Helander is a surface precision machining company based in Tewkesbury. It supports a wide range of customers in the aerospace, defence, nuclear and oil and gas sectors. Its core expertise is in actuation, control, propulsion, down-hole exploration, nuclear grade components and machining of hard metals from 3mm – 3000mm length.
The company joined Sharing in Growth in April 2017 to grow its aerospace market share and develop into a £22m turnover business.
The robust Sharing in Growth diagnostic highlighted weaknesses in the supply chain that required processes and procedures to improve performance and cost reduction and regain comprehensive control.
Focus for improvement
- Too many suppliers (over 400) for the size of business.
- Cost reduction target: £500k across all commodities by the end of the financial year.
- Analysis and control mechanisms.
- Supplier selection and nomination.
- Supplier delivery and quality performance measurements.
Implemented a robust supplier management system to support the pending AS9100 Rev D audits.
- Analysed the supplier spend to gain an understanding of the activity with all suppliers.
- Evaluated the risk by completing a Kraljic analysis (strategic segmentation).
- Divided the suppliers into commodity groupings.
- Created a matrix system to allocate the suppliers considering cost, lead time, complexity, uniqueness and quantity.
- Wrote a new procedure and created a working matrix for the office visual monitor.
- Applied the supplier classification to group suppliers. This enabled detailed analysis of spend reduction potential and supported decision making and plan execution.
- Created synthetic cost reduction scenarios and complete risk analysis with stakeholder group.
- Created activation plans to enable cost reduction activities.
- Created a cost reduction monitor that was verified by finance monthly to capture savings in support of the FY 2018 budget.
- Cost reduction projects launched saving £505k of spend in FY18.
- Supplier list reduced by 19%.
- Categorisation method developed and introduced.
- Quality Management System procedures created.
- Provided processes needed to support a successful AS9100 Rev D audit.
- Updated MRP system to new categorisation and evaluation criteria.
- Supplier performance review process and governance and frequency agreed.
- Supplier audit calendar created based on categorisation and risk.
- Key suppliers identified to develop a relationship structure (eg. Long Term Agreements).
- New framework highlights poor performing suppliers and promotes data driven action.
Said Bill Nash, managing director of Helander: “As our customer base has grown we have taken on new suppliers for key processes, been required to offer ‘cost down’ and generally needed to drive our improvement culture. The diagnostic clearly showed the improvement possibilities in our procurement processes and the procurement team with a huge effort from SiG has far exceeded expectation. Moreover, the SiG team has helped us transform from a tactical day-to-day department into a key strategic arm of the business, not only driving cost improvement but also allowing us to challenge for new business. A truly great result.”