OEM Panels - Large Company Case Study

Large Company Situation
OVERVIEW - A National compressor manufacturer produced a wide range of control panels. They experimented with out-sourcing their control panels to a high-volume manufacturer. This was unsuccessful. Their second out-sourcing experiment was with OEM Panels, which has been very successful. They started by contracting their control panel production to us. Six months later we helped them completely redesign their control panel product line to add features, reduce cost and simplify production. Six months later we built them a Configurator to simplify order processing and streamline their process. Our relationship continues to grow and be a win-win for both companies. Let’s start with the facts.

PRODUCTION DATA - The compressor manufacturer’s minimum order is (1) compressor. Their standard delivery is (4-6) weeks with annual shipments ranging between (200) and (400) compressors per year. They offer (921,600) possible equipment configurations, with (29,952) possible control panel configurations. Their compressor/control configuration data is shown below.

(13) Compressor Product Lines
(400) Frame / Motor HP / Voltage configurations
(4) Start/Status Indication Options
(3) Automatic Start Options
(2) Customer Interlock Options
(3) Safety Interlock Options
(4) System Purge/Test Options
(2) Alarm Indication Options
(2) Pressure Indication Options

ORIGINAL PROBLEM - The compressor manufacturer was experiencing compressor shipment delays caused by control panel production problems.

Large Company Problems
SCHEDULING – The compressor manufacturer was optimistic about scheduling. They were building stock compressor control panels for inventory. As each compressor went into final production, a stock control panel was modified to match the specific requirements of that compressor. Their schedule did not include allowances for control panel problems. As a result, any control panel problem experienced during final production delayed final testing and shipment.

PRODUCTION - The compressor manufacturer was handling every control panel twice, once when they produced it for inventory, and again when they modified it for production. The compressor manufacturer produced control panels in batches, and they reduced their (29,952) possible control panel configurations to (43) to simplify their batch production. As a result, every stock control panel needed modification before it could meet the requirements of any compressor in production.

INVENTORY– The compressor manufacturer was paying for control panel inventory and some portion of it was constantly being rendered unusable. As stock control panels were modified to prepare them for production, control panels were sometimes rendered unusable as parts were removed from one to prepare another.

ENGINEERING - The compressor manufacturer had limited engineering support for its control panel business. Attracting the right people can be costly and short term. As a result, no one actively directed its control panel business, and there was limited supporting information. They had (2) schematic drawings representing their (29,952) possible control panel configurations, and no written sequence of operation.

Large Company Solutions
BUILDING BLOCKS APPROACH - OEM Panels builds software building blocks to describe each of the manufacturer’s unique control panel requirements, including all standard options. OEM Panels builds a software matrix to describe all of the manufacturer’s (921,600) standard compressor configurations, including rules for application of standard options.

ORDER PROCESSING INNOVATION - OEM Panels builds a control panel Configurator allowing the manufacturer’s Order Entry personnel, with no control panel knowledge, to order control panels for any of (921,600) compressor configurations, from any of (29,952) control panel configurations, and apply a compressor serial number. Purchasing establishes a new blanket purchase order allowing Order Entry to order control panels with limited Purchasing involvement, which advances control panel ordering to its earliest possible point.

PRODUCTION INNOVATION - OEM Panels builds serial numbered control panels for specific serial numbered compressors scheduled for production. OEM Panels ships them (1) week prior to the compressor’s scheduled production. The manufacturer applies each serial numbered control panel to its matching compressor serial number.

ENGINEERING INNOVATION - OEM Panels builds an electronic document matrix including all required control panel documentation. Each control panel ships with its own unique assembly documents, which are also emailed to the manufacturer’s document control department.

ENGINEERING REDESIGN - At the manufacturer’s request, OEM Panels completely redesigned their control panel product line, incorporating new features and new technology, allowing them to provide a better product at a lower cost in less time.

Large Company Results
The relationship the compressor manufacturer enjoys with OEM Panels has affected them profoundly. Control panels are no longer a production obstacle.

FIRST THINGS FIRST - The compressor manufacturer originally wanted to eliminate shipment delays caused by control panel production problems. This was achieved. Their promised standard delivery is (4-6) weeks. And for the first time they can actually ship in (4) weeks.

ORDER PROCESSING - Order Processing is simplified. Order Entry orders serial numbered control panels on a schedule that matches serial numbered compressors scheduled for production.

INVENTORY - Inventory Burden is reduced. The compressor manufacturer receives serial numbered control panels (1) week before they are required in production and no modifications are required to prepare them for production.

PRODUCTION - Production is simplified. Production pulls serial numbered control panels from inventory and applies them to matching serial numbered compressors. No modifications are required to prepare them for production.

ENGINEERING – Engineering is improved. The compressor manufacturer provides better control panels at a lower cost with faster delivery and better documentation, and Engineering is able to direct control panel research and development without getting bogged down in it.

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