profit from it. It confirms that the proposed course is fully executable with the available resources, and marries the projected sales and operations numbers to the annual business plan and budget.

Increased accuracy boosts the margin Improved coordination, communication and team work will result from clearer starting points for processes, and clearer signposting of where activities should be leading. The details will make it clear who is responsible for what, leading to greater ownership and more careful management of day to day activities. More accurate supply plans can lead to leaner execution of manufacturing processes.

L og i st ic s, Warehousing and Distribution benefit from fewer changes, while more precise inventory management (less working

strategy capital in the form of safety stock) results in fewer incomplete orders and better customer satisfaction.

Conclusion S&OP is an integrated set of business processes linking the company’s top level strategy to the day-to-day activities in place to realize it. Although external factors can never be controlled, having a thorough knowledge of the company’s current position and past performance can provide a reliable basis from which to make important decisions for the business’ future.

Having access to a broad and organized information collection, analysis and reporting tool, able to gather and manipulate wide ranges of current, accurate data,

is one of the prerequisites for success. With a clear picture of the business issues that need addressing, it can provide the insight needed to steer the business on a path to success and growth.

Provided strong leadership ensures buy-in from both sales and operational departments, the S&OP’s process has the power to touch the entire business. Detailed plans, based in sound business intelligence and responsive to actual progress, become the blueprint to which the whole company can look for guidance. While sales forecasting can give businesses an idea of where they are headed, S&OP is the process to help companies go about making corporate strategy an operational reality.

Exact develop ERP, CRM, HR, financial and industry-specific business software for more than 100,000 customers around the world. Based in the Netherlands, where they remain market leader in the SMB segment, their on-premise, hosted and cloud solutions focus primarily on manufacturing, wholesale & distribution, professional services and accountancy companies. With offices across Europe, Asia, Australia and America, their internationally oriented products combine with local support to offer real customer value. Read more Exact business insights at: www.the-biz-box.com

Be manufacturing | 51

written by: Tho

Autom

The lessons of ergonomics lear and distribution centers are ra operations by companies lik

52 | Be manufacturing

operations

omas R. Cutler

mation

rned in manufacturing plants apidly being put to use in retail ke Retail Handling Solutions

Be manufacturing | 53

T

he Retail Industry Leaders Association ( R I L A ) conducted an important distribution automation benchmark survey which explored how successful retailers use automation in logistics and distribution systems.

Issues related to the state of automation, satisfaction with previous automation, leading practices, metrics, and key trends revealed the drivers behind automation, operational issues that justify automation, impediments to automation, skills required to support automation, and plans for future automation.

Similarly, the National Retail Federation (NRF), addressed automation among retailers of all types and sizes from the United States and more than forty-five countries abroad including department stores, specialty, apparel, discount, online, independent, grocery and chain restaurants, among others. According to NRF, retailers operate more than 3.5 million US establishments that support one in four US jobs – 42 million working Americans. Contributing $2.5

54 | Be manufacturing

trillion to annual GDP, retail is a daily barometer for the nation’s economy. Keeping these retail employees safe is vital; learning the lessons from manufacturing and distribution essential. The lessons of ergonomics in plants and distribution centers are now growing rapidly at retail operations.

Shelf stocking requires automation “The way retailers stock shelves has not changed greatly over the past century,” says to Brian McNamara, founder of Retail Handling Solutions, based in Falmouth, Maine. He concedes that the process is time-consuming, labor intensive, and fraught with productivity road blocks and the potential for injury and product breakage. With all the advances made in other areas of the store, this key operation function has been largely ignored. (Retail Handling Solutions is focused on making this critically important job faster, safer, and easier.)

Product display & promotion Presenting products in attractive, neat, displays

“The way r stock shelv changed gr the past c

retailers ves has not reatly over century”

operations with clear signage is a proven technique for increasing sales. Unfortunately, this is more difficult than it sounds, and rarely a concern at the manufacturing or distribution center level. Placing pallet loads on the floor can get messy and display requires constant attention and replenishment. Cardboard signage is often f limsy a nd almost never reusable.

One solution is the ADS Box (pictured inset), a product display and promotion system. It is a floor mounted, fully portable, four sided in-store display box which continuously repositions the remaining goods on a pallet at the convenient height of a shopping cart as the displayed products are removed by the consumer.

In addition to maintaining goods at a comfortable, convenient height, ADS Box also provides retailers with a 4-sided customizable “billboard” that can be used to further promote its contents.

Shoppers are offered a bold, clear product message while

never needing to bend or lift the goods into shopping carts. ADS Box is completely reusable, minimizes display material refuse and will last for years. Changing displays is simple and can be done in seconds. Products can be loaded into the display box with a fork truck, pallet stacker, or by hand. Stocking can be done on the store floor or out back. The box is easily moved by pallet truck around the store and just as easily transferred to a different store. The design is shopper friendly, store rugged, and requires almost no store maintenance.

Palletizing/ depalletizing Pallets are everywhere.

While manufacturers and distribution center personnel are accustomed to this situation, the typical grocery store receives hundreds of pallet loads per week.

According to McNamara of Retail Handling Solutions, “They are faced with the job of getting goods from the pallet to the shelf. Whatever

Be manufacturing | 55

“Level loading requires consideration in the retail environment, that manufacturers and warehouse distribution center executives neglect to consider” method is used, it involves breaking down pallet loads which is time consuming, difficult work.”

Here are just a few of the problems associated with manually unloading pallets: • Frequent bending, reaching and stretching • Awkward posture when lifting loads • Walking around pallets in tight quarters to access loads on the far side • Worker fatigue • Increased risk of injury.

PalletPal Level Loader

56 | Be manufacturing

McNamara suggests that the solution for these retailers is a PalletPal Level Loader which makes the job of loading and unloading pallets faster, safer, and easier. These unique devices have been used in thousands of manufacturing and warehousing facilities for over twenty years. They use an internal spring mechanism to automatically

operations adjust the height of pallet loads as boxes are added or removed. Simply by allowing workers to load and unload at a comfortable height and posture dramatically reduces fatigue and the risk of injury.

• Works with pallet loads from 400 - 4500 lbs.

• A u t o m a t i c spring mechanism requires no power • Turntable with anti-friction bearings allows employees workers to spin loads so they are always working on the nearside • Compact design fits tight spaces - The PalletPal 36” x 36” footprint is smaller than a standard pallet • Stable base design requires no lagging - works on uneven floors.

Level loading often requires special considerations in the retail environment, that manufacturers and warehouse distribution center

42 Million Americans working in retail executives neglect to consider.

McNamara suggests a simple, automatic unit which uses a system of springs and shock absorbers to lower and raise loads as boxes are added or removed from pallets. A turntable allows nearside loading and unloading.

No power or air supply is required. Pallet loads up to 4,500 pounds can be handled.

• Rugged tubular steel frame for loads up to 4,500 lbs.

•H eav y- dut y spr i ngs calibrated to bring pallet to most convenient loading and unloading height • P roven linkage design maintains level under uneven loading • Dampener provides smooth,

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material

gradual raising and lowering action, without overshoot or spring bounce • L ow-friction bearing supported turntable for near-side loading and unloading • Phenolic frame cover (optional) • Fork pockets for relocation by fork truck also extend base for free standing stability • L eveling feet (optional) allow use on sloping or uneven floors.

• Free standing, can be easily relocated by fork truck.

Automation has long been utilized in the manufacturing and distribution world; this fact was often instigated by regulatory compliance, OSHA, and fear of other punitive fines and assessments. Worker safety is in everyone’s best interest and that reality is quickly at the doorstep of retailers worldwide.

handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists. trcutler@trcutlerinc.com

Be manufacturing | 57

Food thought

w

58 | Be manufacturing

best practice

d for

written by: Thomas R. Cutler

Best practice in document management drives quality and business performance in the food industry, as JIFFY Mix maker Chelsea Milling can testify

Be manufacturing | 59

T

he Center for Disease Control (CDC) estimates that each year roughly one in six Americans (48 million people) gets sick, with 128,000 being hospitalized and 3,000 who die of foodborne diseases.

Food companies are quickly discovering that the right ingredient, with the best specifications, at the lowest risk and the best price, equals maximum knowledge and leverage.

Relying on quality and food safety departments to provide supplier performance feedback is no longer sufficient. Instead best practice food industry leaders are sharing an information platform with food safety quality assurance (FSQA) departments that provide real-time insights on supplier performance.

These data ensure that suppliers are meeting company specifications, compliant with all company business requirements (such as allergen, kosher, or halal documentation). Instead of evaluating supplier performance purely based on cost and on-time delivery,

60 | Be manufacturing

companies must further measure how well suppliers perform against other critical business needs.

A leader in food industry supplier document management platform, TraceGains’ CEO, Gary Nowacki, suggested the paradigm has shifted and that full insight on supplier performance at the corporate, lot shipment, and ingredient

3,000 People who die of foodborne diseases in the US every year attribute levels is the best methodolog y ensuring food safety and business information. This consolidated view of data typically resides in multiple departments, formats, and silos.

Automated purchase order acknowledgement solutions further assist in the planning of purchases and inventory. Armed with supplier performance data for risk, compliance, and cost industry sector leaders, such

as Chelsea Milling (makers of JIFFY Mix) are able to source the exact ingredients with the exact specifications when needed; this practice optimizes inventory and keeps the lines going.

The Chelsea Milling Company is a 110 year old family-owned business, with a mantra to provide the highestquality affordable product.

The company is a complete vertical manufacturer; it stores the majority of the wheat it uses, processes it into flour for production, and manufactures its own packaging. It ships over 150 million pounds of JIFFY Mixes per year, and its products are available at over 30,000 retailers and foodservice outlets.

Chelsea M i l l i n g ’s commitment to customers means extra attention to quality. But insuring that all suppliers continuously comply with all quality requirements meant that Chelsea Milling staff members were swamped with manual tasks. The company needed a solution that permitted 24/7 quality control without adding personnel or compromising on quality.

best practice

Chelsea Milling was challenged by too many certificates of analysis (COAs) that needed to be manually checked against the firm’s ingredient specifications.

Manual and inefficient processes to retrieve data to support customers’ GFSI audits required additional effort. The inability to predict future performance or to evaluate suppliers on more than price and on-time delivery was troublesome.

There was no early warning of impending problems, which

62 | Be manufacturing

meant operating reactively instead of proactively.

“When suppliers are out of compliance or nearing a violation,” said Nowacki, “the system automatically initiates supplier corrective action requests (SCARs), sends eNotifications to both internal and supplier personnel, and can automatically place suppliers on probation, suspend them, or reject any of their shipments.”

The solution also measures the financial impact of noncompliance and monetizes

the potential damage done in areas such as manufacturing efficiency, finished goods quality, and product safety. It provides a comprehensive purchase order acknowledgement tracking function, with alerts for supplier late or shortshipments that may cause supply chain disruptions.

Supplier document management impacts Average certificate of analysis latency (receipt of COA after material received)

best practice

“When suppliers are out of compliance or nearing a violation, the system automatically initiates supplier corrective action requests” at Chelsea Milling was reduced from 22.3 days to same-day. The company now deals with problems before they are introduced into its supply chain. Proactive quality, food safety, and risk management are standard operat i ng procedu re.

COAs are no longer just backup documents used to investigate problems; rather they have become instant alerts to potential issues.

Digitizing COAs and making them actionable has resulted in a 75 percent reduction in outof- specification lots on the receiving dock. Since COAs are often analyzed even before the shipment arrives, Chelsea Milling can now reject shipments even before they are received, saving the supplier reverse logistics charges and returns processing.

• Significant reduction in ingredient variability makes product output more consistent, thus increasing customer satisfaction.

This also reduces the cost of goods manufactured (COGM).

• L abor needed to check COAs is reduced and COAs are checked with accuracy

and efficiency.

• Staff focused on clerical tasks are redeployed to higher-value problem solving.

• Suppliers receive immediate and collaborative feedback so that they can make adjustments, improving the quality of products while also strengthening their partnerships with Chelsea Milling.

• A ny dangerous materials are immediately identified t h rough cont inuous compliance monitoring, thus eliminating those materials and their suppliers from use.

Most critically, overall risk to the company has been measurably reduced, and the food company continuously receives praise f rom regulatory and downstream auditors for being able to produce complete supplier compliance documentation

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at a moment’s notice.

In today’s fast-paced business the ability to rapidly prove control of the supply chain, wherever it originates is vital. Increasingly, customers require GFSI or similar up-to-date audit on file, as well as the ability to prove that suppliers are similarly compliant with GFSI, HACCP, SOPs, regulatory, and other business-critical requirements.

“In case of a noncon for ma nce of a ny nature, the system can

64 | Be manufacturing

automatically generate and send a supplier corrective action request,” Nowacki noted, “which specifies the problem(s) detected, and highlights the necessary corrective actions to be taken. Suppliers complete the corrective action form and submit the document back.” SCAR automation speeds conflict resolution, allowing all parties involved to return to normal business as quickly as possible, thus minimizing any disruption and business impact.

Supplier documentation storage, whether in file cabinets or in digital formats, may satisfy regulatory retention requirements; it does little to systematically unlock the wealth of business, compliance, and regulatory information contained and required on a daily basis to operate successfully.

Automatically analyzing and score-carding supplierprovided documentation, as it is received, helps food manufacturers and ing redient processors

best practice

aut o m at e do c u m e n t management. It meets regulatory and industry compliance requirements, identifies best and worst suppliers, creates better sourcing with less risk; it automatically raises product quality. Lean best practice

food companies are able to painlessly perform or participate in audits, all without needing to involve the IT department for assistance.

