TNH plant
of aluminium
bottles
Pierre-Marie GALLOIS
Novembre 2004
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TNH plant of aluminium bottles
Context
The TNH plant manufactures aluminium bottles for varied applications :
o safety (extinguishers, …),
o medical (oxygen bottles for hospitals, …),
o industrial (gas bottles, …),
o sport (bottles of diving, …).
The market of TNH becomes worldwide, the prices drop, the pressure on the
deadlines is very strong and the diversity of the products related on the multiplication
of the outlets and the requirements of customization is in constant increase.
TNH currently delivers its customers in 16 weeks (8 weeks of order book and 8
weeks of manufacture) by offering prices higher than those of emergent competition
so much so that its historical customers start to turn to other suppliers.
The main TNH issues are thus, on one hand, to reduce its lead-times significantly
and to develop a greater flexibility, on an other hand, to face the compressing of its
margins, to reduce its costs (in particular via a reduction in work in progress) and to
increase its volumes.
The most effective lever to improve the service, to increase the throughput and to
reduce the work in process is a more powerful flow organization with a better control,
in parallel with an action aiming to improve machines reliability already quite
advanced.
Based upon the description of the context, of commercial aspects and manufacturing
and control processes below, your mission, if you accept it, will consist, knowing the
stakes of TNH, to make a diagnosis pointing out its potential sources of performance
and to propose the broad outline of a plan so called "performance conquest" at ninety
days, one year and three years.
Commercial aspects
TNH, is a company born with the beginning of the twentieth century ; with the passing
of years it forged a reputation of quality and professionalism, which placed it in
position of leader on its markets.
It lays out a core of customers very broad but unbalanced. A low number of
customers, all the great names of industry realize indeed about half of its incomes.
The market is in constant increase and the TNH sales network is effective, which
explains the current length of the order book, creating dissatisfaction from a part of
the customers.
Lastly, one assists lately with a degradation of the service rate (around 90% during
the previous year and less than 80% today) ; the phenomenon is certainly more
serious because current measurement is at the week whereas the customers request
deliveries from the day. The commercial teams criticize openly the incapacity of the
production to respect their due dates and to provide at least follow-up information
("it’s however so easy") to allow to make have patience the customers. "We are
always placed in front of the accomplished fact and spend all our time treating
complaints".
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Manufacturing process
The manufacturing process of the bottles (and the hoops) is divided into great stages
presented on diagram 1 :
o Two spinning lines (operation consisting in obtaining the cylindrical body of the
bottle by extrusion of an aluminium billet), the heat spinning and the cold
spinning, converge towards a shrinking process (machines LB1 and LB2 ; this
operation consists in giving an conical shape to the head of the bottle) which is
the first phase of a common route (constituted of several operations) going up
to a "virtual" stop point called the "U" stock.
o Downstream from the «U» stock is the process of inspection and completion
which three segments according to the products : "Export" range with Mines
inspection (a certified organization based in Belgium must come to check the
bottles), short circuit and long circuit.
The two spinning lines are rather independent, the only common resource being the
scouring station CD1 (this installation intervenes at two different places on the hot
spinning route, at one place on the cold spinning route, and once before the «U»
stock).
The cold spinning line, recent investment intended to gradually supplant the hot
spinning one for the common products, has a short route due to an automated press
(robot) ; its over capacity allows to deliver bodies very quickly in front of the shrinking
machines. The hot spinning line has a longer route : Several successive presses, one
or two stages of scouring, annealing (in batch furnaces) and machining for certain
products. The hot spinning presses are also over capacitive.
The common route is a sequence of operations : Shrinking, heat treatment,
annealing (on other furnaces), machining (more or less complex according to the
products), scouring.
