ELECTRO-MECHANICAL - CASE STUDY

The ultimate end-to-end manufacturing solution for an electro-mechanical assembly

A market-leading OEM that provided automatic packaging equipment to the food, beverage, and pharmaceutical sectors wanted to maintain its competitive positioning while better supporting global demand.

 

To this end, they required the expertise of a flexible manufacturing partner to provide an end-to-end manufacturing solution that could deliver complete products, to customers across the world, in especially short timeframes.

The Challenge

This OEM produced complex electro-mechanical packaging machines that could also print information like serial numbers and best-before dates on various food, beverage, and pharmaceutical products.

Each of these machines was configured to order, depending on its application and the country it was shipped to. A range of spare parts and optional extras were also available that needed to be included with an order as and when requested by the end user. 

 

However, the OEM required tested and available products, along with their requested optional extras and ancillary items, to be shipped on the same day the order was placed (provided the order was made by 2 PM) or, worst case scenario,  the very next day.

The Solution

To support the OEM with this need, ESCATEC implemented a range of agile procurement and manufacturing solutions in line with our end-to-end manufacturing support capabilities.

 

To optimise the procurement phase of the process, we:

 

  • Used the OEM’s annual sales forecast to ensure optimal stock levels were available both on-site and throughout the supply chain.

  • Accurately predicted raw material demand, using this sales data broken down into product variants, which our procurement team used to negotiate competitive annual supplier contracts and pricing.

  • Mitigated the effects of any unplanned peaks or troughs in demand by applying the ‘twenty-five percent rule’ (plus and minus) to the forecasted capacity amount.

  • Put in place a comprehensive, overarching Manufacturing Agreement (MA) that covered unavoidable minimum order quantities (MOQs) and raw materials with a lead time of over twelve weeks.

  • Secured the underwriting of twelve weeks' worth of finished goods, work in progress, and raw material stock by the OEM at any one time to retain flexibility and minimise stock commitments on both sides.

 

For a streamlined manufacturing phase, we:

 

  • Set up several lean production lines, each split into ten separate build stages, inside our mechatronics centre of excellence in the Czech Republic.

  • Situated the raw materials and completed PCBAs required to produce completed machines line-side, in front of each operator.

  • Installed a Kanban system, replenished daily by production supervisors, not operators, to maintain operational efficiency.

  • Continuously passed orders for configured products to our production team to action throughout the day.

  • Carried out functional tests and final finish checks (which included verifying all moving parts like gears, pulleys, rollers, etc., still turned freely) on all machines once they reached the end of the production line.

  • Thoroughly cleaned each machine.

  • "Shipped" complete and tested units into the OEM's dedicated warehouse area within our facility. 

 

Finally, for the distribution phase, we:

 

  • Booked completed assemblies into stock on the OEM's global computer system.

  • Released the product for sale, picked spare parts or accessories ordered by the end user, packaged the machines and ancillary items within branded packaging, and attached the OEM's official delivery paperwork.

  • Arranged transportation and shipped the products directly to end users throughout the world.

The Results

ESCATEC staff, trained on the OEM’s computer system, effectively worked on behalf of our client. Our staff acted as an extension of their logistics team to ensure orders received up to 2 PM local time in the Czech site were shipped that day, or those received after were shipped the next day.

We also managed a portfolio of around 2,000 spare stock-keeping units (SKUs) or different components on behalf of the customer. From these units, ESCATEC could ship around 20,000 spare items, of varying combinations depending on demand, per month.

 

This meticulous process enabled a smooth production run for every product manufactured, from the initial order to the final product, without the OEM ever having to see or touch their own product. With this approach we were able to ship roughly 800 finished machines per month.

 

This is the ultimate in end-to-end manufacturing solutions. As a result, the OEM could focus on designing its next cutting-edge product while expanding market share without any distractions associated with manufacturing, order fulfilment, or logistics.