23 April 2010

Hutchinson Engineering Case Study

‘As a direct result of the solution delivered by Acorn IT Solutions, we can directly attribute a saving of 25 man days per month. In addition to this we have realised savings on raw materials, energy and reduced waste’. Mark Hutchinson (MD) SJC Hutchinson Engineering Ltd.

Business Challenge:
Established in the late 1970's, SJC Hutchinson Engineering Ltd (Hutchinson’s) provided a fabrication service to the local agricultural community as well as the industrial sub-contract market in all sectors of industry throughout Ireland and the UK. Substantial investment has been made in 'state of the art' Laser cutting, folding and fabrication machinery as well as 3d modelling packages.

Hutchinson’s understood that to compete in an increasingly competitive industry they needed to drive efficiency in their manufacturing process and better manage production costs. Prior to engagement with Acorn, their production process was primarily manual with jobs issued on a job handwritten sheet, with no product traceability and high administration.

The issues that Hutchinson’s manufacturing process faced included some of the following items:

  1. Inability to accurately cost the manufactured product. Hutchinson’s were unable to capture the exact time or material cost of each manufacturing process.
  2. No traceability of products on the shop floor. The manufactured products on shop floor were unlabeled with no associated documentation.
  3. Over stocking. Due to lack of visibility of the manufacturing process, excess stock was carried un-necessarily, with other items under stocked. This has a knock on effect on the delivery of orders.
  4. Poor stock management with sheets being filled out with stock rather than products on order.
  5. No stock control. This resulted in components for different orders being used to fulfil and dispatch an order at the cost of other order fulfilments.
  6. No auditing of product through manufacturing process. When a customer requested an update on their delivery status, management had to physically go onto the shop floor to check stock.
  7. No revision control. If a customer issued a revision on their parts, Hutchinson’s had difficulty ensuring that the correct version was in fabrication.
  8. High administrative costs with double entry of sales orders and manufacturing information.
  9. High volume of waste due to raw material not being fully utilised.

After an initial consultation period to understanding the manufacturing and business process, Acorn developed and implemented their Manufacturing Process Management (MPM) solution to address the above issues.

Post implementation, Hutchinson Engineering realised tangible efficiency improvements in their manufacturing process.

The main benefits Hutchinson’s achieved are as follows:

  1. Manufacturing the right items faster. MPM gives programmers full visibility of all products to be manufactured. Manufacturing can be prioritised to ensure the correct items are produced with the correct versions to fulfil open orders.
  2. Material management. MPM shows buyers the total raw material required to satisfy all products being manufactured. This allows the buyer to ensure that manufacturing has sufficient material to fulfil these orders in stock.
  3. Real time stock. With true stock control and real time stock management a scheduler knows the product to manufacture based on true requirement.
  4. Stock Management. Purchasing understand the level of stock required to fulfil work in progress.
  5. Nesting the sheets: MPM allow the programmers to nest their product appropriately in a sheet and maximize the amount of the sheet used. With MPM they can see what other products are required for manufacture from the same raw material.
  6. Traceability: MPM creates a label for all component parts detailing description and revision number. This means all products on the shop floor are easily identified.
  7. Waste Reduction: MPM provides programmers with a top level view of the total manufacturing requirements. This has helped reduce raw material waste by making more efficient use of the space available on the raw material
  8. MPM integrates directly with Sage 200. This has eliminated double entry on stock, Bill Of materials, customer sales orders, work sheets etc.
  9. The Bill of material module was implemented allowing Hutchinson’s to use functions such as BOM explode and BOM where used. It also allowed Hutchinson’s to easily manufacture all of the products within a BOM and assemble the finished product for dispatch.
  10. MPM provides accurate product delivery dates.

The solution used Sage 200 Financial and Commercials as the foundation product. MPM fully integrated into Sage 200 providing a single business tool to manage Accounts, Stock and manufacturing.

The solution was implemented in 3 stages.

Stage 1
Initially Hutchinson’s accounts system was upgraded from Sage 100 to the latest version of Sage 200. This enabled Hutchinson’s to use all the modules necessary for their business, including Stock, Purchase Order Processing, Sales Order Processing, Invoicing and Bill of Materials

Stage 2
The implementation of an order import routine that allowed the orders from Hutchinson’s main customers to be imported directly into Sage 200. In-turn these orders were then available for manufacture via MPM. This vastly reduced administration and the rekeying of orders.

Stage 3
Manufacturing Process Management (MPM) was introduced, replacing their former manufacturing system. This provided all of the benefits listed above.

‘Since installing the MPM system, we have seen many benefits to our internal processes. Acorn have worked to an initial brief, we have found their response excellent and would highly recommend them’. Mark Hutchinson (MD) SJC Hutchinson Engineering Ltd.

‘Acorn are delighted that by successfully implementing our MPM solution, Hutchinson Engineering have been able to gain better control of costs, improve their workflow management and realise a return on their investment’. Declan Bradley (Director) Acorn IT Solutions Ltd.

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