LSI Case Study
Opcenter (Preactor) APS
Opcenter APS (Preactor) integrated with MES get seal of approval from Hoerbiger
HOERBIGER is active throughout the world as a leading player in the fields of compression technology, drive technology and hydraulics. Founded in Germany with offices worldwide, the HOERBIGER brand is synonymous with components and services providing high customer value in compressors and industrial engines, automobile drivetrains, and multifaceted mechanical engineering applications. HOERBIGER industrial safety and explosion mitigation solutions save lives and protect equipment. HOERBIGER branched into North America in the 1960s and now has production manufacturing centers in Houston and Garland, Texas, Pompano Beach, Florida, and Girard, Ohio.
Hoerbiger has a commitment to deliver cutting edge solutions and maintain its on-time promise to their customers. To accomplish this goal, Hoerbiger needed to upgrade its planning and scheduling capabilities to provide more visibility into their production scheduling.
Paul Mittendorff, Hoerbiger’s Director of Manufacturing Systems outlines why accurate planning and scheduling is so critical to the company.
“In school 92% success is considered grade ‘A’. In our business 99% is considered a Fail. It is simply impossible for any one person to keep track of this many products, with these many parts, requiring these many operations. It only takes one part not ready on time to result in a customer’s complete order shipping late. Success therefore requires complete visibility of not just what order is where, but whether each order including all of its sub components is on schedule or not.”
The Hoerbiger plant at Pompano Beach manufactures precision metal valves and plastic sealing components used in compression systems primarily for the oil and gas industry where the company has a very impressive 80% of market share. Approximately 75% of its output comprises fully assembled OEM items supplied direct to customers with the remaining 25% being replacement parts supplied direct or via the company’s service centers. In terms of scale, the plant processes thousands of tons of metal each month to manufacture products ranging from 1 inch to 1.5 meters in diameter.
At any one time, there is on average 1000 live works orders on the shop, each having up to 10 components requiring 10 operations, all of which can take a varying amount of time to complete depending on material, size and finishing, etc.
The company’s approach is all individual components which can be sold separately or used in complete products are Made to Stock while all complete, fully assembled products are Made to Order (MTO) with 75% of orders being fully assembled products.
The nature of Hoerbiger’s business adds further levels of complication to this. To start, the company has a potential product range of 228,000 items which dates back decades and is reliant on old hand drawn specifications. While 80% of production typically covers only 40,000 different products, the remaining 20% covers a theoretical 180,000 possible items. In addition, 70% of the orders come from just a handful of Hoerbiger’s largest customers. Balancing workflow and managing capacity quickly became an issue. To add to this issue, is the arrangement with their largest customer to provide a custom solution to their In-Sync system allowing the customer to automatically accept electronic orders while maintaining a commitment to fulfilling orders in 3 weeks instead of the company’s standard 4-5-week lead time.
“Our business recognizes that our customers can have a crisis that needs our help to supply them with the parts their emergency needs. For these situations we have our ‘Rapid Response’ program where we can manufacture and ship almost any of our products in 24 to 48 hours direct to their site. This of course impacts every other production order so combining APS with our In-Sync program, you can see why accurate and visible planning and scheduling is so.”
At Hoerbiger’s metal and plastics facility in Pompano Beach, we can see the extent of the planning and scheduling challenges. With 70 resources arranged in dedicated cells, these resources can be virtual, such as the Manufacturing Planning Group, or physical such as the company’s saws, lathes, mills, deburring machines, lapp flat machines and cleansing equipment.
Paul Mittendorff points out,
“Depending on the size of the part, machining time variations can be between 5 minutes to 2.5 hours per piece. Setup times are also important considerations. For example, each time a different size or type of steel bar is loaded in our saws for slicing off the flat metal disc which forms the basis for a valve, this setup can take up to 20 minutes. Clearly it is helpful to have an element of batching. We require a rolling 2-day batching window. This again is something which has to be rescheduled every time there is a change in the order priority or when new orders are put on the system.”
Prior to investing in the Preactor Advanced Planning and Scheduling (APS) system and the Factory Viewer Manufacturing Execution System (MES), the company was reliant on its Materials Resource Planning (MRP) system for detailed planning and scheduling. Theoretically, the MRP system should be able to backward schedule all the relevant orders based on real world parameters.
However, as Mr. Mittendorff remarks,
“While this might be a theoretical possibility, in reality it never happened because there were simply far too many parameters that could unexpectedly change.” Each change would have a knock-on effect to any subsequent order and to make matters worse, because of the lack of visibility of any problems actually happening anywhere in the entire production facility, the first we knew about a problem was when a customer order could not be completed on time for shipment.” He continues, “Take as example a typical In-Sync order where the customer needs 40 complete valves for a large compressor. The customer will have a dedicated transporter ready for the finished compressor and be paying for this by the day. To meet our committed delivery date, we need all 400 components ready on time – 399 isn’t enough. A problem with just one component out of 400 would cause a delay and incur significant cost to the customer.”
MAKING A CHANGE:
The company recognized it needed to do things differently. They recognized the lack of visibility and ability to update their current process was not working and determined a dedicated, powerful, yet flexible APS solution running in conjunction with an agile MES system would be the answer.
It was decided to test just such a system in a small production cell within the Pompano Facility. Production within this cell was running with an average late list report running close to 30 pages. Moreover, at every production meeting, the focus of attention fell on the production supervisor of this cell who was constantly being asked to explain why everything was running late and where everything was.
