Case Studies | Hoerbiger

Case Studies

Hoerbiger

From humble origins in 1894 Vienna, Hoerbiger has grown to become a leading player in the fields of compression technology, automation technology and drive technologyemploying a global workforce of 7,600 and achieving sales of 950 million euro

Hoerbiger branched into North America in the 1960s and now has 23 service centers in addition to 2 manufacturing centers one in Houston, Texas and a larger facility in Pompano Beach, Florida. When the company with its commitment to delivering cutting edge solutions needed to upgrade its planning and scheduling capabilities, it found the perfect fit with Preactor and Lean Scheduling International.

The Hoerbiger plant at Pompano Beach manufactures precision metal valves and plastic sealing components used in compression systems primarily for the oil and gas industry where the company has a very impressive 80% of market share. Approximately 75% of its output comprises fully assembled OEM items supplied direct to customers with the remaining 25% being replacement parts supplied direct or via the company’s service centers. In terms of scale, the plant processes thousands of tons of metal each month to manufacture products ranging from 1 inch to 1.5 meters in diameter.

At any one time, there is on average 1000 live works orders on the shop, each having up to 10 components requiring 10 operations, all of which can take a varying amount of time to complete depending on material, size and finishing etc.

The company’s approach is all individual components which can be sold separately or used in complete products are Made to Stock while all complete, fully assembled products are Made to Order (MTO) with 75% of orders being fully assembled products.

Paul Mittendorff is Hoerbiger’s Director of Manufacturing Systems and he outlines why accurate planning and scheduling is so critical to the company.

“In school 92% success is considered grade ‘A’ - in our business 99% is considered a Fail. It is simply impossible for any one person to keep track of this many products with this many parts requiring this many operations. It only takes one part not ready on time to result in a customer’s complete order shipping late. Success therefore requires complete visibility of not just what order is where, but whether each order including all of its sub components is on schedule or not.”

The nature of Hoerbiger’s business adds further levels of complication to this. To begin with the company has a potential product range of 228,000 items which may date back decades and be reliant on old hand drawn specifications. While 80% of production typically covers only 40,000 different products, the remaining 20% has to cover a theoretical 180,000 possible items. Add to this that 70% of orders come from just a handful of Hoerbiger’s largest customers and balancing workflow and managing capacity quickly becomes an issue. Then there is the company’s custom In Sync arrangement with its largest customer which automatically accepts electronic orders with a commitment to fulfilling these in 3 weeks instead of the company’s standard 4-5 week lead time.

This flexibility of lead times is not limited to just Hoerbiger‟s largest customer as Mittendorff explains. "Our business recognizes that our customers can have a crisis that needs our help to supply them with the parts their emergency needs. For these situations we have our 'Rapid Response' program where we can manufacture and ship almost any of our products in 24 to 48 hours direct to their site. This of course impacts every other production order so combining this with our In-Sync program and you see why accurate and visible planning and scheduling is so important.”

Hoerbiger has a dedicated metal and plastics facility in Pompano Beach and looking at just the metal production area demonstrates the extent of the planning and scheduling challenges. The company has 70 resources arranged in dedicated cells. These resources can be virtual, for example the Manufacturing Planning Group, or physical such as the company's saws, lathes, mills, deburring machines, lapp flat machines and cleansing equipment. Mr Mittendorff points out, “Depending on the size of the part, machining time variations can be between 5 minutes to 2.5 hours per piece. Setup times are also important considerations. For example, each time a different size or type of steel bar has to be loaded in our saws for slicing off the flat metal disc which forms the basis for a valve, this setup can take up to 20 minutes. Clearly it is helpful to have an element of batching and we look to have a rolling 2 day batching window. This again is something which has to be rescheduled every time there is a change in the order priority or when new orders are put on the system.”

Prior to investing in the Preactor Advanced Planning and Scheduling (APS) system and the Factory Viewer Manufacturing Execution System (MES), the company was reliant on its Materials Resource Planning (MRP) system for detailed planning and scheduling. Theoretically the MRP system ought to be able to backward schedule all the relevant orders based on real world parameters. However, as Mr. Mittendorff remarks, “While this might be a theoretical possibility, in reality it never happened because there were simply far too many parameters that could unexpectedly change.” Each change would have a knock-on effect to any subsequent orders and to make matters worse, because of the lack of visibility of any problems actually happening anywhere in the entire production facility, the first Hoerbiger frequently knew about a problem was when a customer order could not be completed on time for shipment. He continues, “Take as example a typical In-Sync order where the customer needs 40 complete valves for a large compressor. The customer will have a dedicated transporter ready for the finished compressor and be paying for this by the day. To meet our committed delivery date we need all 400 components ready on time – 399 isn't enough. A problem with just one component out of 400 would cause a delay and incur significant cost to the customer.”

The company recognized it needed to do things differently so Mr. Mittendorff was tasked with finding a solution. He recognized the lack of visibility of the plan and the inability to update it could be resolved by a dedicated, powerful yet flexible APS solution running in conjunction with an agile MES system. It was decided in late 2007 to test just such a system in a small production cell within the Pompano Facility. Production within this cell was running very late with the average late list report running close to 30 pages. Moreover, at every production meeting, the focus of attention was on the Production Supervisor of this cell who was constantly being asked to explain why everything was running late and where everything was. 

