Tag Archives: Manufacturing

There’s £125 Million Up for Grabs for Your Supply Chain – Have You Got Yours?

Late last year, the UK government announced the creation of a new fund to assist businesses with improving and enhancing their supply chains. £125 million pounds has been set aside, allowing businesses in any industry to compete for the funding. The business secretary Vince Cable expects the funds to be used to strengthen domestic supply chains, allowing British businesses to remain competitive in the event of natural disasters such as the Japanese tsunami or the floods in Thailand affecting the UK.

Originally it was suggested that companies register their initial interest in the scheme during December 2011, with the application process proper opening this month. As a result businesses are encouraged to contact the Department for Business, Innovation and Skills (BIS) for full details as soon as possible.

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The BIS are also keen to emphasise that the funding is available to any business, regardless of size, ensuring that SMEs also have a chance to access the money. Traditional manufacturing industries such as aerospace, automotive and chemicals are all expected to apply, although emerging technologies like renewable energies are equally entitled to funding. Investments in equipment, research and development and training are all eligible for government cash.

The focus on growing and strengthening the UK manufacturing sector has also led to the creation of the new Manufacturing Advisory Service (MAS) which is tasked with providing assistance to SMEs in the sector. Business Minister Mark Prisk has announced that the MAS will help to generate an additional £1.5 billion in economic growth, creating 23,000 new jobs in the process.

These two new initiatives also expected to attract global companies interested in co-location of key supply chain elements. However all interested parties are encouraged to apply for funding sooner rather than later in order not to risk missing out altogether.

Supply Chain Management: Preparing for Material Shortages?

Supply Chain Management: Preparing for Material Shortages?Much is made of the impact that natural disaster can have on the supply chain, but businesses in the manufacturing sector are also having to think more strategically about sourcing materials which are becoming ever more rare as we consume more. The British Geological Society has gone on record to state that 52 commonly used minerals are now classified as rare. More troubling still is that 27 of these can only be obtained from China.

Alarm bells ring for supply chain managers whenever their business is forced into a single channel as the margin for knock-on effects on production and stock level is nullified. Where China is the only supplier of elements critical to high tech product development, the best that a business can do is source a number of suppliers to provide fail-over in the event of a disaster. That or stockpile materials, driving up prices in the market and increasing costs through warehousing and the like.

Sourcing additional suppliers can be costly and inefficient, particularly where a high degree of integrated supply chain management between buyer and seller is required. Each new supplier requires significant investment for full onboarding, in both time and money. The provision of a hosted supply chain portal or method by which systems can communicate automatically with minimum onsite intervention can reduce many of these costs whilst delivering the benefits expected of an integrated system.

And although these mineral shortages are currently restricted to high tech electronics manufacturers, other materials are certain to become scarce, affecting the wider manufacturing sector as a whole, regardless of output. The conscientious supply chain manager will be not only scouting for alternate materials and providers, but planning for the capacity required to support and maintain the business relationship.

Does your current supply chain management system provide the flexibility required to add additional capacity as and when required? Can it communicate cross-border without major intervention? If not, perhaps you’d best give Celtrino a call to discuss their Smart Admin platform which can do all this and more.

SCM at Boeing and the Dawn of a New Age in Aircraft Manufacture

Although the Dreamliner promises to change the aviation industry thanks to its increased fuel efficiencies and revolutionary materials, Boeing nevertheless underwent a number of nightmare problems which threatened the future of the aircraft. Originally promised for delivery to customers in May 2008, a series of catastrophes delayed shipment until October 2011. As consecutive delivery dates came and went, industry analysts and competitors seized on Boeing’s problems as evidence that the company had completely lost the plot when it came to building planes.

Dreamliner, Boeing

Source: Wikipedia

A shortage of parts, inability of contractors to meet their obligations and even an onboard fire during a test flight all played their part in delaying shipment of Dreamliners which in turn cost Boeing dear. Additional investment in large-scale composite manufacturing technology further added to the construction costs. Factor in payments to customers for non-delivery of the aircraft and it is tempting to write the Dreamliner off as a horribly expensive experiment in outsourced construction.

Yet despite the problems and associated costs, the Dreamliner and its construction process are set to reap major returns for Boeing in the future. As with any new process, the implementation will always involve the resolution of a number of teething problems, but if done correctly, the lessons learned will only serve to improve the supply chain for future operations.

Although many of Boeing’s competitors laughed at the misfortune and the massive costs involved in initial construction, the potential profits from the Dreamliner over the next decade may well mean they end up laughing on the other side of their faces. The Dreamliner has been specifically designed for fuel efficiency – a hot topic as environmental concerns and rising fuel costs become uppermost in airline business models; by addressing these concerns, Boeing have stolen a march on their competitors.

The technology behind the Dreamliner has been made possible by the enhanced supply chain management systems utilised by Boeing. Using the lessons learned, Boeing have set out the stall for construction of their future aircraft models, and the potential for even greater profit margins.