Food leaders experience on average a 56 percent reduction in out-of-spec lot receipts,

Thomas R. Cutler is the President & CEO of Fort Lauderdale, Florida-based, TR Cutler, Inc. Cutler is the founder of the Manufacturing Media Consortium including more than 4000 journalists, editors, and economists writing about trends in manufacturing, industry, material

and a 20 percent reduction in attribute variability, resulting in enhanced continuous improvement, better performing ingredient and raw material inventory, improved cash f low, and long-term brand protection.

handling, and process improvement. Cutler is a member of the Society of Professional Journalists, Online News Association, American Society of Business Publication Editors, and Committee of Concerned Journalists. trcutler@trcutlerinc.com

Be manufacturing | 65

Ismail Dockrat CEO, Denel aerostructures

Nobody’s perfect. What quality or ability do you wish you had?

Someone you would most like to have met, living or dead, and why?

I am beginning to realise that I ought to use patience as a strategy more often than I do. My tendency is towards driving change and making things happen now. I feel that companies must develop long-term sustainability and therefore must be driven by a long-term vision and strategy. Therefore, there are things that leadership needs to do which doesn’t often have an immediate short-term result and requires planning and patience in the execution.

The person I most would like to have met, and indeed I did meet albeit briefly, is Nelson Mandela. He stands as one of the great leaders of the past century, and has been an inspiration to millions of people. He is a man of vision and integrity, and was patient in achieving his objectives. He could not have achieved all that he did had he not also been tough and determined. I would love to spend time with him to understand some of the difficult choices he must have faced and how he dealt with them.

What is the best business book you have ever read, and why?

To be honest I generally prefer reading history and literature and I find that there are great lessons to be learnt from such books relevant to the world of business. A good example for me is the works of Alexander Dumas. One of my favourite works of his is The Count of Monte Cristo. It tells the story of a talented young man who achieves great success driven by the desire for revenge, but who then learns that motives, while they can bring positive results, ultimately don’t bring happiness.

The book is filled with many great lessons in strategy.

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What do you consider to be your major achievement (in life or business)?

Since I was a little boy, I wanted to travel and I wanted to work with aeroplanes. I am very fortunate that my career has allowed me to do both of these things and I enjoy that very much. I feel as if my dreams have come true and I am very grateful for that.

Who or what do you think is overrated?

Social media. The technology is in an early stage and consumers have not yet found

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executive insi ht most important thing is to treat people with respect and if you make a mistake to apologise and genuinely seek forgiveness.

Which one piece of wisdom would you pass on to your successor?

Have a high expectation of yourself at all times.

Who has been your inspiration professionally?

the right balance, style and etiquette for its use. I think a lot of people are going be very embarrassed a decade from now by the amount of information they share on the internet about their private lives.

Social media is maturing as a business tool and will have exciting applications in the future, but it is not going to alter the basic human need for direct face-to-face social interaction and relationships.

What mistakes have you made (professional or otherwise), and what did you learn from them?

Oh, it’s hard to choose, I’ve made so many!

The first thing is to know when you’ve made a mistake and what the mistake is. Then you’ve got to be able to acknowledge your role in it and reasons for letting it happen.

Then you’ve got to be able to reflect and work out how not to repeat the mistake again. The worst mistakes are the ones – as they almost invariably do – which end up hurting other people’s feelings. The

I work around a great bunch of people, and I take my inspiration very often from the ordinary people I encounter every day in our company. I really love working with people and I learn so much from them.

How would you like to be remembered after your retirement?

I hope that I shall be usefully occupied right up until the last, and I hope that people will remember me as a good person who got things done, and was of service to others.

Do you have a quote or motto you live (or work) by?

I don’t have a motto or quote, but I try to uphold the values of integrity, respect and fairness in my dealings with people every day.

Ismail Dockrat is CEO of Denel Aerostructures. www.denelaerostructures.com

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Denel Aerostructures

Making the transition CEO Ismail Dockrat discusses the restructuring programme that has contributed to this South African success story

written by: Will Daynes research by: David Brogan Be manufacturing | 71

CEO of Denel Aerostructures, Ismail Dockrat

Denel Aerostructures

I

n the nearly two decades since 1994, air “At the time that I joined the business,” travel into South Africa has increased by Dockrat explains, “Denel Aerostructures was approximately 70 percent. In fact, during very much in need of undergoing a major the month long staging of the 2010 FIFA transition in order to become a 21st century World Cup alone it is estimated that over aerostructures manufacturing company. one million foreigners visited the country. In order to bring about a major overhaul These figures go some way to highlighting in our manufacturing processes we had to the reason why the aviation sector in this part undertake a massive turnaround programme of the world has undergone such tremendous that consisted of eight core objectives.” growth in recent times.

The first thing the company needed With a heritage that dates back to the to do was align itself with South Africa’s establishment of Atlas Aircraft Corporation national aerospace objectives. The country’s in 1964, Denel Aerostructures is recognised government has identified the aerospace as being one of the leading players in the sector as a priority for job creation and fields of aircraft development economic growth and Denel and manufacture in Aerostructures has made Sout h A f r ic a.

T he the concerted effort to become a leading proponent company’s core capabilities of its Aerospace Sector include comprehensive Development Plan for the desig n, development, Increase in air travel in country. industrialisation and the South Africa since 1994 assembly of fixed and rotary “One of the most important wing aerostructures for things I was tasked with the global market. Past and from an early stage,” Dockrat present clients include the likes of Gulfstream, continues, “was devising a credible business Saab, BAE Systems, AgustaWestland and its plan on which a recapitalisation of the business could be based. Successfully doing so main customer, Airbus.

Today the company is led by chief executive has allowed us to turn the corner from being officer, Ismail Dockrat. Having spent much a loss making business.” Equally as important of his career in the defence and aerospace in this context was the restructuring of the industry, Dockrat joined Denel in 2006, first company’s work programmes. as the chief executive officer of Denel Aviation, As well as bringing several programmes before moving across to Denel Aerostructures to a constructive end, this prompted the in 2010. It was at this time that the company company to sit down with Airbus and was in the midst of difficult economic times, renegotiate its existing contracts for caused through a combination of factors the A400M military transport aircraft including inherited operational weaknesses programme. It was the implementation of a and the on-going global economic downturn. focused operational turnaround that allowed

70%

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2006 Chief executive officer, Ismail Dockrat joins Denel

Denel Aerostructures is home to the largest special processes facility in the southern hemisphere

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these renegotiations to be successful. This turnaround has led to an improvement in the company’s throughput, the introduction of lean manufacturing principles throughout its operation and an increase in its delivery performance. These factors have prompted Airbus to make a long-term commitment to Denel Aerostructures.

Due to the state of the business at the time of Dockrat’s arrival, one of the more necessary steps that needed to be taken was a process of cost-cutting initiatives. This included reducing the physical footprint of the company by twothirds. By reducing the amount of ground it occupied from 75,000 square metres to 25,000 square metres, and by reorganising its production work flows, the company was able to make considerable savings in terms of rental, labour and infrastructure costs.

Being a time of great change, it also fell to Dockrat and those around him to improve the motivation levels of the company’s workforce.

“We have always had a fantastic team here,” Dockrat enthuses, “however motivation levels at the time that I joined were not where they should have been. To improve this we put in a lot of time and effort to really connect with our workforce, engaging with them on all levels and involving them in the decision

Denel Aerostructures

Denel Aerostructures’ capabilities include advanced design and engineering.

Above is an image of the wing to fuselage fairing size in relation to a person

making process regarding how we can take the business forward.”

Another complex undertaking required the company to effectively overhaul its entire supply chain management system. This process allowed it to delegate certain areas of work to local suppliers, things like simple sheet metal work, while refocusing itself on more complex tasks that mix high-end machining and hand-layup composite work with a design element.

“One of the most exciting things for us right now,” Dockrat states, “is the development of new business. We have a strong foundation of work with the likes of Airbus and Gulfstream and we are now actively engaging with all major aerospace OEMs and tier one aerostructure manufacturers to secure new work for the company.”

Last, but not least, the final objective of the turnaround was to achieve good financial governance and a strong control of all

“By overhauling its entire supply chain management system, the company was able to delegate certain areas of work to local suppliers” Be manufacturing | 75

internal controls. Achieving this has helped reassure the company’s stakeholders that it is managing its balance sheet in a responsible manner. “When it comes to all the different aspects of our turnaround programme,” Dockrat says, “we are immensely pleased that we have managed to meet all of the objectives that we first set ourselves back in 2010.”

Arguably the most interesting project that the company finds itself involved in today is the wing-to-fuselage fairing (WFF) work being carried out on the A400M for Airbus.

A highly technical undertaking, the WFF is a large structure that sits on top of the aircraft where the wing section connects to the fuselage.

“Arguably the most interesting project the company is involved with is the wing-to-fuselage fairing (WFF) work being carried out on the A400M for Airbus”

Denel Aerostructures is involved in three work packages for the A400M, the top shells, ribs swords and spars and the wing to fuselage fairing

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Denel Aerostructures

Denel Aerostructures team – together we “Make It Fly”

“Made up of hundreds of composite panels,” Dockrat details, “the WFF has an aluminium frame, the lightness of which has contributed greatly to Airbus’ efforts to reduce the overall weight of the aircraft. In the process of creating this structure we have developed a global excellence in terms of weight saving for our industry and that is something we are extremely proud of.”

The structural and system interfaces of the WFF meant that Denel Aerostructures had to have a digital infrastructure in place that allowed it to communicate and exchange information in real time with all other

partners within the A400M programme. “We are very excited with the progress we have made to date with this programme,” Dockrat says, “and as we now enter the production phase we find ourselves in the perfect position to initiate an accelerated ramp up for Airbus.”

Last November, the company made its presence felt at the 2012 AIRTEC International Aerospace Supply Fair, where Dockrat himself delivered a keynote speech. “Some of the most interesting talks at the conference,” he reveals, “were those that examined, at a broader level, what the future will hold for air travel. I personally feel that this century

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Denel Aerostructures’ world class capabilities include Denel Aerostructures specialises an assembly line; above is the top shell assembly in house Zimmermans allow fo

“Future plans involve establishing a greater footprint in other aerospace markets, namely the business and commercial aircraft sectors” will be a hugely exciting and defining time for everyone involved in this industry, particularly when you look at all that has been achieved to get us to where we are today and all that is predicted to come, what with the rise of numerous developing economies. It certainly makes for exciting

78 | Be manufacturing

reading for us when you think that we have really only just touched the tip of the iceberg in terms of how we are applying advanced materials in composite structures in the development of aircraft.”

Looking ahead, Denel Aerostructures’ future plans involve establishing a greater

Denel Aerostructures

s in advanced manufacturing. Two or expertise in thin web machining

Ismail believes in being hands on within the factory. Mr Dockrat interacts with the shopfloor, and is taught by his colleagues what their job entails

footprint in other aerospace markets, namely the business and commercial aircraft sectors.

“As a result of the work we have on-going with Airbus,” Dockrat says, “as well as that which we have carried out for the likes of Saab and BAE Systems, we believe we have earned a very strong reputation in the marketplace and that is something we want to build on.”

In the commercial aircraft sector, two major procurements on the horizon, involving the regional, state-owned carrier SA Express and South African Airways respectively, bode well for Denel Aerostructures. “What we are doing,” Dockrat concludes, “is actively pursuing

engagement with the likes of Embraer, Bombardier, Airbus Commercial and Boeing Commercial in order to position ourselves appropriately to win business on these programmes. While we have to ensure that we remain competitive in the marketplace, we must also remain realistic and that means identifying the type of work that fits into our technology base. This is what we believe will be the key to our success.”

For more information about Denel Aerostructures visit: www.denelaerostructures.com

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Julphar

Caring for

a country From its new, 40,000 square foot facility in the GerjiJakros region, Julphar is able to supply one of Africa’s fastest growing nations with vital pharmaceutical and healthcare products

written by: Will Daynes research by: Richard Halfhide

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Julphar

A

The facility can produce solid dosage and liquid dosage forms of medicines

s the continent of Africa continues to grow, both economically and in terms of a rising population, the demand for accessible healthcare has never been greater. Amongst a host of rapidly developing countries, Ethiopia is considered to be among the fastest growing African nations. The second most populous country in Africa, Ethiopia is home to more than 84 million people and is now beginning to take its place on the global stage.

Julphar first began providing medicines to Ethiopia in 2005. Since then, its reach has significantly grown. Today, Julphar products can be found in major hospitals, clinics and retail pharmacies throughout the country.

The Julphar Ethiopia plant is located in the GerjiJakros region of the Ethiopian capital. A 40,000 square feet facility designed and built

by Julphar’s engineering and construction division, the plant is cGMP compliant and is working towards international accreditation.

Constructed in conjunction with Julphar’s local Ethiopian partner, Medtech, the plant itself was a result of the country recognising Africa’s economic importance and the need to deliver increasingly sophisticated pharmaceutical and healthcare facilities across the continent.

The official opening ceremony for the plant was attended by a number of very high level dignitaries including the Prime Minister of Ethiopia, HE Haile Mariam Desalegn, Dr Yousif Eissa Hassan Alsabri, UAE Ambassador to the Federal Democratic of Ethiopia, HH Sheikh Faisal Bin Saqr Al Qasimi, Chairman of Julphar and HH Sheikh Saqr bin Humaid

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Julphar

“Julphar is a real showcase for other companies looking to invest into Ethiopia” Al Qasimi. Other distinguished attendees included ambassadors from the region, UAE Government representatives including HH Sheikha Lubna Al Qasimi, UAE Minister of Foreign Trade and the Ethiopian Minister of Health, HE Dr Kebede Worku.

