Manufacturing Executive - January/February 2009 - (Page 16) the label, and the design entirely online. They submit their order and it feeds directly into our operational ERP system and triggers the event to get everything lined up to support speeD to marKet anD cost reDuction Drive that customer. We have taken out the manual europe’s agile strategies intervention from the whole process so manuQ: What’s driving the need for business agility? facturing now has complete visibility into the customer order. We put that order through our 64.2% 23.2% Competition moves faster 12.5% advanced planning and optimisation process Reducing time to market 12.4% 39.7% 47.9% to take a look at what we have in inventory, predict demand from that customer, the Cost reduction 6.6% 47.1% 46.3% supplies we have, and then pull together a Changing market requirements 6.6% 57.8% 35.5% preferred production schedule.” Rexam also has a vendor-managed invenLow = Medium = High = tory system in place to cut costs on one of its biggest items of spend — aluminium. Its of respondents saying they will implement new agility plans suppliers can see Rexam’s on-site stocks online and replenthis year and a further third in 2010. ish as orders come through, so Rexam pays only for what it “Agility is more important than ever in times of economic uses. That has reduced the company’s raw material inventurmoil,” says Nigel Montgomery, a research director at AMR tory by 50%. Research based in Oxford, United Kingdom. Driven by Demand “When everybody is flush with funds, there’s lots of business opportunity to go round. You can even turn some At a corporate management level, the survey results reveal business away. But when times are hard, every single bit of a stronger emphasis than ever on the need to find more efbusiness is essential. You have to be agile enough to make ficient and flexible ways to understand and respond to demand sure you can meet new customer requirements, win the deal, changes and then rapidly design new products to meet those deliver quickly and efficiently, and, most importantly, make new demands. money on it,” he says. “Fifteen years ago, for one car model there was only one Harnessing technology is critical to an agile strategy, type of headlight,” recalls Andreas Brenke, director of indusDaimler’s Flegel says. “Nobody knows how long this crisis trial engineering methods at German auto parts maker Hella will take. We have to install new intelligent technologies so in Lippstadt, Germany. “Today, 100 different headlights are we can make things cheaper, make our factories more flexible common, which has an immense influence on development and agile, and use new processes to make things faster.” and production. The overall trend is moving away from mass production towards customer- specific production.” Cutting Business Costs And the pressure for fast response to customised demand is The search for greater cost reductions and faster speed to getting more intense as new consumer technologies take hold. market is driving much of the agility activity in Europe in “One of the biggest risks is Web 2.0,” AMR’s Montgom2009. Survey results from Europe’s manufacturing technology ery says. “These instant, social-based interactions mean that leaders show almost half the executives rank these key factors people are communicating around brands faster, so the rise as high priorities for the year ahead. and fall of a product is more rapid. The opportunity to jump “We are beginning to focus more on just-in-time manufacon a wave of interest can disappear very quickly. If you don’t turing to be more agile and to be as efficient as we can at keeping costs down,” says Paul Martin, group director of information management at London-based Rexam Group. DemanD Drivers are Key agility Focus For Rexam makes 55 billion aluminium cans a management year at 110 manufacturing plants around the Q: What degree of emphasis is management placing on the following activities world for global brands such as Coca Cola. in relation to becoming more agile? It also has a fast-growing plastics packaging business serving the health and beauty sector. Ability to understand and The company’s long-term strategy is to cut 50.9% 42.2% respond to demand signals 6.9% costs by £35 million to £40 million every year. Ability to design products 13.6% 52.2% 34.2% So far, Rexam is on track. “When you are making 2,500 cans per minManaging the supply chain 6.9% 29.9% 63.3% ute, there’s not a lot of time to slow down and Allocating labor 7.7% 18.8% 73.5% stop to do a new business process, so we want our manufacturing systems be as flexible and Production, assembly 12% 28.2% 59.8% responsive as possible,” Martin says. Logistics, fulfillment 7.8% 32.2% 60% “Say one of our customers wants a new can. We have an electronic process in place Low = Medium = High = that lets them choose the type of can, the size, me poll agility me poll agility 16 Manufacturing Executive JAN/FEB-09
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