Feeling that Preactor and Factory Viewer could help deliver the results required, Mittendorff worked with Florida based Lean Scheduling International (LSI), the leading North American Preactor partner, to implement Preactor and Factory Viewer in this cell.
“It was clear that LSI had the experience and insight to make Preactor & Factory Viewer work to meet our specific requirements and help us to overcome our challenges. We did look at several alternatives but with at least one competitor adding several zeroes in the costs of their quote, our decision was obvious. Considering the capabilities of Preactor with the level of LSI’s experience and the estimated costs, we knew the LSI approach was the best.”
A successful implementation in March 2008 quickly demonstrated the benefits of Preactor and Factory Viewer within Hoerbiger. Three months after implementing the prototype Preactor APS and Factory Viewer MES, this production cell’s late list had gone from 30 pages to zero and the production supervisor no longer needed to attend the production meetings.
However, an internal change in Hoerbiger led to a decision to move towards a more manual pull approach to Lean Manufacturing which saw the prototype use of Preactor and Factory Viewer removed. This move reflected a wide trend in manufacturing which Mittendorff acknowledges could prove to be beneficial to manufacturers of certain nature.
“Unfortunately, we were not one of them. We don’t make large runs of the same widget or small range of widgets every day. We are a very flexible, high-mix/low-volume manufacturer which needs much quicker response times, higher flexibility, and better visibility than manual lean techniques provide.” He continues, “We moved to a pull system trying to fix 8-hour buckets of work across the plant. But 8 hours of saw operation time does not correspond to 8 hours of lathe time or 8 hours of milling time. Not only did we end up with huge bottlenecks and resources standing idle, components were not being made in the right sequence and therfore were not being completed when they were expected and required. As mentioned before, if you need 400 components available on the same day to assemble and ship to the customer, having 99% of them done on time for us is a failure.”
After almost a year of trying to make the manual system work, another internal change gave Mittendorff the opportunity to implement changes. Armed with the earlier proof that Preactor and Factory Viewer could help deliver the results required, management again tasked Mittendorff with implementing these systems. But this time the implementation would cover all the machining resources of the plant and would be tied into the company’s new SAP system. Given his prior positive experience of working with LSI, the team was once again brought in to help.
“I recall Mike Liddell of LSI reviewing our existing manual system and saying, ‘You know that’s not going to work here, don’t you?’ He pointed out the same 3 reasons that I had seen to be the reasons why this lean pull system was failing. This was another example of why I knew that Mike just ‘got it’ when it came to understanding our requirements.”
BACK ON TRACK:
After having the prototype Preactor and Factory Viewer system dormant for over a year, the ERP changes and expansion of scope clearly necessitated changes in the systems. In terms of system flow, all orders are now entered into SAP which contains all the relevant product process times and routing information. This is then passed to Preactor which handles the detailed capacity scheduling to determine which machines to most efficiently run each operation and which production sequence achieves the best results. Resulting detailed “work-to” information is then presented to each resource on the factory floor by the Factory Viewer system whereby operators can see the current live jobs they are scheduled to work on. The operators record via Factory Viewer when set-up time starts, when the actual process starts, and when it ends. This information is sent back into SAP as well as Preactor which updates the schedule accordingly.
As Paul notes, “We use SAP to do high level MRP scheduling. SAP manages our parts demands and gives us windows of production time when we expect a part to be started and completed. The part’s production is then optimally scheduled within Preactor. This allows Preactor to handle the tasks of applying complex machine routing rules, parts prioritization, and setup sequencing for efficiency gains. The use of Factory Viewer closes the loop by providing real time data acquisition, order visibility and the feedback to Preactor to allow for schedule changes necessitated by events on the factory floor.”
Even looking from a systemic viewpoint, the benefits are clear. Hoerbiger now has complete, real-time visibility of what order is where, and whether the actual schedule is in line with demands.
Mittendorff says, “No one person alone can mentally track and manage the progress of 10,000 operations on the plant floor. Now, as soon as a problem or any variance occurs, we can see it immediately and take whatever steps are required to ensure that we get the order back on track, so all components required to complete any given order become available on time.” He continues, “In addition to information, Preactor and Factory Viewer also gives us options. We can see very clearly how product mix affects our capacity and we can make short-and-long term decisions to stretch our capacity in areas that would yield the best results for us to be on time to our customers.”
As a result of better prioritizing and sequencing of jobs on the schedule, Hoerbiger has seen an increase in productivity of over 20% without increases in human or plant resources. Finally, the information that Preactor and Factory Viewer generate provides an overall additional layer of business intelligence that filters into the rest of the company. The company can look ahead on the schedule and see accurately when it might need to sub-contract work out if it’s potentially going to overload an internal resource.
“There’s little chance for one of our assembled products to ever being completed on time if all the manufactured components do not progress in a controlled manner. Preactor & Factory Viewer ensure that this happens while also helping us to optimize the correct sequencing of jobs throughout the plant.”
And as for the future, Mittendorff is convinced there is much more to come from Preactor and Factory Viewer, and the company has short- and medium-term plans to expand their use into other parts of the plant and into other Hoerbiger plants.
The final word belongs to Mittendorff: “Our business relies on getting 100% of our production right, 100% of the time. With Preactor and Factory Viewer, this is realistic and achievable.”