MRP System For Canyon Europe Ltd

Canyon Europe Ltd is the European arm of it’s Japanese parent company. Based in County Antrim, Northern Ireland, the company employs 125 staff and manufactures injection moulded products. In 2003 their sales, production and stock control were managed through a series of separate spreadsheets. Information was not visible between departments and errors were commonplace. Graeme Bennett, Operations Manager said; “Up to that point we had no ISO accreditation and were making two different product families - triggers and pumps. Planning was done through a magnetic board. We had customers telling us that we needed an MRP system, plus we needed better internal methods for our planned ISO accreditation. We looked at several systems, costing between £50-70k, and typical annual maintenance cost of 15-20%. We were going through a significant change, and capital was limited - we wanted to apply it to developing new products, not on manufacturing systems, so the price was a big barrier to entry for us.”

Joanne Paffey, Planner added; “When I joined the company in 2003 the first thing I noticed was that there was stock everywhere. There was too much of one thing and not enough of another. Staff were coming in at the weekend just to count stock. Planning was done on a daily basis, and we used to issue hand-written works orders to the shop floor. The supervisor then had to write in what was made at the end of the shift, and this often led to calculation errors. Having inaccuracies in stock also caused a lot of machine downtime, as we had to clean the machine out each time we made a colour change, which also resulted in more waste.” Graeme also said; “Instead of getting good, efficient runs we ended up with small pocketed runs of various colours to try to fulfill orders. One of the products we make has 12 components and there can be a lot of colour variants - 25 greens, for example. So for each of those components there are potentially 25 different stockable units against that part. Previously we had an A4 folder which had a sheet per component number with manually logged information on what was booked in and out. It wasn’t effective, and was costing hundreds of kilos of material on a monthly basis, but it was the time wasted that was most significant. Machines were regularly waiting for 3-4 hours while other processes were completed.”

The selection process

The company was involved with a number of improvement programmes and one consultant put Graeme in touch with 123insight, who provided a multimedia DVD. After watching some of the product demonstration videos and holding a short meeting with 123insight’s representation in Northern Ireland, QM Systems, Canyon Europe booked to attend the no obligation training. Two staff attended training courses in October 2003. A new server was installed in February 2004, with Graeme then starting the installation process himself and within two months the system was live across all departments. Of the training Joanne said; “The training was very good, and easy to follow. There were lots of exercises to do so that you understood how the system worked, and you could ask questions freely. I was concerned whether the staff on the shop floor would be able to work with the system and find it easy to use, but they were fine.”

Going live

Immediately the fog surrounding information held in each department disappeared. Communication improved dramatically as there was now a single repository of information accessible by all departments. Errors associated with the traditional workflow process disappeared overnight. Graeme recalled; “Previously the sales spreadsheet, known internally as ‘the bible’, detailed new orders and was used as a template for the day’s manufacturing. Multiple copies were printed and distributed to key staff throughout the factory in the morning, but of course it was out of date by lunchtime. Now we can all use the system to see live information.”

Stock control used to cause major problems, with physical stock checks commonplace as records could not be relied on. Rolling stock-takes of a few items are now done, which confirms what the system is reporting is what is actually on the shelves. As a direct result stock-holding of work in progress components has been reduced by 30%, which in real terms is about £28,000 per month. Noted Graeme; “Booking in and out was a manual process, and inaccuracies were colossal. By having accuracy in the orders being booked in against the works order we were able to get a live view of the situation, and that allowed us to reduce down the stockholding that we had. Through the implementation of 123insight we were able to eliminate overruns. This was a safety factor we had built into our old system to ensure we always had enough components, but because of the accuracy of 123insight we were able to reduce that, all of which culminated in a 30% reduction in stock.” Joanne added; “We have a location in 123insight called ‘overruns’. Initially this started with something like 300,000 finished sprayers in there. Now we have about three boxes.” Added Graeme; “It speaks for itself...”

Since implementation in 2004 Canyon Europe has operated a First In First out (FIFO) policy with stock. Previously stock was not allocated to any location, but now each batch can be allocated to a specific location and shelf. With 123insight’s batch traceability staff can quickly locate the oldest items for use.

