MANUFACTURING SIMULATION

Case Study

A Client was planning on ramping-up production and so wanted to bring a previously out-sourced process in-house. The process was expensive, but was cost-effective to out-source at low volumes. The cost of bringing the full process in-house was very expensive and had a long payback period as production was planned to be ramped over three years and most of the savings were made in the last year.

An initial investigation uncovered several key issues:

 

  • Out-sourcing process was very expensive, it required well trained operators, and specialised equipment. There was a high risk of operational failure due to the complexity of technical transfer.
  • Bringing process in-house at full capacity was very expensive, in the first year the equipment would be underutilised. If there was any delay to the plant ramp-up this underutilisation would continue for longer.
  • The equipment was specified and sized for only one product.

Choose business data analytics

THE ASSESSMENT

Identified the following:

  • Mapped and modelled out-sourced processes.
  • Identified the skills required to operate new process.
  • Ran what-if simulations for different configurations of equipment to determine sensible timings of equipment installation. The aim was to match capacity with the production plan and minimise capital expenditure during early stages of the project.
  • Used computer modelling to ensure sufficient capacity at all stages of the installation of all product types.

THE SOLUTION

  • Staggered installation. Ensuring the new process capacity was aligned with the production plan of the main plant.
  • Deferred some of the automation and materials handling capital spend until the increase in capacity was needed.
  • Defined a technical transfer plan to ensure technicians could run the equipment and support engineers could resolve mechanical issues.

THE BENEFITS

  • Conserved cash on early capital expenditure.
  • Quick capital payback period (4 months) for initial stage of installation.
  • Equipment could produce all product on same line.
  • Smooth technical transfer to key personnel.