The quality check process begins downstream the «U» stock on machines LC1, LC2
and MM5 for mechanical testing (the choice of the machine is a function of the size of
the bottles). These machines are the slowest in the plant (in terms of number of
treated bottles per hour). The products follow then several circuits checking and
completion : Inspection or not, painting or not, ... The diversity of the completions and
the multiplication of the packaging ("it seems that the commercial people are happy
to accept any crazy specification") are creating many difficulties and loss of
productivity mainly in the "long route" segment, that which is more and more
appraisal by the customers.
The manufacture of the hoops (parts assembled on the bottles at the machining
stage upstream of the «U» stock) is realized through a specific route using
independent resources. Paradoxically, although stock is important, hoops shortages
are a recurring problem.
The bottles packaging is a tricky operation. It requires accessories each time very
specific although not very expensive ; these components supply is often on the
critical path and by the way stops the delivery which should be then expedited (if the
required manpower is available at that moment !).
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Finally as the second diagram shows it, the products often change “hands” during
manufacturing.
At TNH, the technical culture is strong and the skills are placed on a hierarchical
basis ; in particular, as it is often the case in this type of environment, the men of the
"hot processes" are regarded as the "lords".
To force the feature, following the first visit of the plant, one keeps in mind the image
of a non-orchestrated ballet of forklifts drivers operating in a disordered and
encumbered environment.
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Key figures of production and control
TNH manufactures 350 000 bottles per year with a flow of 12 tons per day. The plant
works 5 days per week (in 3x8), 250 days per year. The «U» stock which is not a true
physical stock (the bottles are stored at several places in the plant) is 110 tons.
Upstream the «U» stock, the work in process is about 240 tons and downstream
around 115 tons (measurement of end of month) to which it should be added the 45
tons of finished products waiting for delivery. The manufacturing lead-time from the
beginning of the spinning to the shipping to customers is between 7 and 8 weeks.
The average value of products in stock is around 1 000 € per ton.
Two manufacturing stages are scheduled independently and in a detailed way : The
spinning processes (the sequence for the first stage) and the mechanical tests (in
fact, the first operation of quality check on LC1, LC2 and MM5).
The due date for the customers is calculated regarding the load of these quality
check machines.
But, due to the burdened process of due date evaluation, it takes more than three
days between the moment where the customer is requesting a commitment up to the
moment where he confirms his order ; this is far to be satisfactory both for the
customer and for the marketing people.
Work orders, when joining the «U» stock, are often incomplete. Indeed on the
spinning mills it happens that the dies are “unloaded" (tools are degraded and must
be readjusted before being able to be used again). The rate of unloading is 15%,
which locates TNH in the average of the profession. On the other hand, it is
necessary to count between three days and one week to get the readjusted dies (due
to the queue in the tools shop which is in charge of the setting in conformity as well
as the maintenance of all the dies of the plant).
In order to compensate hazards and quality problems, thus to avoid the risk of having
incomplete production lots, the planning department took the habit of "over
launching" (increase of the lot sizes) what despite everything does not regulate all the
situations, far from there.
Increase of diversity results in needs in increasingly small quantities multiplying the
number of set-ups. On its side, the growth of the options induces a multiplication of
the number of accessories and component generating shortages and delays.
The planning activity is thus getting more and more complex (taking into account of
the simultaneous availability of the components, of the tools, optimization of the
sequences on the presses, shortages management, …), takes much time and finally
does not satisfy the producers who change the schedules each one on their side.
Finally, in order to be able to deliver, it is necessary to prepare invoices, to gather
quality documents (traceability, mechanical testing results, inspection reports, …) and
to organize the shipment. Many administrative tasks which take time and result with a
delivery in process (stock of finished products waiting for shipment) of several days !
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Fortunately, the raw materials supply (metal) does not create particular problems with
only two alloys, coming from reliable and over capacitive suppliers working in
partnership : An annual contract with monthly requests guarantees prices, volumes
and due dates.
The persons in charge for scheduling and manufacturing complain regularly about
the lack about commercial forecasts in particular to organize the completion teams
and to avoid, like it is too often the case currently, juggling between overtime and
activity reduction from one week to the other.