“Julphar is a real showcase for other companies looking to invest into Ethiopia,” said Ethiopia’s Foreign Affairs Minister, Dr Tedros Adhanom at the ceremony. “From the start, this project fascinated me. Expansion of

the facility was factored into the plans from the beginning and for that we are grateful.

We also commend Julphar for bringing international standards to their facility.

We hope this facility will strengthen the relationship Martin Christ between our countries With over 60 years of experience, Martin Christ is the even further and hope this leading producer of, not only routine-process freeze dryers, will bring future investment but also of a series of product-specific, highly specialized from the UAE.” lyophilizers with far ending potential.

The Julphar Ethiopia The range of laboratory- and pilot units provide manufacturing facility marks innovative control systems including a comprehensive a significant milestone in selection of PAT-tools.

Julphar’s history and is a Production units comply to international regulations such as set by the FDA and GMP and will be specially designed major part of its international by our Engineering-Team, following the individual user expansion strategy that will requirements. Completely integrated systems (e.g. vial see the company building a loading systems, isolators) can be offered. truly global footprint.

All units are “Made in Germany” within our ISO 9001T he pharmaceutical certified production. market in Africa is significant www.martinchrist.de and growing, with recent

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Julphar estimates of the continent’s BAUSCH+STRÖBEL market set at between Julphar and Bausch+Ströbel have enjoyed good business $8 and $10 billion. In light relations for over 15 years. Several BAUSCH+STROEBEL of this opportunity, Julphar filling and packaging lines are in use at Julphar plants. undertook substantial BAUSCH + STROEBEL specializes in machines for research when developing pharmaceutical primary packaging. The product range its Ethiopian facility. The includes equipment for washing, sterilizing / depyrogenation, filling, closing and labelling of containers such as ampoules, company took great care to cartridges, disposable syringes, vials and bottles of all kinds. examine those therapeutic B+S-systems are designed to comply with the latest FDA and sectors in the country which GMP requirements and are available for all capacity ranges, are limited or inaccessible starting from laboratory testing and clinical batches to fully in order that the Julphar integrated commercial production.

Ethiopia plant would With more than 45 years of experience and over produce relevant and much 10,000 machines delivered, BAUSCH + STROEBEL is a leading manufacturer of high-quality equipment for the needed medicines during its pharmaceutical industry. production launch phases. www.bausch-stroebel.de HE Ha i le Ma r ia m Desalegn, Prime Minister of Ethiopia, made the following statement at the inauguration of the Julphar Ethiopia facility. “Ethiopia is one of the fastest growing economies in the world, with a growing population. It is important to have tremendous access to quality medicine. I would like to express my appreciation of this project and congratulate HH Sheikh Faisal bin Saqr Al Qasimi for the completion of this project.”

Speaking at the inauguration ceremony, Dr Ayman Sahli, Julphar’s CEO, said: “We are deeply honoured by the presence of Mr Haile Mariam Desalegn, Prime Minister of Ethiopia. His attendance is a clear indication of the strong relationship that already stands between our two countries and we sincerely hope that this relationship continues to grow.”

Julphar recognizes that Ethiopia is an Julphar ensured they produced medicines which were relevent to the African market extremely interesting, dynamic and important

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“With the launch of Julphar Ethiopia, the people of Ethiopia can look forward to even more accessible medicines in the region” market opportunity. Therefore, Ethiopia’s strategic position within Africa made it an obvious choice for Julphar when it was looking at opportunities to develop a real and tangible presence in this vast continent.

Sahli concluded: “We congratulate the Ethiopian Government for the Millennial Development Goals of Ethiopia, particularly in relation to combating disease. We hope to play a significant role in these goals

88 | be manufacturing

and ultimately in the development of cutting-edge, 21st century healthcare in Ethiopia. The opening of this facility is a clear indication of our commitment to this country and the region.”

Dr Mohamed Nuri, CEO of Medtech, commented, “Medtech is proud to play a crucial role in the provision of medicines throughout Africa. The opening of this facility will enable us not only to be a vital supplier

Julphar

The new plant is equipped with state-of-the-art technology

to the local market but across the whole continent. We have worked in alignment with the Ethiopian government and other global health organisations in the planning of this facility and we are excited about the impact this will have on local healthcare.�

Recruitment of 50 local staff is currently underway across areas of quality assurance, quality control, production and maintenance, regulatory affairs and various administration roles. This will cover the initial stage. Further and on-going recruitment will occur as the plant becomes fully operational.

Once fully operational the Julphar plant will produce per annum 25 million bottles of suspension and syrup, 500 million tablets and 200 million capsules. The new plant is equipped with state-of-the-art

technology enabling production of Julphar products not only for the local market but also across the African continent. Julphar has invested 170 million birrs in the construction of the plant.

Ethiopia’s main health problems are said to be communicable diseases caused by poor sanitation and malnutrition. These problems are exacerbated by the shortage of trained manpower and health facilities. With the launch of Julphar Ethiopia, the people of Ethiopia can look forward to even more accessible medicines in the region.

For more information about Julphar visit: www.julphar.net

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the right chem

As a diversified manufacturer of chemicals and a major operator, Coogee Chemicals enters 2013 with the clear a the work that has made it one of the sector’s biggest suc

written by: Will Daynes research by: Jeff Abbott

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Coogee Chemicals

mistry

tank terminal aim of continuing ccess stories

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F

ormed in the early 1970s by thirteen individual investors, most of them farmers, Coogee Chemicals has since created a significant place for itself in Australia’s chemical industry. A privately owned company that is fiercely proud of its Western Australian heritage, Coogee Chemicals is responsible for producing a wide range of industrial, agricultural and mineral processing chemicals for supply to both local and international markets.

Coogee Chemicals’ business today is divided between three core divisions, chemicals manufacturing, tank terminals and transport and logistics. From its tank terminals in Kwinana, Western Australia, the company plays host to many of the major players in the fuel market, while its sulphuric acid terminal is recognised as being the largest acid storage facility in the Southern hemisphere. In addition to this, Coogee Chemicals operates bulk liquid terminal facilities for the import, export and storage of chemicals and fuels, while its dangerous goods transport operations in Western Australia and Queensland complement the services it provides its customers.

Among the many different chemicals manufactured by the company are aluminium sulphate, both in liquid and solid forms, chlorine, copper oxide, ferrous sulphate, hydrochloric and sulphuric acid, methanol, liquid sodium hydro chlorite and sodium cyanide.

As well as its products, Coogee Chemicals continues to invest significant resources into its research into various products and

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Coogee Chemicals

Coogee Chemicals invests significantly in research

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Testing specific gravity

facilities, specifically gem fuel, tiro titanium operating on methanol blended fuel, served by fuel dispensing outlets at each of the and a world scale methanol plant.

A clean burning, high energy fuel made company’s sites across Australia. The first from non-petroleum energy sources, of these vehicles is already on the road, with methanol has been commercially blended more set to follow in the months ahead. into gasoline since the early 1980s and has During these early trials each vehicle will also been successfully used for extending be independently monitored in order to gasoline supplies in highlight its performance and durability. many prominent markets throughout the world.

E lsewhere, Coogee As Australia’s only Chemicals, together with methanol producer, Coogee CSIRO, is developing what Chemicals is in the process it refers to as the TiRO of putting into place an process for the continuous Coogee Chemicals direct production of titanium extensive test program established powder. Coogee Chemicals and trial fleet of vehicles

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Be manufacturing | 95

1.8 Million Tonnes Estimated annual production capacity of methanol plant under construction

Coogee Chemicals operates bulk liquid terminal facilities

96 | Be manufacturing

has been involved in this $12 million project since 2008 and is currently constructing a continuous pilot plant in Victoria, which is the next step towards world-scale production.

The third project that the company is deeply involved in is the construction of the world’s most energy and carbon efficient methanol plant. This high value-add, worldscale plant will utilise an energy efficient, low-carbon manufacturing process in order to provide significant reductions in emissions.

The proposed facility will be one of the world’s largest plants of its kind, boasting a production capacity of approximately 1.8 million tonnes of methanol per annum. The manufacturing process will be based on the scale-up of the LCM technology that the company is currently using to good effect at its Laverton plant. Upon completion, it is expected that this plant will be responsible for setting a new global benchmark for large scale, low carbon chemical production.

Like all responsible corporate entities, Coogee Chemicals is aware of its requirement to meet the environmental, social and economic needs of the communities around which is operates. As well as its commitment to providing a safe and healthy workplace for its employees,

Coogee Chemicals

The company is committed to providing a safe and healthy workplace

the company also promotes their wellbeing by offering a range of services from complimentary health assessments to influenza vaccination programmes.

The company’s facilities are designed and operated so as have as little an impact on the environment as is necessary and, wherever possible, materials are recycled and reused to minimise the amount of waste produced.

By working closely with community groups, Coogee Chemicals is striving to get a better

understanding of the social, environmental and economic implications of its activities.

Such understanding will enable it to enhance the benefits of its activities, while eliminating any negative impact.

Maintaining strong relations with the aforementioned communities is equally as important and as such Coogee Chemicals looks to actively contribute to their on-going prosperity and progress. Its involvement includes providing support to sponsorship

“Coogee Chemicals has developed into a strong, diversified organisation that possesses a strong desire to grow in a sustainable fashion�

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A culture of innovation is maintained

Coogee Chemicals programmes, making donations to a host of important non-governmental organisations and providing employment and training opportunities. One scheme that the company is supporting today is the LyriK youth incentive programme. This aims to recognise and reward young people for their positive acts and provide development opportunities and skills that will assist them in later life.

From its humble beginnings in 1971, Coogee Chemicals has subsequently developed into a strong, diversified organisation that possesses a strong desire to grow in a sustainable fashion. In 2012, the company successfully acquired the chlor-alkali manufacturing business, Elite Chemicals, from GE Corporation. Elite Chemicals’ manufacturing facility is located at the port of Brisbane and is responsible for the production of sodium hypochlorite, hydrochloric acid and caustic soda for the water treatment industry and local industrial customers.

Elite Chemicals’ business also includes operational branches in Cairns, Townsville, Rockhampton and New South Wales, meaning that this acquisition provides Coogee Chemicals with a number of new business growth opportunities. Such acquisitions highlight the fact that the company indeed sees its future as being full of exciting new challenges.

For more information about Coogee Chemicals visit: www.coogee.com.au

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DORCE Holding

Building a better

world A global business in every sense of the word, DORCE plans to build upon all that it has achieved to date.

Deputy general manager Dr. Ferzat Mercan discusses how it intends to do so

written by: Will Daynes research by: Will Kirby Be manufacturing | 101

Fujairah Housing Project UAE

DORCE Holding

T

he legacy of DORCE as a company structural works, DORCE also conducts can be traced back to 1982, all manner of engineering tasks required with the founding of parent for civil and electro-mechanical works company, ALÇE Prefabricated on site. “In addition to its contracting Steel Construction Industry and services, DORCE also owns one of the Trade. What began as a small workshop largest prefabricated, steel structure operation based in the Turkish capital of manufacturing facilities in the world.

Ankara producing minor steel construction “As the many hundreds of projects that works and steel furniture, quickly evolved have been successfully realised over the years to become a key supplier of prefabrication prove,” Mercan continues, “we have always steel structures to some of Turkey’s biggest been a company that embraces innovation.

Nevertheless, what I would identify as construction companies.

The foundations on which DORCE was DORCE’s most important characteristic is built truly began to take shape prior to its its ability to work quickly and effectively under even the most difficult establishment in 1989 when its owners purchased ten of conditions.” acres of land in Saraykoy In destinations across the on which they built its globe DORCE has been able factory. Initially employing to realise projects under not only intense geographical 40 people, it was only five Construction sites environments, but also years later, in 1994 that being simultaneously in the face of man-made the company began to managed at present conditions such as political expand internationally.

“As of today,” states deputy instability and civil war. “At general manager, Dr. Ferzat Mercan, “we present,” Mercan states, “we have several are a holding that simultaneously manages large construction projects under way in 32 on-going construction sites in four Iraq. At the same time we continue to take continents. From our 13 branch offices on work in a number of other countries and agencies we manage more than 550 that present complex political and natural engineers and technical supervisors, and conditions, including Sudan, Niger, Nigeria some 3500 workers.” and Mauritania.”

DORC E prov ides eng i neer i ng, Africa is certainly becoming an ever procurement and construction (EPC) increasing source of work for DORCE, with services for projects that require high the company involved in four on-going EPC quality solutions to operate in extreme and design and build projects. In Mauritania environments. While providing these it is carrying out the 8400 person, Tasiast services to projects that encompass residential village project for mining workers conventional construction and steel and engineers as well as a pre-engineered

32

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process buildings and concrete office building project. Meanwhile in Guinea DORCE has temporary construction camps being established in 23 different locations and in Niger it is undertaking work on the Imouraren Uranium Plant worker camp project. Such projects are executed through its sub companies and branch offices. These assets have helped contribute towards successful operations in the likes of Algeria, Libya, Equatorial Guinea, Morocco, Cameroon and Democratic Republic of Congo.

“Africa is a very important market for us,” Mercan explains, “primarily due to its vast amount of natural resources such as oil and gas and minerals. Across the continent one will find numerous developing countries that are embarking on large construction projects involving mass housing, industrial facilities

and other infrastructure projects. On top of this, many of the world’s leading oil and gas, mining and construction companies operate in these developing nations and that makes Africa a huge market for DORCE.” At the heart of the company’s African growth strategy is an advanced expansion execution plan that encompasses three core themes, those being local manpower, local procurement and local services. When undertaking projects in Africa, DORCE prefers to use local resources as much as possible. “DORCE has always subscribed to the idea of improving local employment and of utilising local manpower,” Mercan enthuses. “Through the appropriate training we integrate local workers with our own qualified personnel and construction technology.”

