Managing director of Mestec and lean expert, Jeremy Harford, shares a case study exemplifying Belfast-based defence contractor Thales Air defence and its journey to making considerable savings and sustaining a cost-cutting culture.

  • Thales Air at a glance
  • Providers of electronic equipment for aerospace, defence, security and transportation industries
  • Operations in 56 countries
  • 65,000 employees

Overview

Back in 2007, Belfast‑based defence contractor Thales Air Defence faced a challenge.

A leading global manufacturer of ground‑to‑ground, ground‑to‑air, and air‑to‑air missiles, the business had won a contract to partner with Sweden’s Saab Bofors Dynamics to produce shoulder‑carried anti‑tank NLAW missiles for the British Army.

But two immediate problems posed themselves. First, the tender for the contract had been highly competitive, and margins were slim. Cost control, in short, would be critical.

Second, the contract came with a traceability requirement in the shape of what were called ammunition data cards, effectively a full as‑built record of the individual components going into every single missile produced.

Challenge

Lean manufacturing initiatives had been in place at Thales for some time. However, the volumes involved in the new contract and the tough cost targets, meant the business would need to redouble its lean manufacturing efforts, as well as, low‑cost, efficient, flowline‑based production.

The traceability requirement would be a tougher nut to crack. Firstly, the company’s legacy MRP system couldn’t deliver the required functionality, but at the volumes involved in the contract, attempting to deliver it manually would add prohibitively to headcount. On another missile contract, running at much lower levels of production, the task required two full‑time product engineers, together with manual records and spreadsheets.

Serialising parts, and then scanning their barcodes, offered a foundation on which to build. But what was required was a way of tracking captured data and reporting it in a format the customer wanted—and doing so efficiently. Brian Abernethy, head of manufacturing at the company said:

“In the short term, the focus was on capturing the build history, and delivering it to the customer in the required format, without incurring non‑value added cost, and to do it in a way that didn’t need expensive IT systems.”

“After that, the focus was on accelerating our lean activities.”

Solution

Coincidentally, a sister company, Basingstoke‑based Thales missile electronics business, had made use of Mestec’s Manufacturing Smart Box terminals for quality management purposes.

Talking to their colleagues at the company, Abernethy and his team realised that the Mestec Manufacturing Smart Box system could meet their own traceability requirement.

“We quickly saw that Mestec’s functionality was much broader than we’d thought, and that we could use it to eliminate non‑value adding and non‑conforming activities.”

“From a lean perspective, it gave us data that we didn’t have, in a format that we could use to drive improvement actions.”

Results

But with missile deliveries scheduled for late 2008, implementation would need to begin immediately.

An early win, says Wilson Lenaghan, Thales’ work and material planning manager, was a visit to another plant running Mestec’s Manufacturing Smart Box system, where the team saw the potential for barcoding work‑in‑progress, and getting suppliers to barcode components.

“The more we looked at how we were working, the more we saw the potential to change our manufacturing processes, and to move away from ‘kitting’ and instead adopt pull‑based systems.

“The programme gave us the ability to link people to work centres, which not only gave us the ability to ensure that the people performing tasks were appropriately qualified and ‘current’, but also gave us log‑on and log‑off times, from which we could capture manufacturing cost and efficiency metrics.”

When the Mestec system was integrated with the plant’s MRP system in 2010 the act of logging‑on was then used to automatically trigger ‘back‑flushing’ through the bill of materials, with the old way of working completely replaced by pull‑based manufacturing and kanban squares.

“What began as delivering an ‘as‑built’ capability evolved into something far more transformational.

“Today, it’s all about best practice in material flow, and eliminating actions—such as kitting—that don’t add value.”

Abernethy adds: “Without doubt, we can demonstrate very real savings.

“From capturing and reporting ‘as‑built’ data, to faster cycle times and improved material flow, we’re a business today that runs far more efficiently.”

Turn the clock forward to today, and Thales has now purchased additional licenses, in order to extend the Mestec system’s reporting and dashboarding facilities to a whole new set of employees.

On one production line, the impetus has been the realisation that the Mestec item genealogy report contained a wealth of information about individual assemblies—who did what, when, and what the test results were.

Back on the NLAW line, lean manufacturing and the quest for efficiencies remain the driver, with the new system providing a rich source of data on actual versus standard times and costs.

Via reports and dashboards, the system is delivering valuable actionable information, and Thales is wanting to extend the number of people who can access these insights and exploit them in their day‑to‑day roles.