«Silt (COMPETENCE Case study, Window Manufacturer Ltd. The company Window Manufacturer Ltd. is a fictitious company and bears no resemblance to any existing window manufacturer. ‘Window Manufacturer Ltd. (WIM) is a market leader in the sale of windows to houses and blocks of flats. In 1991 the turnover was SEK 280 M. The number of employees was 300. Like many companies in the building trade, WIM has made good profit. Demand has exceeded supply, there have been long lead times, and the focus has been on quantity. In other words, it has been a seller's market with little competition where it has been possible to change service and price levels without any appreciable change in sales volume. However, the downturn in business and competition from imported products has suddenly created a new situation, It is now a buyer's market with all that entails, In order to come to terms with the new demands from the market and to increase profitability and growth, in 1991 WIM initiated a process of change based on a strategy of time-based competition, “Time in WIM”, TIMWIM. WIM's goal with TIMWIM is to “create a competitive edge, increase 5 profitability and consolidate growth by increasing responsiveness to customer wo needs, quality and productivity by drastically reducing cycle times”, The market WIM manufactures three kinds of windows - wooden (60%), aluminium (30%) and 100% aluminium (10%). Aluminium windows are made of a wooden frame covered with aluminium. The frame in 100% aluminium windows is made entirely of aluminium. Wooden windows are made entirely of wood. These three basic types of window come in different varieties and can differ in size, glass, suspension, opening and closing devices, window-bar etc. WIM sells its products on quality. It offers a ten-year guarantee. Customers include retailers, wholesalers, house manufacturers and builders. When windows are sold directly to builders the windows are entirely made to order. Made-to- order windows make up 80% of the total production volume to-day. Certain standard windows sold to retailers and wholesalers are manufactured to stock. When manufacturing to order itis often very difficult for the seller to get the buyer to specify his needs. Uncertainties may arise regarding colour, left- or ‘Supply Management (© Sitconrerncean ‘Window Manufacturer Ltd.doe D250 1right-hand suspension, number per size, and type of handle. Selling to retailers and wholesalers is often easier. WIM have about ten important competitors in the country and the same number again who export to Sweden, mainly from Norway and Finland. Import volumes have increased from 2-39 to 149% in three years. This has mainly been due to lower prices, shorter lead times and better delivery performance. The majority of imported windows are sold to order. Ina declining market WIM has been able to keep its matket share, and in some segments even to increase its share. To a great extent this has been achieved by putting the customer in focus, a process initiated by TIMWIM. 9 WIM has also improved its delivery performance from 65% to a stable level over 90%. In 1991 delivery times decreased from 7 to 5 weeks. However to- day a large part of the total volume is delivered with much shorter lead times due to over-capacity. g Production ‘The production flow consists of : - Woodworking, sawing, planing, milling ~ Surface treatment, puttying and painting - Aluminium working - Mounting fittings - Assembly ‘The manufacture of window-frame parts are made to partsstock due to the short lead times. After parts-stock, manufacture is made to order or to finished- goods stock. After parts-stock production is done in weekly batches. This ‘means that dividing up the products according to customer orders does not ) take place until final assembly. “ WIM also manufactures its own insulation glass. Raw glass is purchased which is then cut to the required size and mounted as insulation glass - ¢ double- or triple-glazing. Insulation glazing is always made to order. ) Insulation glazing is packed by order on a pallet in order to go directly to window assembly. ‘Woodworking Woodworking involves making finished frame parts. The raw material is timber (planks). The processes are drying, sawing, splitting, planing, gluing, milling for fitings and water-proofing, Surface treatment Window-frame parts are basically assembled, coated, puttied and painted. © Sitcourerencean Supply Management 2 ‘Window Manufacturer Ld.doe D250- Silt COMPETENCE Aluminium working WIM purchases aluminium in standard lengths (6m) but in the colour ordered. In other words WIM must cut the profiles. In the case of 100% aluminium windows cutting and milling work for the fittings must also be done. Mounting fittings All types of fitings (espagnolettes, locking mechanisms, hinges etc) are mounted on the window frame before going to assembly. As has already been men- tioned weekly batches are kept together until fittings are mounted. After this, the batches are divided up into their respective orders. Assembly Final assembly consists of putting together the window frames, in some cases aluminium parts and window bar and the glass panes. The assembly and the packaging that occurs directly after is done customer order-wise. Planning Production planning is done according to a predetermined time schedule. ‘The planning of a weekly batch starts on the “stop-day” for putting in new orders (Thursday or Friday). Then planning produces : - The specification of the week's batch, both to stock and to order. - Amount of sawing work - Reserve materials ‘The detailed plan is then taken by the foreman who has designated days for when the batch is to be ready and leave the respective departments. Purchasing In 1991 TIMWIM set up goals for cycle times in preparation and production. Preparation should take a week and production four weeks. In other words a lead time of five weeks. WIM achieved this goal. The goal for 1992 is 15 working days, 2 days in preparation and 13 days in production, The Produc- tion Manager is convinced that the manufacturing cycle time can be brought down to 10 days. In order for WIM to achieve its goal for 1992 WIM's suppliers must cut their lead times to WIM. The whole purchasing activity must be geared to cutting lead times, improving delivery performance, more JIT deliveries and increased co-operation in product development. ‘The main responsibility for purchasing lies with the Production Manager. He has decided to turn to a consultant for help to do a thorough review of purchasing activity. He would like some suggestions for strategies that purchasing should follow. He would also like to know which materials are particularly important with regard to achieving the goals set in TIMWIM. ‘Of course Purchasing has worked with improvements based on TIMWIM during 1991 - these has mainly focused on the internal routines ‘Supply Management © Sitcomrersnceaw Window Manufacturer Ltd doc D250 3