Targeting Customer Serviceand Market Growth
Using Lean Methodology
Presentation by
George Foss, CEO
High Performance Manufacturing Consortium ConferenceMay 13, 2004 -- Oakville, Ontario
3L Filters Ltd.CambridgeOntario
Presentation Topics
Company Profile
The Need to Change
Why Now?
‘Front Office’ Initiatives
Measured Improvements
Future Vision
What We Do
Engineered Filtration Solutions for Industrial and Nuclear Power Plant Applications
Markets Served
General Industrial
20%
Water Treatment
20%
Waste Management
5%
Automotive 5%
Aviation 5%
Nuclear Power Plants 30%
Petrochemical & Industrial Chemical
15%
• Established in 1965
• Head office and 2 manufacturing plants in Cambridge, Ontario, Canada.
• Total 60,000 ft2 manufacturing capacity
• Design, development, fabrication and servicing of high value-added liquid filtration and separation systems
• Reputation for fast customer response
Company Profile
History of OwnershipE
stab
lishe
d by
Joh
n K
adar
Can
adia
n ho
ldin
g co
mpa
ny
intr
oduc
edU
.S. c
ompa
ny b
uys
maj
ority
Cur
rent
ow
ners
pur
chas
e
com
pany
Acq
uire
d A
llan
Pip
e Fa
b (1
00%
)
and
Urb
an In
dust
ries
(50%
)
1989 20001965 19951984
History of Market StrategyA
viat
ion
fuel
filte
ring
(Can
ada)
Nuc
lear
app
licat
ions
(Can
ada)
Gen
eral
filtr
atio
n
(Eur
ope
& P
acifi
c R
im)
Nuc
lear
app
licat
ions
(Chi
na)
5 m
arke
ts i
n 15
cou
ntri
es
2000 20051960 1970 1980 1990
Keys to Success
Complementary partnership skills…
QualificationsMarket Focus
Daily Activities
Bob Goel PresidentMSc (1972), P.Eng. (1976), PhD (1977)
Highly engineered & nuclear products
Technical proposals &
accreditations
George Foss CEO CMA (1975), BusAdmin (1984)
Conventional commercial
product lines
Operations Manager for
2 plants
State-of-the-art Engineering & Manufacturing
In-house design, analysis and manufacturing
Design Seismic Analysis Stress Analysis Manufacturing
Core Competencies
Nuclear Products
50% of revenue
Market Focus
CANADIAN
• OPG Bruce-A
• OPG Bruce-B
• OPG Pickering-A
• OPG Pickering-B
• OPG Darlington
• NBEPC Point Lepreau
• HQ Gentilley
• Maple-1 (AECL Chalk River)
• Maple-2 (AECL Chalk River )
INTERNATIONAL
• Cordoba Argentina
• KEPCO Wolsong Unit-1 Korea
• KEPCO Wolsong Unit-2 Korea
• KEPCO Wolsong Unit-3 Korea
• KEPCO Wolsong Unit-4 Korea
• Cernavoda Unit-1 Romania
• Qinshan Unit-1 China
• Qinshan Unit-2 China
• Washington Power
• North East Utility
Nuclear Power Plants Served
Disposable Radioactive Liquid Waste Treatment Filter for Nuclear Stations
Design & Engineering
Test & Performance
Manufacturing & Assembly
Nuclear Products
Permanent Nuclear Filter Vessels with Replaceable Basket
Primary Heat Transport Filter
Moderator System Filter
PHT Gland Seal Filter
Nuclear Products
Disposable Filter Baskets for Miscellaneous Nuclear Filters
Shield Tank & End Shield Cooling System Filter Basket
Pickering-A NGS
Spent Fuel Bay Basket For Pt. Lepreau NGS
PHT Filter Basket for Darlington NGS
PHT Gland Seal and F/M Filter Basket for Pickering NGS
Nuclear Products
4000 SCFM Single Tower Vapour Recovery Dryers3831 DR-1,2,3,4,7,8,9,10
Nuclear Products
600 SCFM Twin Tower Vapour Recovery Dryers
Nuclear Products
Market Focus
Commercial Product Applications
Engineered to Order
50% of revenue
• All major engineering consulting companies– Fluor Daniel– Stone and Webster– SNC Lavalin– Bechtel– Kellog Brown and Root
• All major Refineries and Chemical Plants– Exxon, Shell Oil, British Petroleum, Petro Canada, Chevron– Formosa Chemical, Formosa Plastics, Dow Chemical
• Many industrial and automotive in-plant filtration applications
• Aviation installations
Industrial Clients Served
Vertical Filter/Separators for Tank Farms
• Compact design• Code Qualification• Simplified Maintenance• Field Proven• High Performance
Compact V and VV Series Filter/Separators comply fully with API Bulletin 1581, Third Edition, requirements for Class B equipment.
Compact Filter/ Separator Vessels for Fixed Installations
Aviation Products
Filters with superior performance and reliability for assuring clean, dry fuel, normally used at the final point in an aircraft fueling system.
Custom Designed 3l-400-20
Fuel Monitor
Aviation Products
Fuel Monitors for Mobile Refueling Trucks
Filters designed to remove particles and coalesce emulsified water from hydrocarbon fluids.
The horizontal filter/separator design provides more convenient access to the
cartridges than the vertical design.
Aviation Products
Horizontal Filter / Separator / Monitorsfor Skid Refueling
Components
They can be constructed to
house numerous cartridges
within a variety of diameters to accommodate
flow rates.
Vertically oriented filters using industry-standard pleated paper media to remove particulate to 0.5 microns.