Similarly, DORCE prefers to utilise local

The 8,400 person, Tasiast residential village project for mining workers and engineers in Mauritania

104 | Be manufacturing

DORCE Holding

“DORCE’s most important characteristic is its ability to work quickly and effectively under even the most difficult of conditions” procurement means and local services when undertaking work in Africa. “When we are awarded a new project,” Mercan says, “basic services that we require to take place at the project site are often provided locally.

Such services include the maintenance of tools and the providing of water and electricity, while the personal needs of our employees are sourced from local markets.

What our local supply and recruitment business model does is to enable low income individuals to develop themselves

and their abilities. This is something we are understandably proud of.”

What it can be equally proud of is the safety excellence award that was presented to DORCE Prefabricated Building and Construction Industry Trade for completing five million man-hours without any accident or incident during its Tasiast project, which in on-going in Mauritania.

During the first week of December the company will be turning some of its focus to London where it will be exhibiting at the Mines and Money Exhibition. “We believe this event to be the most important for the global mining industry,” Mercan says, “providing a huge opportunity for companies to promote their own innovative products and services. We exhibited there in 2011 and found it to be a hugely beneficial experience indeed.”

With the vast majority of the major decision makers in the mining world expected to attend, Mercan clearly has high hopes for this year’s exhibition. “Our fundamental goal over the course of the five days is to highlight the importance of prefabricated and steel building systems to potential mining customers. Furthermore we intend to spread the word about our own ability to operate in extreme conditions and under the

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Pre-engineered steel process buildings and concrete office buildings, Zouerate, Mauritania

DORCE Holding strictest of government regulations.”

If you take a tour through DORCE’s production facilities you will find that the world’s leading manufacturing technologies are being used on a daily basis. “It is unquestionable that as technological developments continue, we will follow these and be one of the first parties to put new innovations to use,” Mercan says.

Additionally, the company is aiming to further draw attention to its contracting abilities. Today in Iraq DORCE is involved in a public housing turnkey project that consists of 1416 houses and 11 social facilities. At the same time it has 20 on-going vehicle station projects underway in 18 Iraqi cities and has recently signed a contract with the government of Basra to construct a reinforced concrete university hospital.

“As we continue to grow,” Mercan concludes, “South America and Australia are also becoming two of our newest target markets, with serious steps having been taken to establish a visible presence there.

We already have four hospital projects under way in Venezuela and these will be an important reference point as we aim to capture new business opportunities.

Between our growth in new markets and the increase in projects we expect to see coming from the mining sector, we feel that the future is very bright for DORCE indeed.”

For more information about DORCE Holding visit: www.dorce.com.tr

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3Q Concrete

Cementing a legacy 3Q Concrete supplies its products to some of most important infrastructure projects in South Africa and has positioned itself perfectly to respond to developments within an ever-changing market

written by: Will Daynes research by: Paul Bradley

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3Q Concrete

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erived from the Latin word and quickly. “We try to emphasise these “concretus”, meaning compact traits and characteristics in all that we do,” or condensed, concrete has had Marais enthuses, “and this all begins with an immeasurable impact on the relationship that we seek to form with both the ancient and modern our customers. We strive to have a personal world with its usage dating as far back as bond with each client, utilising the smaller 800 BC. Today the global use of concrete company mentality that we have that is twice that of steel, wood, plastics and promotes regular interaction.” aluminium combined, and is only exceeded Of course, product quality is equally as by the usage of naturally occurring water. important as good customer relations and Founded in 2006, 3Q Concrete is a the systems and process controls that 3Q South Africa based company specialising Concrete has established throughout its in the production of normal organisation ensure that, and customised readywhile it is able to provide its clients with a cost effective mixed concrete from its form of concrete, it has 12 strategically located batching plants. “We began never once compromised on life as a small operation,” the quality of its product.

The year that 3Q “One of the other explains Managing Concrete was established contributing factors to our Director, Charl Marais, “located in the North West success,” Marais states, province of the country, close to where the “is our f lexibility. As a result of the major platinum mines are situated.” geographic location of our plants and our From there the company steadily grew fleet of more than 80 trucks we are able to by making a number of acquisitions, before follow market demand wherever it may go, eventually becoming a part of Capital Africa mobilising our resources quickly. Indeed, I Steel (CAS), which itself is 50 percent believe that we have now reached an ideal owned by Wilson Bailey Homes (WBHO), critical mass where we have a large enough one of the largest construction companies fleet that allows us to do this efficiently in Africa. “We have expanded nicely in and effectively.” recent years,” Marais continues, “operating 3Q Concrete’s prosperity means that it is primarily in parts of South Africa that able to continue seeking ways to expand its have witnessed a rise in mining activity presence. One of these will see it open up a and positioning ourselves accordingly to new batching plant in the coming months capitalise on positive developments within in the Northern Cape province of South Africa. It is here that it hopes to profit from the marketplace.”

The three q’s that the company derives the extensive iron ore mining activities its name from stand for quality, quantity within the region.

2006

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3Q Concrete

3Q Concrete produce both normal and customised mix designs

With almost 50 percent of South Africa’s economy being in some way reliant upon the mining sector, it is understandable that the industry remains of great interest to 3Q Concrete. “Mines continuously need improvements and modifications,” Marais says, “and concrete is always a core ingredient during these undertakings.”

3Q Concrete is very much a project

orientated company and as such it focuses primarily on areas where construction activity is prevalent, while at the same time being able to continuously assess market levels. This approach to its work means that it is now looking into opportunities to expand outside of its own borders into Mozambique where it foresee lots of potential opportunities for growth.

“The three q’s that the company derives its name from stand for quality, quantity and quickly” be manufacturing | 113

“it’s always important that companies possess employees with a hunger for work and a management team capable of accurately monitoring costs

3Q Concrete aims to open three new batching plants in 2013

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3Q Concrete “While it is fair to say that we do run a tight ship,” Marais says, “at the same time we consider ourselves to be a lean and mean operation.

Our business model allows us to make money even when activity levels in the country decrease. Whereas other large companies often end up finding they become reliant on constantly high volumes of work in order to turn a profit we are unique in that we are equipped to ride the ups and downs of the market and remain profitable.”

During the first half of 2013 3Q Concrete remains committed to opening up at least three new batching plants, while also putting in place the ground work for further expansion in the six-totwelve months following. “Approximately 60 percent of WBHO’s revenues come from outside of South Africa,” Marais says, “and it is because of this that we are more determined than ever before to capitalise on the opportunities that Southern Africa has to offer.”

In order to do this Marais is adamant that the company needs to retain the mentality that has served it so well to date. This means having employees who are hungry for work and taking a pragmatic view when it comes to costs. “Since the onset of the global financial crisis in 2008 it has never been

3Q prizes its employees above all other things

more important for a company that wants to be successful to possess a workforce with a hunger for work and a management team capable of accurately monitoring costs. As times have changed so too have businesses had to adapt accordingly and that is what we have done. By having the right people, attitude, discipline, flexibility and the desire to go that extra mile for our customers we have been able to exceed even our own expectations.”

For more information about 3Q Concrete visit: www.casteel.co.za

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NatSteel

As strong

as steel President and CEO, Vivek Kamra, discusses how the success of NatSteel’s offsite prefabrication of steel reinforcement products and services have helped refocus the business into becoming a total solutions provider

written by: Will Daynes research by: James Boyle

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NatSteel delivers over 1000 different shapes of Cut & Bend products to suit customer needs

NatSteel

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here are very few places,” states President and Chief Executive Officer, Vivek Kamra, “that have provided a good economic environment to operate in over the last year or so. However, despite the challenges that exist, developing economies within South East Asia have remained reasonably robust.”

The economies that Vivek speaks of include those of China, Indonesia, Thailand, the Philippines and Singapore. These are the countries in which NatSteel, a wholly-owned subsidiary of Tata Steel, today employs more than 3,000 employees. Constantly working to push the frontiers when it comes to manufacturing processes, every year NatSteel produces close to two million tonnes of premium steel products for the construction industry in the region.

In Singapore, the company’s steel products are used for residential, commercial and industrial buildings, and infrastructural works like bridges and MRT lines. “Singapore,” Vivek continues, “has strong construction growth in recent times, both in terms of its own infrastructure and through the many housing projects that have risen to cater for an evergrowing population.”

With the population of Singapore touching the 5.5 million mark, moves have been taken to not only improve the housing situation, but also the city-state’s road and public transportation networks. These programmes are helping to drive growth within the construction sector, as are moves to completely revamp Singapore’s fibre optic and power networks. These undertakings are core to Singapore’s growth plans for the next fifteen years.

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NatSteel’s prefabrication facility ensures consistent, high quality of products for customers

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One of NatSteel’s specialisations over the years has been its expertise in providing offsite prefabrication of steel reinforcement products and services. Across its Asian operations, NatSteel continues to witness several key trends that are driving the shift towards these, specifically the demand for higher productivity while maintaining safety standards, manpower constraints, space restrictions at construction sites, a demand for faster construction speeds and the need to reduce material wastage.

“Customers are increasingly recognising the many benefits these products and services have to offer,” Vivek explains. “The biggest of these is the yield benefits customers receive from seeing their amount of wastage fall dramatically, that is perhaps the most positive shift they immediately see when moving away from onsite fabrication.”

Having had success providing offsite prefabrication of steel reinforcement products and services in its core markets, NatSteel now has several initiatives underway to expand its offering into other regions. “Singapore on its own has a very unique geography that lends itself favourably to offsite fabrication,” Vivek says. “What this means is that rather than simply replicating the model we have here, we have had to customise it to suit the different needs or different locations.”

In India it is currently promoting the concept to its parent company while also driving it through small service centres where labour remains competitively priced. “One of the things we are doing in small, built-up locations in India,” Vivek says, “is promoting the idea of offsite fabrication by highlighting how it can actually improve onsite productivity. To date

NatSteel

NatSteel’s logistics service

we have established ten service centres that work to promote these products and services in the country’s major metropolitan areas.”

Elsewhere, the company has commenced with efforts to promote its offsite prefabrication of steel reinforcement products and services in Malaysia and China, where it is establishing a facility in the city of Xiamen. Meanwhile, the company already has distribution and processing centres set up in Australia where it is working with its customers to significantly improve their manpower productivity levels.

“In Australia,” Vivek highlights, “we have made considerable progress in automating

our various lines, thus reducing the labour content required for offsite fabrication substantially. As a result of this, productivity levels in a number of our plants have now reached global benchmarks.”

As one would expect, there are a number of successful case studies that showcase the positive results that have been achieved through the use of NatSteel’s prefabricated solutions and expertise. Perhaps the one that stands out the most was the construction of the Stevens underground MRT Station in Singapore, whose site was located on an existing road junction and in a tight urban

“NatSteel has several initiatives underway to expand its offering into other geographic regions” be manufacturing | 121

setting surrounded by bridges, houses and was subject to heavy traffic volumes. The project was beset by a number of challenges.

These included the extremely limited site space as a major portion of the road had to be kept open for traffic, significant manpower restrictions due to the government’s stringent foreign manpower policies, site safety and a very tight construction schedule. In addition, the delivery of prefabricated cages to site needed to be perfectly coordinated and timed to minimise obstruction to traffic flow and

for immediate onsite installation so as not to choke the limited site space.

NatSteel provided prefabricated cage solutions for the Stevens MRT station’s diaphragm walls. The cages, which were designed and fabricated precisely at NatSteel’s factory with various cage accessories such as lifting hooks and stiffeners, were delivered justin-time in order to help the customer overcome these challenges. The cages were pre-installed with couplers for easier basement construction which saved significant construction time.

“It is clear that the days of NatSteel seeing itself as simply a steel supplier are in the past”

The Sidelifter system from NatSteel enhances the safety and productivity of material handling onsite

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NatSteel

NatSteel’s automated downstream facilities

Furthermore, the customer was able to save a significant cost by eliminating material wastages and by reducing the level of manpower required onsite, while at the same time maintaining a safe working environment.

By delivering its building solutions at the optimum time, NatSteel ensured it did not choke the limited site space, while the use of these solutions helped relieve the customer of the manpower challenges they had originally faced. Furthermore, site safety was improved and better site management was achieved as a result of there being no rebar fabrication activity taking place onsite, while the customer also benefited from the savings they made from elimination onsite rebar wastage.

As Vivek reflects on where the company stands today and where it wants to go in the

future it is clear that the days of NatSteel seeing itself as simply a steel supplier are in the past. “The interactions we have today with our customers exist on the basis of us being a seller of solutions, not steel. As we continue moving our business further downstream we will investigate ways that we can expand and establish more of these solution centres into other parts of South East Asia where growth opportunities in the construction sector exist.

Meanwhile, we will continue to work to offset the challenges our customers face, providing them with ways to improve productivity.�

For more information about NatSteel visit: www.natsteel.com.sg

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Lanka Walltiles

Wall to

wall quality Managing director Mahendra Jayasekera explains how unwavering quality and new technologies have created a leading position in the Sri Lankan ceramic tile market

written by: Will Daynes research by: Abi Abagun

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Lanka Walltiles

W

The company’s products are of the highest quality

hether they are used on walls or floors, to line showers or bathtubs, create countertops or to make decorative accents inside or outside homes, ceramic tiles are today a fixture of buildings the world over. Made from a mixture of clay, sand and other natural materials that are pressed into shape before being fired at high temperatures, ceramic tiles possess a host of beneficial properties, from their durability to the ease in which they can be cleaned, that have turned their manufacture and sale into a multi-million dollar global industry.

