Alberta manufacturer kicks off their digital transformation and Lean program with support and guidance from MEE Cluster.
CAPE Manufacturing specializes in the manufacturing of oilfield processing equipment. They are located in Halkirk AB and employ about 40 people. With a good reputation in the industry for meeting the needs and expectations of their customers, the demand for their product continues to grow. However, just like many AB manufacturing companies – especially those located outside of the major cities – the difficulty of attracting appropriately skilled people has proven to be a challenge and is a limiting factor to their growth potential. It is for this reason that they first reached out to the MEE Cluster.
MEE Cluster’s “LEAP”:
CAPE took advantage of the MEE Cluster’s “LEAP” (Lean Accelerator Program), which involved having an industry specialist in Lean do an on-site assessment of their production operations. This was followed by a second, deeper dive assessment, focusing on workflow, digitization opportunities, and included the engineering, management and administration of the projects.
The initially identified primary problem: CAPE is not able to add enough skilled people to grow to its potential.
The big problem: a manufacturer in Alberta has difficulty hiring enough skilled people to keep up with growth.
The primary addressable problem: there is little to no visibility of projects in process that would allow management to plan more effectively.
The solution: through the MEE Cluster’s “LEAP” initiative, MEE brought in specialists to help understand the problem, create a standard process map c/w weigh points, and then create a live dashboard to give the entire organization better visibility for planning and executing.
The results: the manufacturer can now optimize critical resources, shorten order fulfillment time (the time from order to invoice), increase production capacity, and quote on new work more aggressively and successfully. In short, this manufacturer is more competitive, more profitable, and can do more production with the same amount of people.
After the two LEAP Assessment visits, it was determined that there were realistic and tangible ways for the company to grow their business without being limited by the lack of available, suitably skilled people.
The number one addressable problem the MEE Cluster identified was the lack of visibility of all the projects’ statuses – on the plant floor and in the offices.
The projects at CAPE range from relatively simple (manufacture or rework of spare parts) to very complex (entire processing systems built specifically for each application); some may move through the shop in a week or two while others can take many months; some require little engineering, inspection or customer approval, while others require a lot of coordination with inside and outside resources. The actual time that the skilled people were working on the various components and parts of the various projects was not a big issue relative to the importance of getting the right things done at the right time.
Many projects must go through a series of “non-production” stages prior to actually being released for production on the floor, and each of these stages take time. Because there was no overall visibility to where each of projects were (in which stage and for how long), management had to rely on weekly update meetings that involved leaders from every department to review the status of every project. The “bottlenecks” were often not production operations but “upstream” processes.
The two problems of relying on the weekly meetings were: 1) they involved all the department leads for a considerable part of the first morning of every week (a big expense to the company, plus at a time when others may be needing their area leaders to help get their week off on the right foot), and 2) things left undone, or needing to be changed or revised, wouldn’t be reviewed by the group again until the start of the next week, resulting in lost productive time.
The lack of visibility of which stage each project was at, how long it was there, and when was it expected to be complete impacted a lot of things, including: the invoicing date (for progress payments and job completions); the scheduling of the skilled labour; the overall production capacity of the shop; the profitability of each job, and the accuracy of estimating and quoting new jobs (which affects the order win rate as quotations can be sent more confidently with more data).
The solution was to create a simple, composite dashboard that displayed what stage each job was in, how long it was there, and when it was targeted to be complete.
Similar to many AB companies of this size and industry, CAPE had developed effective but unintegrated internal processes for each specific department by leveraging commonly available technologies and familiar software. Replacing them all with a new end-to-end solution would take a lot of energy and resources (time and money) to determine the best solution and then to implement it. In the short and near term, making that kind of course commitment would only exasperate the challenges of attracting and onboarding more people to keep up with the demands of a growing business.
With help from the MEE Cluster specialists, an end-to-end workflow map was developed that could be applied to any and every job that CAPE took on and critical “weigh points” were then added. The weigh points were basically the points where a project was passed from one department or stage to the next. A master dashboard was then created along with simplified read-only dashboards for the various departments as well as a simple tool for updating jobs.
The live dashboard tool has provided a cost-effective and near-immediate solution to CAPE’s number one addressable problem, providing visibility of relevant project information, in real time. The dashboard drives inter-department accountability, improving project outcomes for all the stakeholders and ultimately to the customer; it supports the company’s LEAN objectives by providing empirical and meaningful metrics that drive improvement; it engages everyone in the organization by letting them see how their efforts affect the outcomes of the company daily; it is a resource planning tool that helps the company utilize its most valuable resource most effectively, and it is now also providing the company with the necessary data (and time) to help them make the right longer term decisions pertaining to pending future investments in technology, equipment and people.
Every business needs a map and a dashboard – a map to show clearly where you are and where you are trying to go, and a dashboard to tell you specifically how you are doing, in real-time, day-to-day, so you get there without delay, detour, or unnecessary effort. Through MEE’s LEAP assistance, CAPE now has both a map and a dashboard that help them better navigate the challenge of growing their company in a challenging labour market while at the same time, positioning them for future challenges and objectives.
Interpreting the 2 dashboard snapshots 2 weeks apart (seen below):
The two screen shots were taken roughly 2 weeks (13 days) apart. The Job names have been filtered from the view as it is proprietary information. During the 2 week period, many jobs were completed (shipped and invoiced. Jobs are not removed from the dashboard until they are shipped and invoiced). New jobs won (new orders received) were added.
In this company, jobs can be small with short lead time, or very large with long lead times. The goal of the dashboard is to be a “digital hijunka box”, keeping track of all jobs to make sure all jobs move through the operation effectively, maximizing the utilization of skilled resources and minimizing delays between operations, regardless of the size of the job or the total lead time.
In the screen shot above, there is more red on the left half of the dashboard then there is on the screen shot below. Since jobs move from the left of the dashboard through to the right, any missed target (red ‘LATE’) on the left ends up compressing the time available, putting the job “at risk” of not being completed on time. When jobs are “at risk” of not being completed on time, spontaneous decisions get made to accommodate jobs “at risk”, which then has a ripple affect on other jobs in the shop.
On the screen shot above (about 2 weeks later), there is no red “LATES” on the left side of the dashboard. This indicates jobs are getting started better and less time is being lost on front end operations. This takes the unnecessary pressure off of plant floor operations that were caused by juggling jobs to accommodate looming deadlines with insufficient time. The other noteworthy observation from the above screen shot is the “IN PROGRESS” work activity is happening on the bottom of the dashboard (most recently won jobs), rather than throughout the dashboard. The only exception this is one job that is still awaiting a customer’s approval, but other than that, everything that is within the control of this manufacturer is moving through the dashboard (and the entire operation) smoothly.
Anticipated Longer term benefits:
It will take 60 to 90 more days to see the benefits of this improved workflow hit the financial reports. The anticipated result is, quicker cash conversion (more money in the bank, earlier), more production and revenue (with the same or lower labour and input costs), and increased profitability. The company’s throughput capacity will also increase allowing them to bid on and win more jobs (depending on market opportunities), growing revenue and profits further.
The MEE Cluster would like to thank CAPE Manufacturing Ltd. for allowing us to use our enagement with them as a Case Study and being able to share the information publicly.
Paul Hogendoorn, MEE Cluster Digital Transformation Consultant
View the LEAP page to learn more about how the Cluster can support your company in digital tool, automation, and LEAN adoption.