Further benefits

A number of further significant savings became apparent. The amount of paperwork generated and tracked was massively reduced. The necessity for printing reports and forms, many previously in triplicate was removed as users could access the information electronically. Also, documents that previously were printed such as order and sales acknowledgements could now be sent by fax or email direct from the PC. Traceability which was always a concern before was now built into the system. Said Graeme; “Our customers were telling us 'if you have a problem you need to be able to trace it back through the batches’, and up to that point we couldn't. We were booking everything through paper which was very difficult to trace. Now we can go back and see on a given date that we made X component in batch Y and produce certificates of conformance. It's not often that we need it, but it is those times that we need it that it becomes invaluable to the customer and it gives them the confidence that we are in control of our system.”

Shop floor integration

As part of its continual improvement process, Canyon Europe reviewed its business strategy in early 2010. Their shopfloor already utilised a Data Acquisition System (DAS) which captured the  count of parts manufactured, waste streams and any machine downtime.  However, this was a standalone system and data was being fed manually between DAS and 123insight, so the company decided to create a link between the two systems. They talked to a local development company who, after a 30 minute tour of the facility and no real exposure to either system quoted £35,000 to write an interface between the two.

Graeme had concerns; “Internally we were very nervous because we were aware of the importance of the link working with ongoing revisions of either system, so we talked to 123insight  to discuss the opportunities. It became clear that they could help using their Software Development Kit (SDK) so we had a further development meeting in Southampton in May. At that time we agreed to go live in November that year. 123insight, working in conjunction with the DAS software company (Bramble Systems Ltd) and our internal Production Engineer, John Boyd, actually delivered a month early in October. The bigger benefit to us is that the SDK is maintained by 123insight with every release so that it just continually works.”

The benefits of the integration were immediate. Paperwork was further reduced and a common interface was employed across the shop floor. Operators use a combination of barcode scanners and touch screens to identify themselves and to start work on a works order, the information for which is drawn from 123insight. Specifications and images for the job can be viewed on screen before the operator starts. The DAS passes relevant information back to 123insight once the operator scans the job as complete, and a label is then produced for the packaging which details everything about the job. Live shop floor information is also relayed over large overhead LCD screens.

Waste reduction

Planning delivered major savings in both reducing waste and saving machine time. As machines were no longer often producing short runs waste dropped considerably from around 4-5% to 0.1%. Graeme noted; “The machines can only run while the components are available, and that’s why 123insight is so instrumental to us. It is making sure that the machine components are available line side, in full and on time.

The company’s ability to quote accurate leadtimes has continued to improve. Graeme cited that previously confidence in quoting delivery dates was low; “We always used to build in a safety factor when quoting leadtimes, but now we know what we have in stock and our planning is much more fluid, so anybody can view the schedule. Previously the only person that knew what was being made was the planner.”

Support

Support and ongoing development has been excellent, with Joanne noting that calls are always dealt with quickly and there is a willingness to drive the product forward through customer suggestions; “If we call up and they can’t help there and then we usually have an answer within 24 hours. Moving forward I was a little nervous at first that we would be forced to work the way of the system rather than the system working for us, but we've noticed over the years that 123 Insight work closely with their customers - if a company comes up with an idea it’s often included in the schedule for development, which I think is excellent. We’ve seen a number of improvements since initially taking on the system. The introduction of SDK was important, as we wouldn't have the link to DAS without it. There’s also been many other changes that we’ve suggested that have been added to the system, such as improvements to back flushing.” Graeme added; “We're running the current version, and every time we've done an upgrade there's been a benefit to us. The latest example is the electronic approval of purchase orders. As soon as I log in the system advises me of any purchase orders awaiting approval, which I can then sign off electronically. That's why we've been keen to do the update. We know that with many traditional systems people have said to us they are still running old versions because they prefer the way it works over newer versions.”

Although Canyon Europe has taken considerable market share from 2004-2011 the number of indirect staff has largely remained the same. Said Graeme; “Last year we produced more than double the volume of 2004. That has been done really without any significant increase in staff numbers, with the number of office staff pretty much identical to when the system originally went live in 2004.”

Graeme concluded; “If we reflect back to 2003, we were looking at spending £60k+ plus around 18% of that per year. We were going to have to pay all of that up front, never mind having to train people.123insight offered a no-risk alternative. There were no up-front costs, the training costs were negligible and if after the first month it didn’t work out we could have withdrawn without any penalty. Even today we are not  paying anywhere near the 18% or so we’d be paying for maintenance alone of another system, and we are probably getting more benefit because of 123insight’s flexibility.”