Reducing air miles to make cost savings
A UK FTSE 250 world leading provider of mobile power solutions with a staff of 6000 who deliver solutions to clients in over 100 countries.
Within weeks of being appointed, Odesma had undertaken significant analysis of the procurement operation and third party spend data. This identified a number of areas where significant savings could be made.
They manufacture their fleet of equipment in locations in the UK and Dubai. The process for the power generation manufacture involves manufacture of a 20 ft. ‘Glide in ‘container which are fitted with fuel tanks in China and shipped to the UK for initial assembly.’
On receipt in the UK the container has a Manufacturing install silencer, radiator, DC lights and racor filters fitted. The Container is then shipped directly to Dubai. Additional Bill of Material (BOM) parts are also sent to Dubai within the container. On receipt at Dubai, the assembly of engine/alternator, control panel and final functional testing is implemented to complete final assembly of the finished product.
Odesma identified a potential cost opportunity by re-engineering the manufacturing process to use capacity and expertise in the organisation by re-routing the ‘Glide-In Container’ shipment directly to Dubai as opposed to the current route shipped via UK.
Identify cost opportunities within the organisation
Odesma planned and executed a series of workshops to establish the resource requirement and capability to implement full manufacturing scope of work in Dubai. Working closely with the manufacturing team to develop the plans and test them.
Fully understanding the volumes of containers manufactured and levels of cost for all of the components, labour and overheads as well as shipping was critical to accomplishing a robust baseline cost for the project.
Odesma investigated the feasibility of shipping the BOM separately to Dubai, fully assessing and costing the potential shipment savings. Engaging throughout with the client’s logistics team to ensure that all of the shipping issues were considered and costed accurately.
It was established during the discovery process that a number of BOM parts supplied into Dubai are not required or used. Therefore, additional savings opportunity existed by supplying a modified/reduced BOM.
The new process was mapped out fully and approved by the teams involved. Live trials were then set up to test the new manufacturing model in Dubai. The results were analysed and the new model was approved. From a project start in November 2015 the entire project was accomplished in 7 months.
This complex process re-engineering project resulted in annual savings in shipping costs, labour costs, process improvement costs and a reduction in unnecessary components.
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