Incorporated in 1975 as an export oriented joint venture with Japanese collaboration, Lanka Walltiles is the premier ceramic tile manufacturer in Sri Lanka. Commencing commercial production from its factory in Balangoda in May 1977, the company executed its first export order in July of that same year, and by 1978, 92 percent of its total output was exported.

In 1984, a subsidiary company was incorporated under the name, Lanka Floortiles. From its factory in Jalthara, Ranala, this subsidiary continues to manufacture glazed ceramic floor tiles to this day. A second factory to manufacture glazed ceramic wall tiles was set up in Meepe, Padukka in 1994.

“Over the years,” explains managing director Mahendra Jayasekera, “the two companies have expanded their respective production capacities, while also investing in other business ventures. Today, the two have controlling interests in Ceytea Plantation Management, Swisstek (Ceylon) and Swisstek

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Lanka Walltiles Aluminium Limited.”

At current levels Lanka Since its foundation in 1977, year after year Smaltochimica Walltiles and Lanka Floortiles has focused on becoming one of the market leaders in the have the capacity to produce production of specialty chemicals for the ceramic industry 7500 square metres of wall worldwide. Thanks to constant research and development, tiles and 11,800 square the company has continued to grow, developing and finemetres of floor tiles per day. tuning all ceramic applications including the recent digital decoration method.

“In recent times,” Jayasekera These continuous technological developments as well the continues, “we have invested quality of the products constitute important assets for considerable capital in Smaltochimica. “Nature” is a new eco-friendly product lineup building up our capacity and which makes use of natural raw materials that minimize the upgrading the technology in percentage of petrochemical products in the formulations. our factories, always keeping www.smaltochimica.it abreast of developments within the industry.”

The company’s products are of the highest quality and compare with the very best tiles found elsewhere in the world’s leading markets. This attention to quality sees its products being exported to all four corners of the world. “Particularly strong markets of growth for us,” Jayasekera says, “include Australia, Canada, Pakistan, Oman and the Maldives. Other export markets we serve include Japan, Singapore, the Netherlands, New Zealand and Sweden. In more recent times we have also successfully re-entered the US market as part of our plans to expand our export operations further.”

Smaltochimica

7,500 m

2

Lanka Walltiles’ daily production capacity New kiln

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For more than 35 years, Lanka Walltiles has been a major force within the ceramic tiles sector and it has remained as such by playing to its core strengths. The company’s highly skilled technical staff are supported by the very best production equipment and new technologies. “In possessing a high level of quality consciousness that ensures its products

conform to the most stringent of international standards,” Jayasekera enthuses, “the company has built up a loyal and longstanding customer base in both local and international markets.

In the local market our presence over nearly four decades has also allowed us to establish a strong distribution and dealer network, a chain of franchise showrooms and of course

“For more than 35 years, Lanka Walltiles has remained a major force within the ceramic tiles sector by playing to its core strengths”

Automatic palletizer

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Lanka Walltiles

Effluent treatment plant

company owned showrooms, It is not only in hotels making us highly visible where one will find said throughout the country.” tiles. They have also been These strengths have seen put to use within the the company’s products used Uma Oya Multipurpose in a number of high-profile de ve lopme nt pr oj e c t , Lanka Walltiles incorporated projects. Hotels feature the Sir John Kotelawala Defense University Medical prom i nent ly a mongst Facult y, the Ratnapura these projects, with Lanka Walltiles and Lanka Floortiles products General Hospital and the Api Venuwen found within the Chaaya Bey Hotel in Api Housing Projects.

Beruwala, the Anilana Hotel in Pasekudah, While understandably proud of its the Kukuleganga LAYA Leisure Hotel, the accomplishments, the company has its focus Club House Hotel in Uswetakeiyawa and set firmly on the future and how it can expand within Jetwing Hotels’ Yala Properties. and grow further. “In May 2011,” Jayasekera

1975

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New kiln

“While understandably proud of its accomplishments, the company has its focus set firmly on the future and how it can expand and grow further” says, “we commissioned our newest plant in Meepe. The month after this, commercial production began and this took production capacity up by 67 percent. We followed this up in January 2012 with a further 40 percent increase in production capacity at our floor tiles factory and this has now given us the ability to produce glazed porcelain tiles in sizes of 300 by 600 millimeters and 500 by 500 millimeters. Such abilities allow us to

132 | Be manufacturing

cater to new segments in the market and thus increase cash flows.”

Jayasekera further states, “another new investment has been made that enables us to produce special trim tiles to complement our wall tiles, something that is essential to our success in the US market. At present we produce bull nose tiles, quarter rounds and chair rail moldings, and we plan to increase our range of trims and moldings in due course.”

Lanka Walltiles

Effluent treatment plant

New investments have continued to be made over the course of the last 12 months, the most exciting of which being the digital printing machines that have been installed at both tile factories. “The process,” Jayasekera states, “operates through two state-of-the-art Italian machines from SITI B&T (Keramagic) and TECHNOFERRARI. What we have found is that the use of digital tile decoration dramatically shortens the path from idea to finished product, while also bringing numerous other advantages to the process by being the most efficient and sophisticated tile decoration system on the market.”

Quick processing times allow the production of premium replicas of natural designs and textures, including stone, marble and wood.

Furthermore, this cutting-edge equipment

Rectification and chamfering of tiles

has the capacity to decorate relief surface, where a design can be printed on any surface of tile, regardless of shape, depth or contour.

“This technology,” Jayasekera goes on to highlight, “guarantees a seamless design that covers the entire tile, giving it optimum aesthetic appeal and consistency in color intensity, with the capability of high-definition printing of up to 12 colors at 1000 DPI (dots per inch). Digital tile decoration also opens the prospect of producing a scenario where, much like with fingerprints, no two tiles need be the same.”

For more information about Lanka Walltiles visit: www.lankawall.com

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Trail blazing British American Tobacco is realigning its supply chain function to improve operational efficiency. Bernd Meyer, Global Head of Plan, Logistics and Service explains how

written by: gay sutton research by: Vincent Kielty

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British American Tobacco

Cigarette manufacturing

British American Tobacco

O

For the past 12 months, as head of Global ne of the most challenging tasks facing any organisation Plan, Logistics and Service, Meyer has had is initiating and embedding an enormous and very influential remit. change. When managers British American Tobacco has a network exhibit talent in this field of more than 40 cigarette factories in 39 they tend to become corporate trail blazers or countries, additional contract and license trouble shooters, brought in to solve problems manufacturing agreements and a range of or implement changes that will improve the top quality products sold into approximately business or develop operational best practice. 180 markets worldwide. In addition to When we last spoke to Bernd Meyer manufacturing, British American Tobacco of global tobacco giant British American owns and manages a portfolio of leaf Tobacco he had successfully transformed the growing operations, thereby managing risk massive South African Heidelberg cigarette in the supply chain, and actively working to factory from an underperforming operation guarantee quality at farm level. based on manual labour With an organisation of to a highly automated and this size and complexity, the company has developed high performing state-ofa matrix management the-art factory. Along the structure. The corporate way, he elevated working headquarters oversees procedures, processes and Number of British attitudes so that Heidelberg strategy and companywide American Tobacco today is an exemplar of functions while decisions are cigarette factories British American Tobacco’s taken as close as possible to around the world the local stakeholders. Each culture. At that time, he region has implemented was preparing to move to corporate headquarters in London where a the British American Tobacco processes, newly created role awaited him. procedures and best practice, but has the “The supply chain at British American leeway to adapt them slightly to fit with local Tobacco has traditionally been split according customs and market expectations. to the plan, buy, make and move model,” By folding together the planning, logistics Meyer explained. “We had separate functions and service departments into a single function for manufacturing, logistics, planning and the company believes it will achieve significant service and procurement. None of these improvements in efficiency and performance. functions are new. What is new is that we “Planning is very closely linked with both are rolling three of them together as the Plan, logistics and service, and the functions were Logistics and Service function, leaving just continuously in communication with each manufacturing and procurement as separate other,” Meyer said, “so it made sense to have supply chain functions.” them operating under the same roof.”

40+

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We understand that the successful integration of your supply chain starts with the successful collaboration with your supply chain partner.

That’s why every day, our 63,000 logistics experts across the globe are committed to working towards the same goal – to operate as a true extension of your business.

Learn more www.kuehne-nagel.com

Over the course of its 120 year history, Kuehne + Nagel has evolved from a traditional international freight forwarder to a leading global provider of innovative and fully integrated supply chain solutions. Its global logistics network, cutting-edge IT systems, in-house expertise and excellent customer service are proof of the company’s dedication to be the market leader. These attributes have placed Kuehne + Nagel at the forefront of the logistics industry, and positioned it to continue increasing the scope of customer solutions and services.

Kuehne + Nagel provides BAT with end-toend logistics expertise that supports its core business strategy. The two organisations entered into a strategic partnership in 2009.

The foundations of this partnership are built on the companies shared objectives of continuous improvement, identification of cost savings and enhanced service levels to support global production and through the secondary supply chain.

As one of the world’s largest logistics providers, Kuehne + Nagel offers BAT a truly global network. Kuehne + Nagel is uniquely positioned with a single operating system across the globe, allowing all logistics activities to be coordinated seamlessly.

1140| DECEMBER 2012 | Be manufacturing

BAT British American Tobacco

These activities include global air and sea freight services, warehousing and distribution, and fully integrated logistics. BAT operates from a range of diverse geographies and relies on this consistency and transparency. Equally, BAT demands specific local knowledge and the ability to react quickly to events, which Kuehne + Nagel can provide thanks to its worldwide coverage.

Pacific region. The Singapore LSC continues to deliver cost savings for BAT through the implementation of a wide range of value added and continuous improvement projects.

The LSC concept in both Birmingham and Singapore has improved delivery service performance through strong supplier management and provided on-going enhanced shipment visibility and reliability.

Kuehne + Nagel is responsible for the transport planning of all the inbound global leaf movements from 103 suppliers, from 41 origin countries to 43 factories. The introduction of a Logistics Service Centre (LSC) based in Birmingham for the Global Leaf Pool (GLP), has supported significant savings for the global movement of leaf tobacco. Working together with Kuehne + Nagel, BAT has achieved double digit percentage improvements in its global On-Time-In-Full performance standards.

Kuehne + Nagel also provides storage and finished goods distribution services within Germany and Greece providing high level secure warehousing and distribution services on behalf of BAT’s secondary market. The multi-location stockholdings are strategically located to support the secondary supply chain on behalf of BAT in these vital market areas.

In addition, Kuehne + Nagel operates the logistics service centre based in Singapore to support the Asia-Pacific region on behalf of BAT. Here, Kuehne + Nagel is responsible for end-to-end order and supplier management of inbound and outbound logistics, initially for the Singapore production facility that provides scalability for the complete Asia-

Innovation and continuous improvement are key to successfully implementing logistics solutions that support the changing needs of BAT’s dynamic business. As the supply chain evolves, Kuehne + Nagel aims to strengthen its partnership with BAT, extending its range of logistics services into more geographies and into wider areas of BAT’s business, acting as an enabler for growth.

www.kuehne-nagel.com

DECEMBER 2012| |1412 Be manufacturing

The planning function is very much a strategic one. Operating across British American Tobacco it is responsible for defining the processes and systems by which the company operates, for contingency sourcing and providing a significant input into the global sales and operations planning process. It also conducts global planning for the factories and plans the roll-out of new products and initiatives. The unit therefore examines, standardises and rolls out supply chain processes and procedures across the entire global supply chain. It reviews and defines the optimum global factory footprint, designs the warehouse and supply networks and optimises them to ensure they are always the best fit and

will deliver competitive advantage, and it is responsible for global production and logistics planning.

It is therefore easy to see why planning should be brought together with logistics, which oversees the movement and storage of materials at both ends of the supply chain. The logistics function defines logistics strategy, is the primary contact for communicating and negotiating with outsourced logistics partners such as Kuehne & Nagel and DHL, and provides worldwide logistics network modelling, logistics operating standards and best practises for the regions in close partnership with planning.

The same synergies can be found between planning and service, which provides the

Quality checks are carried out at each stage of the cigarette making process

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British American Tobacco

“Before you can execute savings opportunities or alter ways of working, someone has to put a good idea down on paper” global marketing function with supply chain support and helps to transform an idea into a commercial product. If, for example, a new product is being proposed the service/innovations delivery department will examine the feasibility of producing it: how and where it will be manufactured, materials sourcing and supply, time frames and lead times, and so on. All of this is done

in collaboration with planning where factory footprint, production planning and material sourcing decisions are made.

Meyer’s challenge as head of the new global function is to bring these previously independent sections successfully together and build a fully integrated high performance unit.

The process initially began at headquarters in London where Meyer has a staff of 14. “We have designed a blueprint structure for the function, and this is being rolled out in the regions and even to some extent on a local level where planning, logistics and service are now growing together,” he said. “So far, we have established good communication and a close relationship between the global function and the regions, and there is a good sharing of information and experience.” All of which are a tribute to the success of the change management process.

Beyond integrating the three existing functions into a new single corporate unit, Meyer is responsible for continuing to drive business improvement. From the supply chain perspective this entails removing costs from the business, increasing its efficiency and improving environmental performance, all of which are closely interlinked.

