How to remain competitive as an outsourcing company in today's ever-changing market? This is a question that more and more companies are asking themselves, and Provan is no different. Their solution lies in a completely new approach to the customer-supplier relationship.
Discover Provan, Factory of the Future 2020 in video:
An obsession with innovation
Being able to put a Factory of the Future trophy on your mantelpiece is a nice reward but should not be a goal in itself. Rather, it should be a milestone and a nice incentive to continue on the path you have taken. Provan, an early winner of the ‘Factory of the Future’ award in 2015, perfectly exemplifies this statement. A constant obsession with innovation and optimisation enabled Provan to win this prestigious award a second time in 2018. Quick Response Manufacturing & Early Supplier Involvement are two important pillars in this story and provide an important foundation for continued excellence.
We talked with CEO Peter Tans who enthusiastically told us the company’s story.
“We are a subcontractor in the metal industry, offering steel, aluminium and stainless-steel parts in a one-stop-shop approach. Our speciality is welding work, laser machining and sheet metal work, profile machining and assembly tasks. We try to produce the required parts from A to Z in-house and this approach is attractive. Since our beginnings in 1998, we have grown to become a flourishing company that now employs 75 people and has an annual turnover of just over €12 million.”
Advanced Manufacturing Technologies
Quick Response Manufacturing
"Our first recognition as a Factory of the Future stemmed mainly from the implementation of a QRM (Quick Response Manufacturing) methodology. One of the main pillars of this corporate philosophy is to keep idle time - the time lost between two process steps - to a minimum."
By reducing this period, delivery time is kept very short. We focus more on time, less on costs. We reduce the TCO for our customers. This translates into a competitive advantage for them: thanks to our speed, they do not have to build up a stock and they can serve their own customers very quickly. "I can say with certainty that we were a pioneer with our one-stop-shop approach. Of course, many other companies apply this principle, but our interpretation of it is still radically different.
We do not have ‘customers’, we prefer to call them partners. We want them to involve us at an early stage, to examine how the feasibility of their product can be realised in the most efficient way possible, this is the principle of ESI (Early Supplier Involvement). In other words, we get involved early in the overall process and reserve capacity for them in our production process. The commitment we expect is, for example, the obligation of a minimum order, fixed by contract, although I prefer to speak of a 'gentleman’s agreement'.”
Fewer customers, but the risk is spread out
“Of course, this method of working also influences our commercial approach to the market. Before, we had 300 customers, now we have around 40. That may sound negative, but far from it because we are playing in a totally different division. We no longer make large series but rather smaller series of specialised parts. We only target growth segments, such as mechanical engineering, the eco sector, construction and the railway sector. These sectors often have very strict standards, and our added value makes the biggest difference there. These are also very diverse sectors and that is no coincidence. We try to spread our risk as much as possible.”
“This approach also meant that we have had to regretfully abandon some existing customers, but this was ultimately the right choice. Our turnover is still growing every year and today a significant part of it is secured by commitments. This is still unique for a subcontracting company. It was unthinkable five years ago.”
“I do not immediately see any missing links in our one-stop-shop approach, although I do see challenges and bottlenecks. Finding the right profiles for an SME is not easy. You constantly have to fight against various competitors in a labour market where the right profiles are in short supply. By profiling ourselves as a 'future-proof employer' and taking initiatives in this direction, we try to remedy the situation. In addition, the structure must be constantly monitored internally. In this way we have strengthened our management and we are preparing people to help achieve the long-term goals.”
Industry 4.0 is a tool, not a goal
“I see companies that 'want to become Industry 4.0', but they are often lacking a clear vision. 'Where do you want to go?' That is the first question that should be asked. Industry 4.0 can be applied very broadly: to your product, your processes, your organization, your business model, and more. For us, digitalisation was an important driver that guided us to our first award because it led, among other things, to the implementation of the planning software in our factory and to an innovative work organization scheme using a matrix-based structure (see below). Digitalisation was the driving force behind the QRM.”
The importance of networking
“For us, networking is an important source of information. The Factories of the Future group, for example, is very strong, but we also seek out information outside the group on a regular basis. We also sometimes sit down with customers and suppliers to see what we can learn from each other. We have set up a social business programme with one of our suppliers, for example.
A ‘networked factory’ must be constantly vigilant and enter into collaboration agreements that go beyond the traditional customer/supplier relationship. We also discovered Azumuta and their program for integrating digital work instructions during a networking event organised by our client Addax. This brings us even closer to becoming paperless. I guess we are one of the first subcontractors to work this way. At the moment, this method is 100% applied in our assembly department and we are deploying it in our production unit.
"Once again: paperless is not a goal in itself. It has to be seen in the light of our philosophy of simplification, increased efficiency and flexibility."
Human Centred Organisation
Responsibility of the operator
“We use the Propos software for the digital management of the schedule. This means that we do not need a separate planning department; the operator can plan their work autonomously. They have a screen on which the planning software runs, which is updated every 15 minutes. As soon as new production orders are displayed, the operator can adjust their work schedule, which maximises their involvement, one of the crucial pillars of QRM," said Peter Tans. "We have also extended this philosophy among the employees, so that we have moved towards an organisational structure with business units that are granted maximum ultimate responsibility. By moving from a hierarchical structure to a matrix-based structure, the end goal is the central concern and this prevents everyone working in isolation.”
Long-term investment plan
“We have not yet made any mistakes in our long-term plan. Of course, we want the most modern machine fleet possible, but this must fit in with our investment plan. We are also moving towards partnerships. If we have to make a considerable investment in a machine in order to develop a new product, we discuss with the customers how we can approach this together in the long term. Here, too, commitment from both sides is crucial. We take a certain amount of risk when investing in a machine, and they promise us a certain levy. The counterpart is that we offer them the certainty that their product can still be produced. And this enables us to supplement our machine fleet with the most modern machines. It is a win-win situation.”
Transformation advice - Factory of the Future
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