General Industrial Filtration
VF Series Fluid Filters
Vertically oriented filters designed to remove solid contaminants from a liquid stream using standard spunyarn cartridges which create effective separation using depth filtration. May also accommodate pleated elements.
Water / Beverage Industry
FWH Micron Filters
Multibag Filters
As standard or custom design, the BF series filters are able to handle high flow rates and large concentrations of particulate for a wide range of liquids.
Constructed to ASME Sec.VIII, MBF series filters are available as code or non-code vessels.
Paint / Ink Industry
Dehydrators
Repack Cartridges
Horizontally oriented vessels containing replaceable coalescent filter packs. A sump collects separated water and filtered contaminant for easy removal.
Pipeline Course Filtration
The Need for Change
The old ways weren’t working
Target The Vision
Corporate Issues
• Responsiveness to customers
• Availability of skilled engineering personnel
• Employee loyalty
• Rapid changes in technology
• Quality
• Market focus
• Trend forecasting
• Profitability
Market Issues
• Price pressures
• Rising Canadian dollar
• Need for global reach
• Declining customer loyalty
• Customer convenience
• Customer resource depletion
Where to Focus?
• Manufacturing?–Currently as efficient as feasible–Engineer-to-order production entirely
dependent on 'front-end' processes
• Engineering!–Greatest opportunity for improvement–Sales performance directly affected
How to Improve?
Apply principles ofLean Manufacturing
Step #1
Value-Stream Map Analysis
Bid accepted
?
Bid pkg. assembled
The Old Way
Costing done
BOM accurate
?
Preliminary design done
Data complete
?
Specs. collected
Customer Sales EngineeringEstimating / Purchasing
Staff available
?
Quotation requestedQUOTE
NONOSale Lost
NO
Material ordered
BOM accurate
?
Purchase Order placed
Detailed design done
Data complete
?DESIGN
Order processed
RECEIVING -- FABRICATION -- TESTING
Material correct
?
Drawings accurate
?
BUILD
NO NOEngineering
Change
Preliminary design done
Quotation requested
NO
NO NO
Purchase Order placed
Detailed design done
10 weeksTypical Time Frame
Why Now?
TIME
1960s
1980s
2000s
PR
OF
ITA
BIL
ITY
1990s
2002Economic Boom of China & Pacific Rim
1970s
Strategy
1. Get closer to the Customer
2. Eliminate internal layers that waste time and money
3. Build on in-house product knowledge
–Manufacturing delivery lead time
Tactics
• Standardize products and processes
• Empower Sales staff
• Improve company performance
• Require payback in less than 1 year
–Engineering throughput–Quotation success rate
–Quality control
errors
response time
Cost competitiveness
The Steps
Adopting a new Lean
methodology…
1) Management Commitment
• Reviewed technology marketplace–Partnered with established engineering
software development firm–Applied a proven technology platform
• Selected 13 product families for:–Detailed Design–Bill of Materials–Fabrication Planning–Costing
2) Defined Business Requirements
• Analyzed requirements for:– Sales – Engineering– Purchasing– Manufacturing
• Identified problems and constraints– e.g. lack of internal qualified engineering resources
• Collaborated with vendor to:– Create a simple web user interface– Formalize input / output documentation
3) Built Knowledge Database
Configuration ControlRules & Data
AssemblyConfiguration
ComponentParameters
4) Integrated with Operations
• Connected to existing network
• Wrote and tested ERP link to access:–Customer records–Cost standards (purchasing & processing)
• Trained staff–Sales to operate it–Engineering to maintain it
Overview of Implementation
• Multiuser environment suited for operation by non-technical staff
–Custom interface for specification input–Web-based, works on existing PC network–Server with embedded CAD engine, SQL
database, document output translators–Generates detailed 3D CAD assembly–Transfers B.O.M.s to ERP for costing
Intuitive Interface Product Specs
Automated Design 3D CAD Assembly
Costing Detail B.O.M. & Routing
Documentation Quote Drawing
Sales Collaboration 3D Reference
Automation Product Examples
Component Detail Welding Detail
Innovation Is Fostered
With more time for Engineering to improve product, new inventions
yield new competitive advantage…
Compare Old & New Closures
Time-ConsumingSwing Bolt
Effortless patentedEasy Access
Applications
• Sales Quotations– Rapid product configuration and costing– Design visualization and approval documents
• Purchasing - Accurate Bill of Materials
• Production Engineering– 3D CAD assemblies delivered in minutes– Last-minute design check, quick addition of
custom product details where necessary
Improvements (on Commercial Product Lines)
• Reduced average quote turnaround from 14 days to 3 day
• Increased sales success rate 8% to 25%
• Reduced pre-production engineering work 90% with generated CAD model
• Reduced schedule conflicts between standard & custom engineering by 40%
• Product quality delivery lead time
Future Vision
• Improve ERP interface (or replace ERP)
• Generate all low-level manufacturing instructions to improve costing detail
• Expose system to external Internet for access by distribution networks
• Add more flexibility for integrated system product (e.g Skid Packages)
Skid Package Example
Conclusions
• Targets for Lean were met– Commercial products and processes now
standardized– Company efficiency improved dramatically– Initiative payback less than 1 year
• A need for continuous improvement– Further streamlining of processes– Introduction of new products– Accommodating changing legislation
Contact Information
George Foss, CEO
3L Filters Ltd.427 Elgin St.Cambridge, OntarioTel: (519) 621-9949 ext 330Email: [email protected]
Targeting Customer Serviceand Market Growth
Using Lean Methodology