Preactor enables Silvergate Plastics to fulfil unique business strategy
Silvergate Plastics, established in 1985 and purchased in 1997 by British Vita, is a specialist provider of colour matched polymer solutions to end users both inside and outside the Vita group. Now part of the Vita Thermoplastic Compound Division, the company supplies solid colour concentrates for plastics in the form of pellets that provide absolute consistency of colour, when these are later processed by customers into brand sensitive, final polymer products such packaging, films, mouldings etc,. With 20 million possible colour permutations and where the customer is always right, there is no margin for error. When Silvergate began its evolution towards an automated planning and scheduling solution, it found the perfect match in Preactor.
THE CHALLENGE: CUSTOMERS SET THEIR OWN DELIVERY DATES!
With a product range in excess of 40,000 live colours, Silvergate operates on a 100% Make to Order basis, handling an average of 1000 orders per month ranging in size from 2 kilograms to over 30 tonnes. The company also is totally customer-centric, believing in a philosophy of getting it right, first time, and exceeding customer requirements. In a business context of every decreasing lead times and ever increasing flexibility, Silvergate has a unique attitude towards delivery times: it doesn’t specify any. Tony Bestall is Business Manager at Silvergate Plastics and VTC Synco in Italy and he explains how and why. “Historically we operated on a 5-7 day lead time with a premium service where we provided an absolute guarantee to deliver in either 48 or 72 hours. If we didn’t, we would credit back to the customer from 50 to 100% of the order value. This generated a sense of trust with our customers that they knew they could rely on us.”
He continues, “We all know that most companies will do whatever it takes to keep delivery promises to its leading customers, with this usually at the expense of the smaller customers. We took a deliberate decision that we would treat all our customers equally, and meet the delivery times they themselves specify.” Amazingly, this has not created an unworkable situation with every customer demanding their order tomorrow. Bestall sees this as a result of the trust Silvergate has earned from its customers. “Because they know we will deliver when necessary, if a customer doesn’t need an order for 2 weeks, they will say so. If they need it by tomorrow, they’ll say so. Either way, we will make that delivery.”
Perhaps surprisingly, the most pressing business challenge that Silvergate faces is the sheer pace of business that the company has to deal with, processing 1000 orders per month, all of which can have entirely variable delivery dates. This is exacerbated by the MTO nature of the business that means the company carries no finished goods stock. Visibility is critical; especially the means to accurately know how any job is progressing at any one time. As Bestall remarks, “Nothing’s static, everything’s always changing, and keeping track of what’s happening, where and when can be a full time job.”
BEGINNING THE PROCESS OF CHANGE
A full time job is precisely what the planning and scheduling used to be before Silvergate invested in Preactor, except one for three people. Planning and scheduling used to be a completely manual process which began with moving coloured plaques around a large rubber mat. These would be shuffled around, along with the accompanying paperwork to get a rough working schedule, which would then be typed into a spreadsheet. Once complete, the spreadsheet would be photocopied and manually distributed around the production facility. Bestall understates the point when he says, “It wasn’t very efficient, and to make matters worse, it would be out of date within 5 minutes as soon as the next order came in.”
It was Bestall’s appointment as Business Manager that brought about the beginnings of change at Silvergate. “We had to do something because we couldn’t adopt the manufacturing and sales strategy that we wanted without changing how we did our planning and scheduling.” The first step on this evolutionary journey was a drive to improve internal business processes by first mapping them accurately. This led to Bestall identifying 30 individual steps to process an order and a total of up to 60 steps from receipt of an order through to the order being delivered. This equated to 8 hours of time and represented a major point of waste within the company.
THE SOLUTION: PREACTOR PRODUCTION SCHEDULING SOFTWARE
Analysing these tasks soon identified a number of non essential steps which were quickly removed. Other important but repetitive tasks were identified and it was at this time that Bestall became aware of a potential automated planning and scheduling tool called Preactor running elsewhere within the Vita group. This led to initial discussions with Preactor Solution Provider RMS about the possibilities of using Preactor at Silvergate. In addition to RMS showing a genuine understanding of Silvergate’s business requirements, it also arranged for Bestall to see the product working in a live context in a similar business situation.
Convinced by this, and by the fact that both RMS and Preactor were trusted elsewhere within the Vita group, Silvergate invested in a Preactor 200 FCS system. Bestall is typically down to earth when he explains his reasons why. “We knew it wouldn’t fall over, and our initial plans were to simply use Preactor as a means of reducing the number of spreadsheets in our business processes and by doing so, create a quicker and more accurate way of communicating information to the shop floor.”