Achievements in this area are ongoing and incremental. For example, network

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modelling is being used to identify where changes can be made to the logistics and warehouse networks to reduce the travelling distances for products. Making changes to product attributes like packaging or format, volumes moved, or even the number of times a product is handled are also helping to reduce costs, and improve efficiency and environmental performance.

Many purely environmental initiatives are also in progress. For example new trucks are specified to incorporate start-stop technology to reduce fuel consumption and emissions, while warehouses are designed to make the most of daylight and to use only energy saving lighting when illumination is required. Considerable work is being done to aggregate purchasing at a regional or even a global level, and this delivers cost savings through bulk purchasing.

“We’re also looking at ways of improving our flexibility and responsiveness to changes in demand, and our speed in rolling out changes quickly. However, improving efficiency is very much about challenging existing ways of working and defining incremental process changes that will improve the efficiency of the whole.” This is a primary function of planning, where new processes are continuously being evolved, designed and then standardised across the entire business.

All core planning, logistics and service functions rely heavily on the company’s world class IT systems. “We use SAP APO, and this gives us complete global transparency with regard to demand and supply figures,” Meyer commented. “Our IT systems obviously also play a very important role in defining and delivering improvement, but human input always has to come first. Before you can execute savings opportunities or alter ways

“I believe the secret of a successful company is how they gather the best ideas from their staff, grow them and replicate them across the business” 144 | Be manufacturing

British American Tobacco

Tobacco field in Uganda

of working, someone has to put a good idea down on paper. And I believe the secret of a successful company in the longer term is how they gather the best ideas from their staff, grow them and replicate them as fast as possible across the business. So improvement is essentially all about communication and people,� he continued.

To achieve this, the company works on the principle that people have to be educated and provided with the right knowledge and expertise, and will then readily identify and propose ways to drive efficiency. Supporting that principle, Meyer’s department works closely with corporate HR designing the content of all training courses for logistics, planning and service personnel, and in some cases his staff also deliver that training. This

approach not only raises skill levels, nurtures British American Tobacco corporate culture and cements communication with functional staff from around the globe, but standardises these across the organisation and drives improvements in performance.

As the integration of planning, logistics and service becomes stronger across the organisation, this focus on skills and getting the best from people will become increasingly important. It is a talent that Meyer has honed and demonstrated over many years of successful change management.

For more information about British American Tobacco visit: www.bat.com

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Sohar Aluminium

LIGHT AND LEAN IN OMAN Sohar Aluminium has the world’s longest single potline at 1.2 kilometres long: it is contemplating expansion that would triple its existing capacity while continuing to support Oman’s economic and social growth

written by: John O’Hanlon research by: Robbie Hodgson

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Part of the company’s mandate is to create jobs

Sohar Aluminium

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ike its neighbours Oman developed its economy on oil and gas, and like them it is now trying to diversify that economy by establishing industries that will sustain its growth over decades to come. Oman occupies a favourable position on the east coast of the Arabian desert peninsula so in 2004, with the strategically placed Port of Sohar designated as a major industrial hub it made sense to set up an aluminium smelting operation there.

Being a heavy consumer of electricity, aluminium smelting is in the process of moving away from the industrial nations of the West where energy is relatively expensive, to the Middle East and other countries where power is cheap. With a ready supply of gas that would previously have been flared off from the oil wells, many of the oil producing countries are capable of generating large amounts of power at a relatively low cost, and this is ideal for the power hungry smelting process.

Sohar Aluminium was established in 2004 as a flagship enterprise on the Sohar site.

It has three shareholders, the governmentowned Oman Oil Company and TAQA, a subsidiary of Abu Dhabi Water and Electricity Authority, holding 40 percent each and Rio Tinto Alcan the remaining 20 percent. The plant currently produces 375,000 tonnes of aluminium per annum, and employs a workforce of 1,000 people, though CEO Henk Pauw estimates that it supports around 3,000 jobs in the Sultanate if downstream industries are taken into consideration.

One such business, a $388 million aluminium rolling mill is currently under

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Studies, Expertise, Prefabrication, Erection of High Current Busbars (Al/Cu) and Aluminium Smelters Maintenance • CLAUSER DUNKERQUE • CLAUSER MIDDLE EAST • CLAUSER ST JEAN MAURIENNE

www.clauser-sa.com - clauser@wanadoo.fr

SOHAR Sohar ALUMINIUM Aluminium CLAUSER MIDDLE EAST

Clauser develops modern solutions to meet the needs of industry in the field of highcurrent electrical installations. The company specializes in the design and implementation of high-intensity drivers, and maintenance in the electrolysis process. The company was created in 1963 near the Pechiney plant in Saint Jean de Maurienne, in France. After its participation in the construction of the Pechiney plant in Dunkirk, the Dunkirk agency was created in 1992 in order to best serve its customers. After involvement in modernization projects, expansion and outsourcing of maintenance for the DUBAL plant, an agency was established in Dubai in 2007.

• ‘Special’ works within potlines • Earth trolley manufacturer and user

Core businesses: Maintenance in aluminium potlines: • Superstructure refurbishment • Anode beam refurbishment • Anode repair (stem and yokes) • Potshell repair • Welding on ‘live’ busbars • Cell replacements • Risers and cathode flexible welding

Secondary businesses • Design • Manufacture • installation • Aluminium and copper conductors for high-current electrical facilities • ‘Live’ busbar connection.

Busbar expertise (from 1kA to over 500kA): • Design • Manufacture • Installation • Aluminium and copper conductors for high-current electrical facilities • ‘Live’ busbar connection We are also qualified welders for all types of on-site and factory welding, including steel, aluminium and copper, and we have the capability to saw large aluminium and copper block/bars (800mm high by 5m long).

www.clauser-sa.com

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Show the world what your company has to offer with our tailored packages

Seen www.bus-ex.com

Sohar Aluminium construction and expected to come on stream in August Fives Solios is proud to have participated in the 2013. “Our target is to pass construction of the Sohar Aluminium’s smelter, with: 60 percent of our output • A 36 tph Green Anode Plant implemented for the first on to Omani companies,” time both RHODAX® for dry material preparation and says Pauw. “We’re not there IMC® (Intensive mixing Cascade) for paste preparation yet, and there’s still room • Two Gas Treatment Centers to treat pot emissions fitted for improvement. But once with TGT-RI filters the rolling mill is up and • One Fume Treatment Center on anode baking furnace •F our 80t capacity tilting Holding Furnaces along with running we will be getting the Water Cooling System for the casthouse close to that target.” Another • A Liquid Pitch Marine Terminal with two 5,000t nearby factory takes a capacity tanks. proportion of the output This project strengthened Fives Solios’ position as a for high voltage cables. By turnkey technology provider for the Aluminium Industry. manufacturing from liquid www.fivesgroup.com aluminium direct from the smelter, the cable factory is able to operate at competitive cost, bypassing the metal melting process most of its competitors go through.

The smelting plant itself is powered by a 1,000 MW combined-cycle captive power generation facility (CCPP) designed and built

by Alstom and owned by Sohar Aluminium, which produces abundant low cost energy fuelled by natural gas that is supplied under the terms of an agreement with the government of Oman. The generation facility consists of two blocks, each with two Alstom

Fives Solios

$388 million Following the plant’s expansion the projected capacity will be 1,000,000 tonnes per annum

Investment in downstream rolling mill for completion this year

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GTI 3E2 gas turbines exhausting to a heat recovery steam generator with a common steam turbine.

The availability of cheap fuel and low labour costs do not mean that the plant can ignore world-class process standards or the need to conserve energy. Drawing on his ten years’ experience in the automotive industry Pauw introduced lean practices at the plant and has been developing them through training, encouraging a mindset of empowerment and responsibility among employees. “The principles are always the same,” he says. “Lean is about focusing on waste and empowering people on the shop floor. It’s about toolboxes and data, about

Sohar aims to be a role model for industry in the Gulf

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taking responsibility and doing something about it—not blaming other people.”

The Sohar Aluminium Academy based at the plant provides a comprehensive programme of training, from welding and technical courses through to safety, management and leadership training. “We started our first lean workshops about two years ago and have been rolling it out over different departments. Most of our leaders have completed a three-day lean session where they have learned about the principles of lean and about the lean toolbox.”

Sohar Aluminium is something of a pioneer for lean in Oman. Sohar Aluminium being a new business built from scratch it had the

Sohar Aluminium

“With lean, we are turning the traditional hierarchical management pyramid on its head and creating a serving leadership and not a boss leadership” opportunity to introduce lean thinking from ground level among its employees, many of them new to working in industry. Coming from a society that values authority Omanis are sometimes slow to realise that the opinion of a shop floor worker is as valued in a lean environment as that of senior managers.

“With lean, we are turning the traditional

hierarchical management pyramid on its head and creating a serving leadership and not a boss leadership.”

Looking to the future, Pauw’s objectives go well beyond achieving the expansion project. Good management has kept the plant self sufficient in terms of finance, and he is determined it will stay in the black, offsetting any straitening in global markets by cost reduction and continuous improvement – lean manufacturing is a never-ending process. His targets are by no means limited to things that can be demonstrated on the balance sheet. “We want to create future leaders for Oman. We believe we have a job training role to play, and I would like to see some of our Sohar Aluminium employees find jobs in other companies and to be recognised as the best employees to have.”

And these principles extend beyond the direct workforce. Last year Oman’s Public Authority for Craft Industries (PACI) has signed a memorandum of understanding with Sohar Aluminium to set up a training centre for aluminium craft work on the company’s premises. The two-year training programme aims to enable women to become entrepreneurs and produce aluminium handicrafts. According to the

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Plant exterior

Sohar Aluminium agreement, PACI will provide trainers and study material while Sohar Aluminium will provide the faculties and funding for the programme, while the centre will train selected women from low-income families in the local community in aluminium craft manufacturing.

So what of the future? Following an extensive study on future demand locally and internationally Sohar Aluminium is planning to invest around $4 billion to ramp up the capacity of its plant to 1 million tonnes a year. Following weak prices in 2012, global aluminium is showing a positive trend in early 2013, with good potential for growth. “There’s a need for two or three new aluminium smelters a year globally just to keep up with demand,” estimates Henk Pauw.

The Sohar plant has a big advantage in is its access to Alcan’s cutting edge technology, the most reliable and consistent on the market today: it was the first smelter in the world to implement Rio Tinto Alcan’s benchmark AP36 smelting technology.

Alcan is constantly improving the efficiency of its equipment, and any future expansion will look at incorporating the latest AP 40 technology, with its associated benefits of energy saving and emission reduction.

“If ongoing talks with the Ministry of Oil and Gas are positive the company would definitely like to undertake this expansion to triple the capacity of the plant.”

For more information about Sohar Aluminium visit: www.sohar-aluminium.com

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Çolakoglu

Turning the back challenge With conditions in the steel industry continuing to prove challenging, it is Çolakoglu’s ability to adapt to a constantly changing marketplace that has contributed most to its long-term success

written by: Will Daynes research by: Abi Abagun

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Çolakoglu’s meltshop is equipped with one of the world’s largest electric arc furnaces

Çolako lu

B

oasting a proven track record for producing quality products that meet the needs of the market, Turkey is recognised throughout the world as a major player in steel production and exportation. Over the last several decades the country has experienced consistent growth within its steel sector, expanding exponentially to the point where, in 2012, it was ranked as Europe’s second largest crude steel producer and eight in the world ranking of steel-producing countries. Çolako lu’s involvement within the industry began with the establishment of a steel trade business by its founder, Mehmet Rü tü Çolako lu, in Karaköy, Istanbul, in 1945.

“The first Çolako lu rolling mill,” explains Dr Koray Gunay, “was commissioned in Sütlüce in 1960, with the first meltshop going into production in Dilovası nine years later. It wasn’t until 1985 that our operations expanded to include wire rod production, with reinforcing bars being added to our production line in 1990.”

While business during this time remained constant, one thing that also remained was the gap between steel production and consumption levels that continues to exist in Turkey to this day. This resulted in Turkish companies having to export up to 60 percent of their production on long products. On the contrary Turkey imported 70 percent of their flat products requirement.

“Realising that the traditional way of doing business was no longer sustainable,” Gunay continues, “it was in 2005 that we embarked on a new business strategy that would see us bring flat products in to the market.”

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Çolako lu

The finished steel rolls

The company further proved its what you see within our facilities today,” he determination by investing in a new meltshop highlights, “95 percent did not exist as recently and rolling mill for flat products in 2007. At as five years ago. In 2010, as part of our the time of its commissioning, this meltshop commitment to improve our overall productivity, possessed the world’s largest electric arc we undertook a programme designed to furnace. “One thing,” Gunay says, “that has upgrade our processes and infrastructure. This always been true about Çolako lu is that was followed in 2012 with the work we did we have always striven to make continuous to increase the efficiency of our arc furnace. improvements to ourselves when it comes to These projects highlight at first hand how we products and technology. This has helped believe in trying to better ourselves each and us remain one of the real every single day.” pioneering companies in the This improvement has steel industry in Turkey.” allowed Çolako lu to retain This mentality is one of the first-class product the three core characteristics reliability that it feels instils that Gunay believes defines confidence in its customers.

The year that Çolakoglu “In addition to the degree of Çolako lu, together with established its steel trade reliability that our products its product reliability and business possess,” Gunay enthuses, “we flexibility as a business. “Of

1945

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“we have always striven to make continuous improvements when it comes to products and technology” also benefit hugely from being a very flexible operation.” From its facilities, Çolako lu is able to produce almost three million tonnes of liquid steel. This liquid product is then fed into either a billet caster or a slab caster, the former having a capacity of 2.5 million tonnes and the latter 3.5 million tonnes. Having the flexibility to shift between multiple products gives the company the ability to adopt changing market conditions accordingly.