Feeling that Preactor and Factory Viewer could help deliver the results required, Mittendorff worked with Florida based Lean Scheduling International (LSI), a leading North American Preactor partner, to implement Preactor and Factory Viewer in this cell. “It was clear that Mike Liddell at Lean Scheduling International had the experience and insight to make Preactor and Factory Viewer work to meet our specific requirements and to help us overcome our challenges.” He continues, “We did look at several alternatives but with at least one competitor having several additional zeroes in the costs of their quote, our decisions were obvious. Considering the capabilities of Preactor with the level of LSI‟s experience and the estimated costs, we knew the LSI approach was the best.” A successful implementation in March 2008 quickly showed the benefits of Preactor and Factory Viewer within Hoerbiger. Three months after implementing the prototype Preactor APS and Factory Viewer MES, this production cell's late list had gone from 30 pages to zero and the Production Supervisor no longer needed to attend the production meetings.

However, an internal change in Hoerbiger led to a decision to move towards a more manual pull approach to Lean Manufacturing which saw the prototype use of Preactor and Factory Viewer removed. This move reflected a wide trend in manufacturing which Mittendorff acknowledges could prove to be beneficial to manufacturers of certain nature. “Unfortunately we were not one of them. We don't make large runs of the same widget or small range of widgets every day. We are a very flexible “High Mix / Low Volume” manufacturer which needs much quicker response times, high flexibility, and better visibility than manual Lean techniques provides.” He continues, “We moved to a pull system trying to fix 8 hour buckets of „work across the plant. But 8 hours of saw operation time does not correspond to 8 hours of lathe time or 8 hours of milling time. Not only did we end up with huge bottlenecks and resources standing idle, components were not being made in the right sequence therefore they were not being completed when they were expected and required. As mentioned before, If you need 400 components available on the same day to assemble and ship to the customer... Having 99% of them done on time for us is a failure.”

After almost a year of trying to make the manual system work, another internal change gave Mittendorff the opportunity to implement changes. Armed with the earlier proof that Preactor and Factory Viewer could help deliver the results required, management again tasked Mittendorff with implementing these systems. But this time the implementation would cover all the machining resources of the plant and it would be tied into the company's new SAP systems. Given his prior positive experience of working with LSI, Mike Liddell and team were once again brought in to help. “I recall Mike reviewing our existing manual system and saying „you know that's not going to work here don't you? He pointed out the same 3 reasons that I had seen to be the reasons why this Lean Pull system was failing. This was another example why I knew that Mike just „got it when it came to understanding our requirements.”

After having the prototype Preactor and Factory Viewer system dormant for aver a year, the ERP changes and expansion of scope clearly necessitated changes in the systems. In terms of system flow, all orders are now entered in SAP which contains all the relevant product process times and routing information. This is then passed to Preactor which handles the detailed capacity scheduling determining on which machines to most efficiently run each operation and which production sequence achieves the best results. Resulting detailed „work-to information is then presented to each resource on the factory floor by the Factory Viewer system whereby operators only see the current live jobs they are scheduled to be working on. The operators record via Factory Viewer when set-up time starts, when the actual process starts and when it ends. This information is sent back into SAP as well as Preactor which updates the schedule accordingly. “We use SAP to do high level „MRP scheduling. SAP manages our parts demands and gives us „windows of production time when we expect a part to be started and completed. The part's production is then optimally scheduled within Preactor. This allows Preactor to handle the tasks of applying complex machine routing rules, parts prioritization, and setup sequencing for efficiency gains. The use of Factory Viewer closes the loop by providing real time data acquisition, order visibility and the feedback to Preactor to allow for schedule changes necessitated by events on the factory floor.”

Even looking from a systemic viewpoint, the benefits are clear. Hoerbiger now has complete, real-time visibility of what order is where, and whether the actual schedule is in line with demands. Mittendorff says, “No-one person alone can mentally track and manage the progress of 10,000 operations on the plant floor. Now, as soon as a problem or any variance occurs, we can see it immediately and take whatever steps are required to ensure that we get the order back on track so all components required to complete any given order become available on time.” He continues, “In addition to information, what Preactor and Factory Viewer also gives us are options. We can see very clearly how product mix affects our capacity and we can make short and long term decisions to stretch our capacity in areas that would yield the best results for us to be on time to our customers.”

As a result of better prioritizing and sequencing of jobs on the schedule, Hoerbiger has seen an increase in productivity of over 20% without increases in human or plant resources. “There's little chance for one of our assembled products to ever being completed on time if all the manufactured components do not progress through the process in a controlled manner. Preactor and Factory Viewer ensure that this happens while also helping us to optimize the correct sequencing of jobs through the plant.” Finally the information that Preactor and Factory Viewer generate provides an overall additional layer of Business Intelligence that filters into the rest of the company. For example, the company can look ahead on the schedule and see accurately when it might need to sub-contract work out if it's potentially going to overload an internal resource.

 And as for the future, Mittendorff is convinced there is much more to come from Preactor and Factory Viewer and the company has short and medium term plans to expand their use into other parts of the plant and also into other Hoerbiger plants. The final word belongs to Mittendorff, “Our business relies on getting 100% of our production right, 100% of the time. With Preactor and Factory Viewer, this is realistic and achievable.”

 

contactLSI and Preactor as their Advanced Planning and Scheduling Solution. Case study Hoerbiger