"Why Contract Manufacturing"
Contract manufacturing what is it? Is it just more buzz word terminology developed by a sales and marketing department? The short answer… no! We at Keltech have been supplying contract manufacturing solutions for over 10 years now and have first-hand experience of how a contract manufacturing supply relationship can produce significant competitive advantage for our customers.
Firstly Keltech “who are we?”
Keltech founded in 1987 by current Managing Director Ray Breen began from humble beginnings but quickly became a synonyms name within the sub contract sheet metal arena supplying to some of the largest OEM’s in Ireland and the UK.
Growth continued throughout the 90’s and 00’s as reputation grew based on our extensive machine profile at our 90,000 Sq ft plant and highly regarded reputation of suppliers of top quality product.
A customer focused approach has firmly been ingrained in the Keltech DNA since our inception. That trait has been the corner stone of our success. Keltech rather than resting on our laurels reviewed the then current successful business model.
All customers were met on an individual basis and “pain diagnostics” carried out with each. The results were then collated by Keltech and interestingly some common trends became apparent:
- Most if not all wanted to increase their machine output
- Procurement teams spent the majority of their time managing complex BOM’s related to the final build of their respective machinery, in most cases Keltech were just one piece of this complex web
- Stocking of ancillary items was becoming a major area of focus within their respective organisations, the procurement team were coming under increasing pressure to reduce stock holdings to free up space and finances.
- Sub assembly cells were consuming valuable real estate at the OEM’s facility not to mention the cost of training staff in these non-core activities
Be the Experts
Keltech now had the raw data; the gauntlet had been thrown down so to speak. Like in the past we set about not just meeting customer expectation but exceeding it. Question: do you believe a company that portrays themselves as “all singing all dancing” can be “everything to everyone”? We don’t…
Keltech chose the focused approach. We identified with 4 main product areas where we already had a built up significant level of expertise and manufacturing knowledge:
§ Acoustic Enclosures
§ Tanks (Fuel, Hydraulic, Lube, Header, etc)
§ Electronic Enclosures
§ Overhead Guards and Integrated Cabins
On these products we had over 20 years’ experience in some cases of supplying top quality fabricated and painted parts to global OEM’s. Working from this solid base and considering the current needs identified with our customer base we set about realigning our strategy. The “Keltech Contract Manufacturing” concept was born.
How Contract Manufacturing works
Instead of Keltech supplying a piece part to the OEM to be used in the final assembly of the machine Keltech would now supply the part!
Step 1: Keltech forged strong relationships with all members of the sub supply chain that would now become our remit
Step 2: Keltech modified our facility for the final assembly of our 4 main products
Step 3: Keltech invested heavily in the training of our people related to our new scope of supply.
Soon after Keltech on acoustic enclosures began to procure and fit all acoustic foam, locks, hinges, wiring & e-stops, silencer etc. On tanks Keltech began to procure and fit all sight levels gauges, filters, manifolds, etc. On electronic enclosures Keltech began to procure, fit and test all wiring and control units. On overhead guards and cabins Keltech began to fit all wipers, glass, locks, hinges, air con units’ etc.
Keltech were now supplying product to customers which was plug and play scope that could be fitted directly on the final assembly line at the OEM’s facility.
- OEM Machine output was increased as concentration was firmly now placed on final assembly
- The procurement team could direct their time to more value add activities as their order associated to the product became a very manageable 1 line item on a fixed lead time as Keltech took full control of the related sub BOM
- The need for storage space for ancillary items was reduced as Keltech now supplied integrated product that could be held line side ready for direct fit
- The need for sub assembly cells at the OEM’s plant was removed and the space utilised as further final assembly area aiding in again greater machine output
Contract Manufacturing continues to develop
Since the inauguration of Contract Manufacturing at Keltech our adaptation of the strategy continues to develop as we look to exceed customer expectation ongoing. Customers now not only experience the above benefits but can also take advantage of our large pool of expertise and knowledge related to their product whether that is: ensuring optimum internal tank cleanliness levels, or achieving the highest of sound attenuation standards through our acoustic enclosures for example.
Interested in finding out more or enjoyed reading this article? Feel free to drop me a line on Seamus.Lawlor@keltech.ie or on +353 864681333
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