Over the last couple of years these market conditions have been heavily affected by

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the continued over supply of steel into the marketplace, a trend that has driven the price of steel down by as much as 15 percent. “What you have to remember,” Gunay says, “is that no matter what we do, we can’t change how the market is going to react to the fact that today, even the smallest of customers has the ability to see how mills’ prices are fluctuating around the world. This is something that we cannot do anything about; rather we have to able to adapt in order to deal with it.”

The way the company has done this is

Çolako lu

Panoramic view of the entire line

through a combination of knowing the right time to buy and sell materials, by increasing the productivity of its operations, reducing lead times and by focusing more of its efforts on delivering high end products to more specialist customers. “By only focusing on commercial products,” Gunay states, “you leave yourself open to much higher levels of competition. What we are doing is overcoming this competition by producing products suitable to produce LPG tanks, automotive rims, agricultural tools, line pipes and other niche items of machinery and equipment.

This is also providing us with the opportunity to tap into new market segments, like the automotive industry for example, and act as a key supplier of raw materials to producers in these industries.”

In the years ahead, Gunay envisions competition within the company’s domestic markets only becoming more intense as new players enter the field. As he concludes, being aware of this now has allowed Çolako lu to put in place a clear strategy for future growth. “In order to compete at our best we have to continue to make improvements to our process; we have to continue to serve our customers properly and retain our ability to move with changes in the market, while preparing ourselves to become an even more diversified supplier.”

For more information about Çolakoglu visit: www.colakoglu.com.tr

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Mixing knowledge with quality Er-Bakir has come a long way in three decades

written by: Will Daynes research by: Abi Abagun

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Er-Bakir

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B

efore he established Er-Bakir, brought Er-Bakir to the point where today it A. Nuri Erikoglu had already has one of the largest electrolyte copper wire forged his own reputation production facilities in the world. From this through the building of hand- facility the company produces all manner crafted home purpose copper of copper wire based products, from wire products including boilers, braisers and rod to braid wire. Er-Bakir’s copper wire trays. A visionary in many ways, Erikoglu rods are produced in its continuous casting was one of very few individuals to foresee unit and conform to ASTM B 49 and DIN the future potential of copper. With this 17652 standards. The majority of the wire vision and his unique entrepreneurial spirit rod it produces is used as inlet wire in wire he would go on to create Er-Bakir with the drawing units, with the remaining product mission of producing copper wire in electric packaged in accordance to its customer’s cable, a product now used individual requirements. on a mass global scale in all Er-Bakir’s single copper areas of life. plain wires are processed, With Er-Bakir existing as annealed or hard, in specially a small workshop for only designed rod breakdown a couple of years it was in machine groups. They can 1984 that the company then be used as inlet wire Er-Bakir’s annual set out along the road in other units of the wire production capacity drawing plant, sold packaged to transformation when in steel reels or packed in Erikoglu entered into a partnership with close friend and respected cartons or steel baskets. These wires can also be used as inlet wire for tin or nickel plating. industrialist, Cafer Sadik Abalioglu.

In the almost three decades since the Other single wires produced by the company partnership was formed Er-Bakir has are tin and nickel plated copper wires. Wires undergone a period of significant expansion tin plated by electrolytic plating machines are and development. In 1985 the company packaged either in carbon baskets or reels possessed the capacity to produce some 32 before being directly sold to customers, or tonnes of wire rod per month, whereas today placed in steel baskets for use in the wire it boasts annual production of approximately drawing unit of Er-Bakir’s plant. These wires 200,000 tonnes. In 1985 Er-Bakir also are produced with dimensions ranging from commenced with the export of its products one millimetre to 2.60 millimetres and can be with its first deliveries being made to Iraq and tin plated to a wall thickness of 25 microns.

Iran. Fast-forward to 2013 and the company Similarly, wires that are nickel plated is now exporting to 30 technologically are packaged for direct sale or put to advanced countries. use in the company’s wire drawing unit.

Years of continuous investment have These wires come in dimensions ranging

200,000 tonnes

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Er-Bakir

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FREKANS MAKINA In 1997, FREKANS has been established in Denizli aiming to be a leader in cable industry, worldwide company with professional staff expert on cable machinery manufacturing becomes stronger than ever in cable industry Frekans improves process enabling training of staff under team spirit, motivation, implements all services with the qualified staff applying requirements of Quality management system, ERP. Frekans pays great attention for R&D, has been still working on adding new patented products to existing 6 and aims to produce the first machines in our country has been achieved to be the first many times.

New design, Multi- functional Multi Strander 10 can strand Copper and aluminum and armor with steel wire produces with 500 rpm rotation

speed and 60-120 meter per minute line speed up to 1000 mm2.

Products; • Rod Breakdown Line (Progressing) • Extrusion (Insulation-Sheathing) Lines with Maillefer extruders • Stranding and Armoring Lines • Mica taping machines Chairman of Frekans, Mustafa DÜNDAR has been awarded 1st prize for R&D and Innovation Award in the ceremony of KOSGEB. Frekans continues towards the target to take a part in the BEST in machinery manufacturing field in domestic and overseas market with products exceeding expectations day by day. www.frekansmakina.com.tr

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time and then wound onto reels by static or dynamic methods. These products are sold directly in this form or can be used as inlet wire for bunching or bobbin machines.

Bare and tin plated wires manufactured by bobbin wire take-up machines on the other hand are coiled onto four bobbins simultaneously. Bobbins are then packaged in 12 carrier and 16 carrier boxes.

Bare, tin or nickel plated annealed wires processed by single and multi-wire drawing machines are used as inlet wire for bunching machines. These wires are bunched in double twist, single twist, Planet Strander and Rigid Strander machines in cross sections, with areas ranging from 0.05 square millimetres to 360 square millimetres. They also come in various geometrical shapes and in pitches in accordance with the customers’ requests and standards, then wound onto steel or plastic reels before being transported away from the facility.

Er-Bakir’s products are sold across Europe and throughout the Americas. Their products also play a vital role in the operations of a number of Eurasian companies based in countries including Kazakhstan and Israel.

As a way of both supporting its international clients and extending its own

reach the company has sales agents based in all of its core export markets that ensure that it engages its clients on a one-to-one basis and has the ability to identify new opportunities as they arise. The company supplies to a host of major industries including the automotive and electronics sectors, with its products currently being sold to several illustrious organisations including the likes of NASA and Boeing.

“continuous investment have brought Er-Bakir to the point where it today has one of the largest electrolyte copper wire production facilities in the world” 172 | be manufacturing

Er-Bakir

Away from its facilities, Er-Bakir has been involved, and continues to be involved, in several notable social responsibility programmes. One of its greatest accomplishments was the construction of the Er-Bak覺r Science High School in 1999.

Funded by $1.2 million of investment capital the school is today managed by the Ministry for Education and provides education to around 500 students.

More recently, in November 2009, the company brought its waste water treatment plan into operation. The plant itself has a water processing capacity of 40 cubic metres a day, with the treated water free of metal ions and thus presenting no threat to the environment whatsoever.

The plant itself also houses a separate

unit for destructing waste emulsions. Waste emulsions are processed in this unit so that oil is separated from the water. This means that harmful waste is not subsequently released into the environment.

Operations throughout Er-Bakir are all very integrated in nature, allowing the company to make considerable cost savings and also control the quality of its activities. Having helped breed such positive results for its business over the years, there is little chance that the company will feel the need to change its ways anytime soon - and rightfully so.

For more information about Er-Bakir visit: www.erbakir.com.tr

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Opening the doors of opportunity Since first transforming the face of security in the hospitality sector over 30 years ago, VingCard Elsafe continues to innovate and excite, as its recent unveiling of the first invisible door lock demonstrates

written by: Will Daynes research by: James Boyle

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VingCard Elsafe

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T

o say that a company is responsible for revolutionising a specific industry sector is certainly a bold claim to make. Yet it is an utterly true statement to make when it comes to VingCard Elsafe. Since transforming the hospitality industry in 1979 with the introduction of the world’s first recordable lock, the company has continued to lead the market by continuously introducing new innovations.

The world leader in developing locking systems, electronic in-room safes and energy management solutions for the hospitality industry, VingCard Elsafe is dedicated towards providing electronic security solutions to the hospitality industry and facilities where people sleep away from home.

Today, VingCard Elsafe has products, including locks, safes, energy management systems and minibars, installed in more than 42,000 properties worldwide, securing in excess of seven million hotel rooms and providing advanced technology security solutions to hospital providers and their guests in over 166 countries across the globe.

With VingCard recognising the hotel industry’s need for more effective and efficient lock systems, the first mechanical key card operated lock was invented by one Tor Sørnes of Moss, Norway, in 1976, which was subsequently sold to the Westin Peachtree Plaza, Atlanta, USA in 1979. In the years to follow, VingCard continued to develop key card operated locks, introducing the game changing VingCard 3000 electronic lock in 1992.

Around the same time that Sørnes was

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VISIONLINE RFID lock

VingCard Elsafe

making his breakthrough, Elsafe was making waves of its own with the invention of the first electronic in-room safe in 1976, a development that would make metal key safe obsolete while reducing maintenance costs, streamlining front desk operations and providing convenience and security for users.

In 1980, the seven first safe installations took place in the Canary Islands, followed by expansion to all continents.

It was in 1997, three years after both entities became a part of ASSA ABLOY, the world’s largest independent lock company, that VingCard and Elsafe International joined sales and marketing forces and became the largest solution provider of guestroom security. In the following years, VingCard and Elsafe continued to develop electronic locking solutions and in-room safes side by side, while expanding their sales network around the world, before merging completely in 2006.

It was in this year that VingCard again set about changing the landscape of the hospitality market with the introduction of its VISIONLINE product. Unlike traditional off-line standalone locks, VISIONLINE by VingCard uses RF-online communication to eliminate the need for hotel staff to travel to and from guestrooms to perform tasks such as reprogramming individual locks and

identifying or changing low batteries. It also eliminates the need for guests to return to the front desk in order to change a room or extend a stay, increasing guest convenience and satisfaction.

Less than seven years on, the VISIONLINE system has become the world leader in wireless online electronic locks for hotels, offering a cost-effective solution for hotel

“The VISIONLINE system has become the world leader in wireless online electronic locks for hotels” 178 | be manufacturing

VingCard Elsafe

Most popular safe model - SENTINEL II

properties to facilitate By making the lock reliable, two-way wireless disappear from the hotel online communication from door, the use of Essence by standalone electronic door VingCard not only resolves locks to their host security any design challenges that The year the first and PMS systems. hoteliers may encounter, recordable lock was In June 2012, the next it also minimises a host introduced chapter in VingCard Elsafe’s of ot her operat iona l history was written when the issues, including company unveiled its Essence integration, installation

by VingCard solution, the world’s first invisible and maintenance. By hiding the locking door lock. By eliminating all lock hardware components from the user, hotel designers on the door and encasing all of its electronic are now able to align guestroom doors with components inside the door itself, Essence the current trend toward a more residential

by VingCard integrates the company’s most look, while still proving the ultimate in advanced contactless locking solutions into security technology. Essence by VingCard the interior electronics. is also fully compatible with the wireless

1979

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Signature RFID using Near Field Communication (NFC) on a mobile phone

VingCard Elsafe VISIONLINE system, making it arguably the most advanced, streamlined locking system available on the market.

In the same month that the company broke the news of its latest hotel locking innovation, VingCard Elsafe successfully presented the solution to the industry at the HITEC 2012 technology show. Immediate feedback that the company received for Essence by VingCard in the aftermath of its official unveiling was nothing short of positive and extremely encouraging, serving to confirm its projections of where hotel locking technology is heading in the decades to come. Indeed, markets across the world are continuing to embrace the trend towards minimalism in design as well as embracing the types of Radio Frequency Identification (RFID) and Near Field Communication (NFC) technology that have been incorporated into this new locking platform.

It is a well-known fact within the hospitality sector that in today’s world, people from all walks of life seek security, safety and peace of mind when sleeping away from home. By strengthening its long-term relationships with its customers by delivering superior local service standards and innovative, technologically advanced solutions, VingCard Elsafe continues to follow its own mission statement, and that is to remain the world’s leading choice for the hospitality industry when security counts.

For more information about VingCard Elsafe visit: www.vingcardelsafe.com

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SMTC

The perfect manufacturing partner President and co-chief executive officer, Claude Germain, and executive vice president and chief operating officer, Paul Blom, discuss how the company has successfully evolved into the business that it is today

written by: Will Daynes research by: Candice Nice

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SMTC PCB Test

SMTC

T

oday a global Tier II Electronics grow its top line significantly more than Manufacturing Services (EMS) the industry average as a result of its focus provider, delivering integrated on business development and account cont r ac t ma nu f ac t u r i ng management. “While we are not of the services to original equipment view that we can reinvent the economics manufacturers within the industrial, of being a Tier II EMS player,” Germain computing and communication market continues, “what we do know for sure is segments, SMTC has come a long way in its that we can always do a better job when it comes to driving our top line. Thanks to our 25-plus year history.

