Beyond the assembly
DeWarmte approached Scale-Up Supply to provide an interim Head of Supply for six months. Within just two weeks of onboarding, the interim manager provided by Scale-Up Supply was fully operational.
During the first month of the assignment at DeWarmte, the following issues were identified together with the management.
Weekly assembly output varied while input remained equal
Required assembly capacity unknown
Actual production costs are unknown
Inconsistent weekly output, despite constant input
Although the assembly process involved multiple steps, the MRP (Material Requirement Planning) system registered the production as one product and did not consider sub-assemblies. Additionally, a customer had to be assigned before completing the assembly, resulting in partially assembled heat pumps on the production floor, which could be improved.
Scale-Up Supply mapped the entire assembly process to address this, breaking it into distinct steps, each resulting in the creation of a sub-assembly. Each step's input, actions, and output have been registered. The sub-assemblies have then been integrated into the MRP system.
Since assembly workers adhered to fixed hours, while production was tied to customer orders (a pull strategy), output fluctuated based on installations. To streamline operations and balance the workload, we proposed shifting to a push strategy, assembling heat pumps for stock and allocating them to customers when ready to ship.
These changes enabled better workload management, as production became more efficient and devices were shipped to installers more quickly, resulting in more happy customers.
Unknown required assembly capacity
Initially, assembly time was estimated as a total figure without detailed tracking of individual tasks. This lack of data made it challenging to plan and assess workload accurately.
We introduced batch quantities and assigned start-up and assembly times for each (sub-)assembly. By tracking actual assembly time per batch and visualizing the data from the MRP system, we could easily share feedback with the assembly team.
In the early weeks (weeks 16 to 22), there were discrepancies between planned and actual work due to registration errors and wrong expectations. After refining the system and giving feedback, workload tracking became more consistent and aligned with expectations. This allowed DeWarmte to plan and assess workload per activity, improving overall consistency and reducing required capacity.
By having the average required workload requirement per (sub-) assembly, DeWarmte could plan and evaluate the workload per activity. A company can only improve consistency and lower the average capacity by assessing the actual workload with the planned workload.
Actual production costs are unknown
DeWarmte initially developed a business case to assess the viability of its heat pump business, but over time, variables like material costs and workload changed.
Product costs typically consist of two main direct components: material and labor. Scale-Up Supply updated the materials list and accounted for price changes, as the bill of materials could use an update.
Direct labor costs were calculated based on the average workload per (sub-)assembly multiplied by hourly labor costs.
Other improvements
After solving the three issues, more improvement possibilities opened up for DeWarmte. While ensuring the execution of the assembly, purchasing, and transportation activities, Scale-Up Supply has supported DeWarmte by improving further the management of the assembly activities, including:
Workshop layout
Assembly efficiency improvements
Improving track & trace of batches