Boeing Outsource When Lacking Skills

OutsourcingThe epic Dreamliner project instituted by Boeing changed the way many businesses look at supply chain management permanently. Although Boeing recorded several glaring problems, such as a 3-year delay in delivery of their first aircraft, the changes to their manufacturing and delivery process have fundamentally changed the future operations of their business for the better.

From the outset, the Dreamliner eschewed the traditional engineering goal of greater speed in favour of increased efficiency and economy. The lynchpin of this design was to be the use of carbon reinforced plastic composite materials for nearly 50% of the aeroplane, including the wing and fuselage.

As good as the idea was however, Boeing lacked the skills and equipment required for creating carbon composite components, fundamental to the success of the Dreamliner. The manufacturing of these parts was therefore outsourced to contractors who had the requisite abilities.

This shift to outsourced component construction required a paradigm shift in the Boeing supply chain and the way it was managed. To allow for free data interchange between supply chain members, Boeing implemented a ‘collaboration hub’ that kept stakeholders fully informed of manufacturing progress.

As the project progressed, the contractors encountered a number of problems which delayed the project as a whole and required direct intervention by Boeing. As roles were adjusted and responsibilities shifted around the supply chain, the implementation of the collaboration began to prove its worth by providing a single point of reference for every stakeholder. Production information was available in real time allowing for tweaks and balances at each supplier (of whom there were over 50).

Boeing took the brave step of starting a project which they themselves could not complete, but choosing a supply chain management system which would not only underpin the project, but adjust according to circumstances. Applying this scenario to your own business, how could a radical supply chain alteration benefit you? Is your current supply chain management system flexible enough to cope?

Boeing Tighter Supply Chain Integration for Success

Keeping a close eye on the supply chain is essential to ensure raw materials are successfully converted into saleable goods, but is observation enough to succeed? Boeing’s epic Dreamliner project demonstrated that tighter integration of the supply chain constituents was absolutely essential in order for the first of the new aircraft to be delivered.

The Dreamliner was born out of a desire for greater efficiency both in the aircraft itself and in the construction process behind it. Boeing took the previously unheard of step of outsourcing the manufacture of the aeroplane components to 50 specialist subcontractors and used a central supply chain management portal to keep tabs on progress. The idea was that the components would be created simultaneously at various plants and then delivered to Boeing for final construction in a three-day window.

Such a deadline requires that members of the supply chain be working in synchronisation with each other and that they are fully informed about progress at each point. As problems arose during manufacture, partners were kept abreast with delays and developments allowing them to adjust their own processes to compensate.Boeing Tighter Supply Chain Integration Success

The collaboration hub also allowed Boeing to keep a tight handle on supplier progress and provided a mechanism by which they could address issues with contractors as and when they arose. At certain points during the project, Boeing was forced to step in and reclaim certain responsibilities to ensure the project continued on track.

The stated goals of the Dreamliner project were impossible to achieve without close integration between suppliers, subcontractors and Boeing themselves. Close communication and working practices made the dream a reality where many industry pundits had predicted disaster.

Collaboration between suppliers has often been seen as an evil necessity, rather than a genuine route to success. The eventual success of the Dreamliner was hard won, but the lessons learned by Boeing will shape the way they work with subcontractors permanently.

How would your business benefit from tighter supply chain integration? What would you need to change to make it a reality?

How Boeing’s Customer’s Customers Inspire Their Success

For manufacturers it is often tempting to think in terms of satisfying our immediate customers’ needs – after all they are the ones paying the bills. But what if we considered the needs of our customer’s customers?

Boeing Passenger Zone

Source: Boeing

This is precisely what Boeing did in the run up to the release of their new Dreamliner aircraft. Widely recognised for its incredible efficiencies and revolutionary manufacturing process, the Dreamliner is also the result of extensive market research undertaken by the plane builder.

Traditionally, aircraft manufacturers build the shell of the plane and tweak the cabin innards to suit their customers, the airline. In this scenario, the needs of the passenger tend to be considered last – something Boeing regarded as fundamentally wrong. In 2000, at the start of the Dreamliner design process, Boeing instituted their Passenger Experience Research Center (PERC). This analysed the psychological and emotional responses of passengers to air travel. The research took the form of various focus groups as well as a look into the medical effects of flying.

Using the data gathered through PERC, Boeing managed to address a number of the passengers’ wants through clever design. The Dreamliner is intended to help passengers fall in love with flying again by helping them reconnect with their earliest positive emotions. The high tech carbon composite fuselage also allows for greater control of the internal cabin environment recreating atmospheric conditions closer to Earth and thereby reducing many of the negative health effects associated with long haul flights such as headaches, itchy eyes and dry noses.

By considering the needs of their customers’ customers, Boeing have created an aircraft which passengers actually want to fly in. The application of the results of extensive customer research has therefore made the Dreamliner easier to sell to airlines too.

All of this raises the question, how could your business improve by considering the needs of customers further down the supply chain?