After going through a phase of adoption of various strategic initiatives we consolidation during the 1990s, the market have been able to grow our top line in the crash of 2001 resulted in the company, last year by as much as 36 percent. It was headquartered in Ontario, Canada, having this achievement that saw SMTC presented to deleverage its assets in fairly rapid order. with the Frost & Sullivan award for being This led to a near ten year the fastest growing global period where the company EMS player in 2012.” focused itself on retaining a Where the company has solid balance sheet. garnered similar praise over “By 2011, the process the years is in its use of world class IT systems and tools to of deleveraging was Top line growth SMTC largely complete,” explains support the core processes has achieved over the president and co-chief related to engineering, supply last year chain and manufacturing, executive officer, Claude Germain, “so we embarked providing customers with upon a more balanced strategy that focused significant added value. on growing our operating cash flow, and “The IT systems we utilise,” states executive increasing the investment in our business. vice president of operations, Paul Blom, “are Since 2011, and by reducing our costs and absolutely key to our success, and to the increasing our top line, we have generated services that we bring to our customers. additional cash. We have invested this into We leverage Agile and Valor to support working capital to support our top line engineering and new product introduction growth, into upgrading and modernizing activities. Agile is also key to the management our equipment, into engineering and of several hundred thousand part numbers design, and into mergers and acquisitions.” and a high volume of customer engineering Business conditions in the electronics changes per year. Meanwhile, on the market have a tendency to oscillate from procurement and quoting side, Quotewin by year to year. Though 2012 was not a stellar PolyDyne is used to support a global quoting year for the industry, SMTC was able to and commodity management process. And

36%

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As the leading provider of strategic sourcing and quote management software, PolyDyne solutions streamline processes in product costing, commodity management, contract negotiations and outsourcing decisions.

Email us at: info@polydyne.com 512-343-9100 www.polydyne.com

Seen

Contact us today and put your company in the spotlight!

vincent@bus-ex.com

SMTC finally, Kinaxis is used to Exact MAX execute planning, demand With decades of experience serving entrepreneurs, Exact simulation and production understands the issues that manufacturing companies face planning activities.” when running their business. Exact MAX helps growing These platforms have manufacturers control their resources with an easy-to-use been tailored to perfectly solution that reduces the cost of manufacturing, automates complement one another manufacturing compliance, and improves profitability all while enhancing customer service and satisfaction. and remain constantly Through seamless integration with Microsoft Dynamics GP and updated so as to provide Intuit QuickBooks, MAX offers the power of integrated ERP SMTC with the most up-toand boasts a particularly strong footprint with manufacturers date data available when it that must maintain compliance with government or industry comes to customer forecasts, regulations, manage recalls and control and document product bills and materials and revisions and engineering changes. engineering changes. By max.exactamerica.com updating the said platforms on a continuous basis the company is able to ensure that it is always procuring and quoting parts at the most accurate of levels, while also doing a rapid job of introducing new products.

“Increasing SMTC’s contribution to each of our customer relationships,” Blom highlights, “is our value engineering team.

Working closely with our customers, leveraging the skills of our strong internal team, and involving external partners, we identify appropriate opportunities to achieve cost and lead time reductions. The SMTC value engineering team focuses on design-for-manufacturing, design-for-supply SMTC engineering

“SMTC was presented with the Frost & Sullivan award for being the fastest growing global EMS player in 2012” be manufacturing | 187

“I see SMTC continuing to evolve the ways in which we deliver services to our customers, and investing further in both IT systems and employee skills” chain and the leveraging of SMTC’s global procurement capabilities.”

Another example of the way SMTC strives to work with customers every step of the way, is its ability to undertake what it calls AVL expansion projects. It is during these that

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the company goes back to its customers and presents recommendations on who to add to the approved vendor list on the bill of materials to drive cost and lead time reductions, and product life cycle optimization.

“During these AVL projects,” Blom says,

SMTC

SMTC manufacturing plant

“we focus on several key areas, the first is driving cost reduction by leveraging our preferred suppliers. The next is a focus on risk reduction and improved continuity of supply, particularly during periods of material shortages – here we look to increase the number of options available for global sourcing of components and assemblies.”

Looking forward, Blom points out that SMTC’s customers will continue to experience various competitive pressures within their markets, thus they will continue to turn to SMTC to provide proven value engineering and supply chain solutions. “I see SMTC as

a business continuing to evolve the ways in which we deliver services to our customers, while at the same time investing further in both IT systems and employee skills. Each customer has different needs, evolving over time. It is key that we proactively anticipate these requirements, bringing the right solutions to our customers at the right time, in order to address these needs.”

For more information about SMTC visit: www.smtc.com

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Grafton Everest

RELAX WITH

DIAMONDS South Africa’s leading manufacturer of lounge suites Grafton Everest innovates to grow and is currently planning to capture the increasing demand for fine furniture in the vibrant economies in other parts of the continent

written by: John O’Hanlon research by: David Brogen

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Grafton Everest

D

urban based Grafton Everest was formed in 1953 when two South African furniture brands – Grafton Art Furnishers and Everest Upholsterers merged. That means that Grafton Everest is celebrating its diamond jubilee this year, and it is definitely not failing to make the most of its opportunity.

There is a lot to celebrate. Make no mistake, the market for luxury furniture has been in decline lately, not just in South Africa but world wide. “It has been tough, and it is getting tougher,” says Marketing Executive Jeff Fivelman. “We have a lot of competition from China, and our consumers are as much affected by the global recession as anywhere else in the world.” But Grafton Everest has countered the negative trends by stepping up its core qualities of design and quality manufacture, together with its understanding of the needs of its customer base, to maintain sales volumes and keep its 600-strong workforce busy.

Grafton Everest belongs to the Bravo Group, South Africa’s largest bedding and furniture manufacturer and supplier with eight factories and household names like Slumberland, Sealy, the distribution company Global Sourcing and fellow furniture brands Alpine Lounge and Gommagomma. However Grafton Everest is probably the best known of all the sofa or lounge suite brands in the country, says Fivelman. Having recently restructured its retail showroom in Durban, this jubilee year is a good time to be drawing attention to the products.

The way is being prepared with an event

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TEXSTYLES Douglas Bornman first entered the fabric business in 1985 when he joined a textile weaving company in Johannesburg, a company whose aim was to be the office/ contract furnishing specifier of choice.

The people Douglas worked with were office/ contract manufacturers, as well as the design teams at corporate companies such as the banking groups, mining houses and cinema groups. During his time with the company it was successful in assisting in developing the corporate images of companies such as Standard Bank, the ABSA Banking Group and many others.

In 1998 Douglas joined Court Fabrics, which specialised in the weaving and supply of domestic and home furnishing fabrics, as well as fabrics for the automotive manufacturers

in South Africa.

In 2005 he joined forces with Raffles Agencies, which were manufacturer’s representatives, and became an agent, sourcing fabrics from Europe and China and Genuine Leather from local South African Tanneries, for his customers.

Two years ago, Douglas’ partner Peter decided to retire from the textile business and “TEXSTYLES IMPORT & EXPORT” was born.

Over the intervening years Douglas and his company have travelled extensively to European as well as Chinese Trade fairs to source the latest ranges for our markets in Southern Africa, appearing at Chinese fairs and textile factories twice a year.

E. douglasb@iafrica.com

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Hanni fine quality leathers since 1724 We at Hannitan are proud to be associated with Grafton and would like to congratulate them on reaching their 60th Anniversary

Hannitan Leather, under the management of Rudolf Hanni, has been hailed by many as

one of the cleanest and efficient tanneries in the world. Starting from very humble beginnings Hannitan has expanded into the largest supplier of furniture leather in South Africa, producing an average of 1,200 hides daily. The tannery produces a wide variety of upholstery leathers including, aniline leathers, semi-aniline, full grain, corrected grain, buffed leathers and oil pull-ups in a huge selection of colours. Hannitan manufactures a HANNI range of leather goods including travel bags, hand bags, leather cushions, leather folders and slippers to various outlets . It also offers a customized service manufacturing for various other well known labels and brands. All products are individually cut by hand to ensure the finest quality and craftsmanship.Hannitan supplies its own range of leather care products including waxes, silicones and hydrophobic products.

Tel: +27 (0)11 817 2150 | Fax: +27 (0)11 817 5259 | Email: hannitan@iafrica.com

www.hannitanleather.com

Grafton Everest

Machinist at work

appropriate for a company celebrating TV – everywhere that will reach the loyal its 60th birthday in a country built on Grafton Everest customer base in fact. its diamond mines. “We are giving away If that doesn’t catch their attention maybe diamond jewellery to the tune of about nothing will, but there are plenty of other 160,000 Rand, or nearly $20,000, to advertising initiatives going on to make sure customers. Anyone purchasing one of the company’s market share doesn’t slip in these difficult times. “We our lounge suites will are finding that the best be entered into a draw way to stimulate sales is to win some fantastic with promotion and more diamond jewellery.” It’s a advertising: it costs money supercampaign, publicised but it’s worth it.” But these across the retail trade, in Value of 2013 diamond customers are discerning. women’s and household promotion The promotions have to be magazines as well as on

$20,000

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Care is taken when cutting the materials

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backed up with innovation, so at a time when some brands are retrenching Grafton Everest customers will notice a lot of exciting new product designs, fresh colours and fabrics, and value added through technology. “We are very much in a fashion industry,” he admits.

In better market conditions manufacturers can perhaps be satisfied with static ranges but when times are hard the winners will be the ones who can really catch the eye of the consumer.

Grafton Everest’s export market died about ten years ago when the Rand became a stronger international currency. In recent years the challenge has come from the east.

Gone are the days when Chinese furniture was either entry-level or, frankly, poor quality. But recently the Rand has weakened against the dollar, bringing down the gap between home made and imported furniture.

Customers are again willing to pay a little more to access the satisfaction of owning a South African product backed by strong and dependable warranties.

And the younger, upwardly mobile customers whose lives are ‘connected’ can find Grafton Everest on Twitter or Facebook.

“Social Media are on the up here,” he says.

“And as well as in the magazines, we are doing regular advertising on TV and radio.”

TV being an expensive medium, Grafton Everest ads tend to be short, frequent, shortterm campaigns put out in off-peak time.

Radio is a new departure. A 30-second plug highlight’s Grafton Everest’s recent move from its former premises in central Durban to a new 1,200 square metre showroom in Umhlanga, a pleasant beachside suburb only 15 minutes

Grafton Everest

Work begins on upholstering the suite

away by car but a lot more accessible and with much better car parking. Here customers can browse 40 different lounge settings with trained consultants to hand, something they could never do at a dealership, so the dealers send their customers to Umhlanga to make their choice before placing an order. It so happens that the building is shared with East Coast Radio, ‘Durban’s No 1’ so Fivelman and

his team decided this would be a great way to tell people the move had happened.

The growth of the middle class in South Africa has been exponential. Trusted brands have benefited accordingly – BMW or Audi for the car, and Grafton Everest for the furniture!

The older traditional designs incorporating ‘show wood’ are still popular among older buyers but more and more people want

“In the diamond jubilee year we are also putting a lot of effort into the special promotions we have planned through to the end of July” be manufacturing | 199

Grafton Everest

The Grafton Everest factory floor

contemporary sofas with a the way by using leather on sleek European look to them. the seats and backs and using Another trend is that matching matching PVC on the low suites are becoming slightly wear areas: it is just another less sought after as customers way to make leather furniture Area of new Umhlanga opt for individual pieces and more affordable, he says. showroom express their individual taste At the same time, Fivelman with a mix of styles. would like Grafton Everest to To support that they need a good range pioneer a resurgence in the use of fabrics, of coverings. Leather, he says, is extremely bringing in more vibrant colours like turquoise popular, accounting for 60 percent of today’s and red. He keeps a close watch on what is sales whereas it five years ago that would done in the UK, Europe and the USA and is have been 40 percent. “Again, leather is an a little weary of the drab monochromes that aspirational choice, and its cost has come are so common. It is time to brighten up the down with the introduction of ‘leather whole scene he says. uppers’. The up-market car industry has led The biggest growth market in recent years

1,200 M2

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Constructing a motion furniture frame

“Two years ago motion furniture accounted for less than ten percent of our business: now it accounts for more than 30 percent” has been in so called ‘motion furniture’, which when you think about it has revolutionised the business. More and more people want lounge furniture that will adopt different positions, recline, and give leg support as they watch TV. “Two years ago motion furniture accounted for less than ten percent of our business: now it accounts for more than 30 percent, and it is still rising.” Individual chairs and entire suites are now designed with reclining actions – you

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could have five separate actions in a single three-piece suite.

That has big implications for manufacturing.

Making furniture use to call for joinery and upholstery skills: now it needs mechanical and electronic know how to assemble and fit the mechanisms and controls. “It takes a lot longer in the production facility to assemble a suite with recliners – twice as long,” he says.”

That comes at a cost, as more labour has to

Grafton Everest

CAD drawing of a corner suite

be brought in to keep throughput up.

The Grafton Everest factory moved to an area of Umhlanga called Canelands as long ago as 1986. It now covers 24,000 square metres – it is not expanding at present but the company is proud to have been able to keep it going through the hard times without layoffs or short time working. Over the last three years it has invested in automation including CNC laser leather cutting machinery and even automated fabric cutters to minimise waste. “We have brought in technology where it is appropriate because we sell time,” says Jeff Fivelman.

Any spare capacity at Canelands could be mopped up if the company’s plans to expand into new African markets are successful. It already sells well in neighbouring countries, particularly Namibia and Botswana, where

Finishing a leather suite

employment levels are high. Zambia and Zimbabwe are important markets too as is Angola where the Bravo Group has formed a joint venture with a local partner to capture the demand created by that country’s new oil wealth and its large expatriate population.

He would love the chance to sell Grafton Everest furniture in the growing economies of east and central Africa too and is just looking for the right partner – a like-minded, go-ahead local business that understands the quality furniture trade and the fundamentals of distribution and import.

For more information about Grafton Everest visit: www.graftoneverest.co.za

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