IMPLEMENTATION: TURNING THEORY INTO REALITY
Implementation primarily consisted of 6 days of consultation where Silvergate’s Bernard Nolan worked with RMS’s Warren Roberts to work out the protocols of information exchange between Preactor and Silvergate’s business management system, an internal group system called Vita soft. This would be a key step in reducing the significant paper chase that hindered Silvergate’s operating efficiency. It also involved a significant amount of work in setting up the operating parameters required for each product, including Order References, Product References, Customer References, Quantity, Colour Group, Raw Material Requirements etc.
After 9 months of development and tuning, the system went live in October 05. Nolan describes how the system worked at this stage. “We deliberately wanted to control each step so someone pressed a button to send information from Vitasoft to Preactor. Someone then had to press a button in Preactor to read the information and make any adjustments to the generated schedule. Once the schedule had been finalised, the process happened in reverse, with someone manually sending the schedule back to Vitasoft and someone manually receiving it back into Vitasoft.”
Whilst looking quite a manual process, Nolan is quick to point out that Silvergate wasn’t looking to fully automate the system at this stage. “We deliberately set about using Preactor as a means of evolution, not revolution. We wanted to enable our planners to do their job more efficiently and effectively. We also knew that we had a large cultural change to effect, both in terms of getting people to trust a piece of software as opposed to their own experience or gut feeling. This shift is essential because people often plan according to what they want to make, whereas we needed to plan purely according to our customer requirements.”
FIRST WAVE BENEFITS: MOVING FROM A SERVICE LEVEL OF 79% FOR DELIVERING IN FULL AND ON TIME WITH A 5-7 DAY LEAD TIME, TO 96-99% IN FULL AND ON TIME, WITH NO LEAD TIME!
The benefits were noticeable right away, most noticeably in the area of increased visibility. Silvergate could now see all the orders in the system in real time, and how each was progressing. When a new order was received, the impact of this could be seen, and Preactor could re-order the schedule right away as required. The time savings were also significant as the company moved from a service level of 79% for delivering in full and on time with a 5-7 day lead time, to 96-99% in full and on time, with no lead time. This demonstrable improvement also helped encourage a greater sense of trust in the system about what needed to be made, and when. As Bestall observes, “It helped expose the difference between what people thought was required, and what actually was required in order to meet our customer service levels.” Another benefit directly resulting from the time savings brought about by Preactor was the ability to remove the need for 1 of the 3 full time planners.
PREACTOR AT THE HEART OF ONGOING EXPANSION
A commitment to ongoing continuous improvement didn’t let the system remain as it was, in spite of the impressive benefits already achieved. The company was now looking at ways of automatically updating the schedule in real time whenever an order came in either directly from a customer or from within the company, with the updated schedule being pushed out to the shop floor. The existing P200 couldn’t cope with the levels of automation required so Silvergate investigated the Preactor APS 400 system, again from RMS. Nolan worked with RMS to identify the information exchange protocols and an ambitious go live date of late July 2006 was set. It was also recognised that this would be a completion to the cultural change already achieved because people would have to trust completely in the system. A standalone advanced planning and scheduling system on a separate PC allowed some final fine tuning before the main system went live, successfully, and on time.
SECOND WAVE BENEFITS: LIBERATING 30-50% OF PLANNER’S TIME TO PUT BACK INTO PRODUCTION MANAGEMENT OF THE BUSINESS
Both Nolan and Bestall recall the go-live very clearly, both describing it in terms of “taking their hands off the system for the first time”, with Bestall going on to describe “feeling a huge weight lift from my shoulders.” Now Silvergate has a system which automatically updates when a new order is received with this information being pushed immediately to the shop floor via the company’s intranet to be displayed either on a monitor or via a large plasma screen. This has freed up the planner’s time considerably, which prior to moving to Preactor APS 400, represented between 30 and 50% of the planners total work load. Now they are able to be much more actively involved in the actual production management side of the business which is bringing further efficiency benefits.
Silvergate has ambitious plans for the future in the ongoing evolution of its Preactor APS system. These include a move to a total hands off, paper free scheduling process within the company, and extending the use of Preactor APS 400 into like businesses across a number of other sites. Plans are already in process of implementing Preactor in Silvergate’s Italian plant and then running the planning and scheduling of the plant remotely from the UK. As Bestall concludes, “It is our passion and commitment to delivering what our customers want, when they want it, which drives our business. In addition to continually reviewing our internal business processes, Preactor has become an integral part of our ability to achieve our business model.”
Ardo sees the fruits of visibility by planning with Preactor
Ardo UK Limited, has been a Kent based subsidiary of the Ardo Group since 1994 and supplies high quality frozen fruit and vegetables to over 400 key customers in the Retail and Foodservices sector including Tesco, Sainsbury, Morrisons, Whitbread, Weatherspoons, and Aldi.