Based in Truro, ARCOL is a world-leading manufacturer and supplier of resistors for high-integrity applications. It has built its production systems using Lean processes to deliver a ‘make to order’ concept. This uses a multi-tier Kanban system for common sub-assemblies that are the starting point for bespoke products.
At the heart of its operations is WinMan software, which provides an integrated system linking all parts of the business – including manufacturing, purchasing, sales and accounts.
Key aspects of the WinMan software include the way it integrates with the Kanban process, the ability it gives to track and resolve quality issues, its CRM capabilities and the Lean Back Office functions it facilitates.
WinMan also supports continuous improvement across the business including initiatives in quality performance, quote conversion and margin preservation.
Technical Director Alun Morgan explains ARCOL’s Lean approach: “The entire model for the company is to manufacture to order with minimal over-makes. To do that your systems have to be responsive, you have to be able to plan effectively and you have to be able to share information for efficient operation.”
Operations Manager John Adams adds: “We used to have a semi-bespoke production system with a number of spreadsheet add-ons. It was quite disparate, with a lot of duplicated entry as different parts of the business required information that wasn’t necessarily available in one system.
“This was causing us problems and constraining the business, so we invited around 20 companies to tender for a replacement system. When we had narrowed the field down it became clear that WinMan was the best solution. It is flexible and agile, has all the information that we want and allows us to get all the reports we need.”
The implementation process was quick – the system went in in just under six months – and drew on experience across the company to configure the system for ARCOL’s specific needs.
John Adams explains: “We have a team of seven or eight people, each representing a different part of the business. The WinMan project manager sat with us and we would talk through a process and from our feedback they would configure it as we went along. We tried to have everyone involved in all of the process so that they knew what was happening across the business.”
From the customer’s point of view, the benefits of WinMan come into play right at the order stage. Alun Morgan says: “When the customer sales order comes in it is matched against our manufacturing capacity plan. Within WinMan we have reporting that shows what availability we have in manufacturing so we know straight away that we are able to deliver what they need in the required timescale. There is no guesswork. We can find out straight away when we put the order on the system if the products are ‘available to promise’.”
In production, one of WinMan’s most important strengths is the way it allows the smooth running of Kanban systems for Lean manufacturing. John Adams says: “Kanbans are a purely visual way of managing production. The operator has several boxes of components – Kanbans – and when one is empty it is taken away and refilled. This ensures that there is a constant supply of parts and doesn’t rely on complex production planning processes.
“In our Lean environment, WinManis there to record what has happened, not to control what happens, which is what a big MRP system would try to do.WinMan simply records the fact that you have filled a Kanban and backflushes the stock you have used from stores – it doesn’t interfere.”
At ARCOL, Kanbans are used to control two sub-assembly processes. End-caps and connectors are supplied from stores in Kanban bins. These are welded together and put in Kanbans for the next process where the end-cap assemblies are fitted to ceramic cores, which are themselves supplied in Kanbans from stores.
Each Kanban bin has a barcoded label with the product details, what it is for, how many parts are in a Kanban and, if available, a photo of the product. Production is simply driven by the need to fill up empty Kanban bins – either from stores or from the assembly cells.
At the end of each day the quantities of sub-assemblies produced is recorded using WinMan’s Kanban manufacturing interface. WinMan then creates a manufacturing order, takes the items consumed out of stock and puts the assembled parts back into stock. These sub-assemblies are then supplied in Kanbans to the production lines and provide the common core for families of bespoke resistors.
From this point on, everything is made to order against a specific route card. The cores are wound with resistance wire to the required value, encapsulated inside an aluminium heat sink. They are then finished, marked and ready for despatch.
Route cards are scanned at WinMan shop-floor kiosks at the start and finish of each process.WinMan takes the components consumed in that process out of stock and at the end of the process marks the operation as complete.
When the products are complete the manufacturing order is scanned off and recorded as finished product ready for despatch. Any rejects are recorded in WinMan along with a code explaining why they failed.
Alun Morgan says: “Analysing the results tells us where we should focus our continuous improvement efforts, and whether those efforts have brought the results we hoped for.This has enabled us to go from a reject rate of well above one percent to well below one percent. You couldn’t have done that in a manual system.”
Neal Edwards, Quality Manager, adds: “We would previously have had to go through paper records manually, input that into a spreadsheet and then analyse them. WinMan has probably saved me half a day a week just on doing this analysis.”
WinMan has powerful CRM (Customer Relationship Management) tools. Every enquiry, no matter how small, is added to the system, building a bank of information on each customer and potential customer including name, SIC sector, activities, their products, contact details, contact person, and so on.And all the information is linked to activity and readily available.
Managing Director Mike Pritchard explains: “We are getting a faster response to the customer – and it is a more coherent response with respect to the back end – it allows purchasing and production to see what is happening as well. It gives a more professional output to the customer. ”
Some of the refinements that the system allows include, for example, setting up standard or special pricing for customers and distributors, allowing accounts to be set up in Sterling, Euro or Dollars, and including price-break information on quotes, so that customers can see how they could save money by ordering more product. It also provides the power to analyse performance and initiate continuous improvement activities.
“We now have two years’ worth of solid data and we can start to use that to look at trends. I wouldn’t have believed how much business we have had in some sectors. It allows us to see where we could win more business,” says Mike.
“The system also gives an insight into how the existing business is functioning in terms of quote conversion and margin preservation. “When you type in an order that relates to a live quote the system picks it up – so you can see your success rate for converting quotes to orders. That will help us see what we win, what we don’t, and why.”
The system allows the sales team to see the margin on screen when they prepare a quote – and they also have gross profit margin targets to meet. It also provides margin reports for the management team.
“It is all about feedback. Giving them real-time information on the profitability of the job when they make their quote,” says Mike Pritchard. “My perception is that this has helped us control pricing. We sell fewer items beneath the line than we used to. And it is easier to walk away from orders that we can see are not going to be profitable.”
More savings have come from leaner back office functions. ARCOL’s Finance Manager Anne Bone says: “It has made the accounts job an awful lot easier. We used to have lots of duplication, cross checks and double checking of spreadsheets and reports. Now it has all been consolidated in WinMan.There is a trust in the system that we didn’t have before and a confidence that the numbers we are getting are correct. That is a huge thing and where a lot of the double checking came in previously.
“Order entry takes minutes when it used to take days and all our sales invoices and remittance statements are emailed out from within WinMan rather than sent manually. Inputting of sales orders is much easier and there are fewer mistakes. Pricing is all there in the system, whereas previously it had to be keyed in.”
The reduction in manual handling provided by having a Lean Back Office has freed up staff time to support other parts of the business, including HR and staff development.
Anne concludes: “Order entry takes minutes when it used to take days. That again allows us to be more proactive on quotes and enquiries. It has made us a much more efficient organisation.”
Summing up the benefits of WinMan, Mike Pritchard says: “The integration from enquiry, through entering an order, through purchasing, goods inwards, etc,onwards is fantastic and the reports we are able to produce, the follow-up we are able to do, the all-round sales activities it allows, are vastly superior to what we had before. It has allowed us to be more proactive.
“WinMan has supported our Lean processes and continuous improvement programmes and we are a better business for having an integrated system. We are producing more with fewer people and our turnover is higher. We have more time to be productive.”