Steve Sterling, Contributor

Views from Corner Offices – Tiered Suppliers and Lowering Maintenance Costs

By Steve Sterling, Contributor | Permanent Link


In this series of interviews with senior managers, I explore how the supply chain affects total cost of ownership of packaging technology.

Allpax started life as an engineering organization that outsourced its manufacturing. Managers found that outsourcing manufacture of their equipment did not achieve the level of quality and delivery they set themselves. They brought manufacturing in-house, where it remains to this day. Product quality, superior service, and retort room innovation, including full automation, have made the company a success. I spoke with Greg Jacob, general manager of Allpax about supply chain issues and how these impact total cost of ownership.

Steve: What does an ideal supplier do for your company?

Greg: We informally segment Allpax suppliers into two categories, Tier 1 and Tier 2. Tier 1 suppliers provide great products and valued added services that lower our cost of doing business. Tier 2 suppliers provide us with quality components. Don’t get me wrong, all of our suppliers are important. But a critical few truly make a real difference to our business.

Steve: Can you give me an example of how a Tier 1 supplier lowers your cost of doing business?

Greg: We’ve worked out an arrangement with one of our suppliers to stock parts for us. This has helped decrease inventory and speed up turnaround when customers require those parts.

Another example comes from our motors and drives supplier. Our customer representative is a first-rate engineer. When we have a new project, we give him the load, speed, and other requirements and he comes back with the absolutely right sized and right priced motor and drive. He saves us engineering time and has proved time and again to be a valuable resource for us.

Steve: Are you seeing a trend to more technical support from your suppliers?

Greg: An increasing number of companies see the writing on the wall that if their customers – the U.S. based Original Equipment Manufacturers – are not successful then they won’t be. Allen-Bradley, for example, has formed an engineering group specifically focused on the needs of the machinery OEM. Leading suppliers provide technical expertise that helps specify components faster, troubleshoot problems more quickly, and free engineering and support teams for their own value adding work.

Steve: We’ve looked at what your suppliers are doing to lower Allpax’s cost of doing business. What is Allpax doing for its customers?

Greg: We recently designed a new software program that automatically alerts maintenance personnel when a particular part or system is due for preventive maintenance. It’s almost like an operator-interface-based digital assistant. Compare that interactive approach to a stack of maintenance manuals lying idle in someone’s office. There is no comparison.

Furthermore, Maintainer software offers a host of other features. Through a free viewer that we can download onto that operator interface, we deliver 3D modeling software. The maintenance person has at his or her fingertips graphic information on how to change and/or service a component. Let’s say a bearing housing that is up for service is located three levels below other components. The software allows the maintenance person to open up a 3D model of this component. The software can hide parts, graphically spin parts around, and provide an isometric view in color of what the maintenance person needs to work on. This can be a quite a time saver. When we give a presentation on this feature, you can see the maintenance manager’s eyes light up.

Steve: Any other new developments that highlight making the customer more productive?

Greg: Two more come to mind. Our Challenger software module is one. When the retort is put into “Challenge Mode” it will run a series of tests on critical control parameters. After the retort is “Challenged” a deviation report displays a full account of any issues. Imagine the costs in time, energy, product waste, and potential for liability when sterilization processes become unsynchronized. And here is an automated process that documents where you are in maintaining critical specifications.

Secondly, when customers request it, we have the means through virtual private networks to remotely and securely log onto the customer’s equipment modules and monitor performance. In effect we are virtually in the retort room to assist in trouble shooting or fine tuning a process in real time. The customer receives near instant support and does not have to wait for a technician to be dispatched. Customers with a number of plants can use the virtual private network capability to log onto their own remote sites and have real time information on production and operating parameters.

Studies show that the largest cost of owning a piece of equipment comes after it is installed. Each of these developments addresses that reality. The work that we are putting into these applications ensures that the overhead for maintenance and operation are minimized while quality production is maximized. And if we want to retain customers, and we do, then we had better be sure to offer them ways of lowering those maintenance and operations costs.

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