Magellan Aerospace UK - EFACS delivering real business benefits

Customer Profile

Magellan has design and manufacturing operations in Bournemouth, Wrexham, Bristol and Biggleswade, employing over 800 staff.

The Challenge

Balancing load versus capacity, whilst ensuring consistency of on-time delivery.

The Solution

An adaptable ERP system capable of ensuring a tight fit with Magellan’s varied and changing business processes.

The Benefits

“For us EFACS is simply an essential part of how we do business now. The company has grown in terms of sales and profitability which EFACS must take some credit for as it is in operation on all of our sites and is consistently delivering what we require from an ERP solution.”

EFACS delivering real business benefits

Magellan Aerospace (UK) Limited is a leading design to manufacture supplier of aerospace structural components and assemblies. A wholly owned subsidiary of Magellan Aerospace Corporation, the £70m turnover company is a tier one supplier of products ranging from small intricate valves through to single one piece spars exceeding 18 metres in length, assembled and delivered to point of use. The company has steadily grown, at times by acquisition, which has led to design and manufacturing operations currently being split between sites in Bournemouth, Wrexham, Bristol and Biggleswade, that between them employ over 800 staff. At the heart of the expansion has been almost a decade of reliance on EFACS Enterprise Resource Planning (ERP) software from UK based Exel Computer Systems.

While manufacturing varies slightly between different sites, many of the core process steps remain the same. Take the main manufacturing base in Bournemouth for example which supplies primarily to Airbus in addition to other leading aerospace companies. Orders are received electronically and directly from a supplier portal, typically on a 2 week call off basis from forecasts which might extend up to 2 years. These are checked to see that order data remains between buffer stock and Master Production Schedule (MPS) capabilities, or as Eric Shelley, Business Information Systems Manager for Magellan puts it, “to ensure we keep a smooth drum beat of regular orders to help maximise the use of our capacity.”

This smoothness of flow extends not only to each of the production processes themselves – machining, treating, painting, assembly (where required) and dispatch – but also to the flow of orders between each process. However, this is complicated by the scale and variety of manufacturing that Magellan has to accommodate, as Shelley explains. “Just at this one plant, we might have as many as 3400 live works orders. The shortest may only take half an hour while the longest can involve up to 53 different operations and literally take months to complete.”

No wonder that Shelley identifies balancing load versus capacity as one of Magellan’s major business challenges as well as ensuring consistency of on-time delivery. Working in an international market also leaves the company having to deal with currency fluctuations which can affect everything from cost and availability of raw materials and labour, all of which can directly affect the final price of an order. Given the need to have smoothness of flow, it is also not a surprise that one of Magellan’s key challenges is extending this smoothness as far into its supply chain as possible. This is especially the case when dealing with suppliers thousands of miles away.

Scenarios which therefore are the hardest to deal with include the smooth introduction of new orders and responding to problems with machine resources and/or stock levels. Shelley again, “Because we look to keep a smooth drumbeat and making maximum use of our resources, introducing a new order can be highly complex in terms of not overloading our existing capacity. Introducing such an order without clear visibility of the impact this may have can have significant knock-on effects for our on-time delivery.” He continues, “This can be further compounded by problems which may arise with our capacity itself, especially unexpected machine failure. We need to be able to respond swiftly and smoothly to this.” Furthermore, given the scale of work at Magellan, it’s possible to lose track of an order that is a Work in Progress either because it’s scrapped or reworked without anything being updated. Either way, the customer still doesn’t get their order when they need it.

The journey with EFACS began almost a decade ago when it was first implemented in a Magellan site in Poole and also in Wrexham followed by other sites over the years including Bournemouth in 2004. Despite the length of time involved, there are those at Magellan who remember how things used to be done, pre EFACS. They speak of a largely manual system augmented by spreadsheets, white boards and paper which while effective after a fashion, could not deal effectively with the challenges the growing company faced.

Indeed, it was the ongoing growth and development of the Magellan group that necessitated the change to an integrated business management system that was powerful yet flexible enough to deal with Magellan’s manufacturing requirements. EFACS was selected over two other competitors due to its combination of functionality, scalability and value for money.

The fact that EFACS was authored and supported by a UK company was also important to Magellan in terms of providing consistent quality and on the ground service and support. Shelley also notes that the ease with which the system can be adapted using EFACSADAPT programming language was also a key consideration to ensure a tight fit with Magellan’s varied and changing business processes.

The first sites went successfully live in 1999 and now all of Magellan’s main UK sites are running EFACS with an Indian-based sister company due to go live in early 2009.

Shelley describes how the Bournemouth site now operates using EFACS and identifies some of the key benefits the company has achieved. “Orders are
loaded directly into EFACS from our key supplier portals which creates a 52 week MPS from which the smoothness of the drumbeat is assessed. With MRP being run nightly we know that our data is up to date and accurate which means we can confidently apply ‘what-if’ scenarios to the MPS to test the impact of any decisions or new orders before the confirmed works orders are generated and issued to the shop floor.” These are currently manually issued to the shop floor but trials are in place at Bournemouth to assess the suitability of pushing works orders directly out to terminals in the relevant cell. Once the order is finished, it is transferred to finished stock and subsequently despatched against the sales order.

In addition to complete traceability, a critical requirement for Magellan to ensure on-time delivery is the need to capture accurately the start time of each operation. Each process step of every works order is therefore entered into the system which allows EFACS to automatically compare actual production with projected/anticipated production. When a start time is later than expected, it is then immediately obvious that a problem has arisen and this can then be quickly identified with the appropriate steps taken.

Given the time since EFACS was first implemented, Shelley understandably describes its value to Magellan not in specific before/after comparisons but in wider business level terms. “For us EFACS is simply an essential part of how we do business now. The company has grown in terms of sales and profitability which EFACS must take some credit for as it is in operation on all of our sites and is consistently delivering what we require from a ERP solution.” Mike Battersby is a Customer Account Manager and he comments that one of the main benefits to him has been how easy EFACS was to learn and to use on a day to day basis. While acknowledging there was initial resistance to people learning to trust a computer system, he sees the consistent reliability and ease of use as a factor in overcoming this.

The ability of EFACS to generate ‘what if’ scenarios brings benefits outside the daily decision making of balancing the load on available resources. It has proven invaluable in helping Magellan identify where additional investment in resources may be beneficial to meet demand and is also helpful for assessing which orders are more profitable and least disruptive to the smooth running flow of the business. At a corporate level, the use of EFACS across the company means that group-wide information can also be easily collated and analysed. It is therefore no surprise that Magellan is investigating the benefits of upgrading to the latest version of EFACS across its growing number of sites. Shelley best sums it up when he echoes Battersby in saying, “We couldn’t do what we do now without EFACS.”