Helping Remote Operated Vehicle Manufacturer Gear Up Production

A small engineering company which designs and makes Remote Operated Vehicles (ROVs), or robots that can be sent into hazardous situations to deal with suspicious packages, needed help. The company has been in existence some 22 years. It has designed and made over 300 ROVs. Each robot was customised to the particular customer’s requirements. Initially, the company was a jobbing shop with few economies of scale and great diversity. This made the task of keeping accurate records of what had been supplied, and supporting product in the field, both difficult and costly.

The company had invested considerably into winning military orders that would fund the next generation of robots. Prototypes of the new models were built and the technology proven. But with no orders coming in for its existing model, economies had to be made. In 18 months the workforce shrank from over 20 to five people. There was minimal investment in plant and equipment, and maintaining business processes became more difficult and often they lapsed. Unfortunately, the military orders were placed elsewhere. The company was left with two models, no orders and no money. Good fortune, however, soon came in the form of an acquirer.

When they heard of the company's situation, the acquirer saw it as an ideal opportunity to plug a gap in their product portfolio. Working with Executives Online, this company retained Graeme Roberts to get the company back on its feet before handing over to someone who would run it permanently. Graeme was a skilled interim operations manager who had run and set up electronics production units and CNC machine shops in small companies as well as larger ones. Graeme's function was to get the company up on its feet before handing over to someone who would run it permanently.

First Impressions and Reality

Graeme's first two priorities were to establish a design baseline that enabled the two models to be built on a repeatable basis to a consistent quality, and to get the factory in a fit state to make the product. Staff with the right skills and attitude had to be recruited. Processes had to be put in place to allow them to work in a controlled and effective manner. All of this was in line with a business plan, which had to be drawn up, that laid out the level of investment that would have to be made and what return would be seen on this and when.

The second priority was completed quickly. This involved clearing out 22 years of accumulated history, which filled seven large skips. Suddenly, space appeared in the factory that gave the opportunity to organise the production areas. At the same time heating, security alarm and fire detection systems were installed.

The question of resources was addressed quickly to satisfy new orders. As part of the acquisition, it was decided that sales, marketing and finance would be handled by the acquirer at its headquarters. At Graeme's prompting, to reduce the load on the original small team of five, purchasing and the assembly and test of electronic sub-assemblies were quickly added to this list. Despite this, additional people were needed at the company.

Graeme identified the need for five off-assembly staff, a stores person, a CNC programmer/machinist and a contract QC inspector. Working with a local specialty recruiter, Graeme found six good individuals for the assembly and stores roles. They ranged in age from 22 to 62 and had an equally wide range of skills and experience. More importantly, they were enthusiastic and willing to use their knowledge. They wrote their own work instructions, organised their working areas, suggested how to improve the processes and the product design, and turned their hands to any task.

The QC inspector was deliberately employed on a contract basis. The company wanted to adopt a philosophy of "quality being built in not inspected in", and that responsibility for quality lay with the producers, either internal or external. Graeme recommended that as this would take some time to establish, a contract QC inspector was needed in the interim. Futhermore, the workload was one of feast and famine, and Graeme did not want to land the company with a "hire and fire" reputation but rather keep the permanent workforce numbers lean while supplementing them with contractors.

Returning to Graeme's first priority, if the company were to produce the ROVs to a consistent design and quality standard with spin-offs in higher reliability and easier customer support, it needed to have a set of drawings that were manufacturable and transferable between different manufacturers. When Graeme arrived on the scene this was not the case. He made contact with a local firm that provided drawing resource. This person was able to start straight away on the smaller robot. It soon became apparent that more resource was needed and a second person was recruited. Indeed, this model required about seven man-months of work.

A similar amount of work was needed on the other ROV. This was provided by a contractor and the design team at the new parent company. It was clear that the amount of work needed to produce the two models had been underestimated. However, the importance of good data was recognised. From it flows the Bills of Materials that allow parts to be bought, made and, importantly, costed. This enables the business to plan its workload, cashflow and investment, and allows the sales team to know what margins they have to work with.

Progress

So how did it go?

The short answer is quite well. The first order for the smaller robot was completed before the letters of credit expired. The customer's operators were successfully trained on site. Further orders followed.

The 40-year-old lathes and mills in the machining area were replaced with a modern lathe and mill. The electrics, lighting, workbenches and floor in the area were refurbished. The production team planned and laid out the work areas, wrote work instructions and developed test processes.

The QC inspector introduced a reject process, which resulted in a Material Review Board, that determined the corrective and preventative actions for defects. These were steps that would help secure ISO accreditation.

On the down side, use of the Management Information System at the acquirer proved difficult. Because of its location and security needs, the company could not use the broadband systems available. A compromise has been identified but it will take time to put into place. As a result, a contract Progress Chaser was recruited to plan the work manually.

There is also much work still to be done on the business processes. However, Graeme's successor is well experienced in such things. Graeme assisted in the recruitment of his replacement, who is now on board. Graeme specified the requirements of the job and the profile of the preferred candidate. The process was exhaustive, comprising several stages of interview, psychometric tests and the taking-up of references. This helped to take much of the subjectivity out of the appointment.

Conclusion

In the seven months of Graeme's assignment, The company has been transformed. Its order book has increased in value from A$500k to A$5m. There are 32 ROVs to be built this year instead of the 20 originally forecast. The number of staff, both permanent and contract, has increased from five to 22. More importantly, a capable, motivated and flexible team has been created, that want to make the operation successful. The factory and the equipment have been refurbished and major investment made by the company which acquired htem. Significant steps have been taken to put in place some of the processes needed to ensure that a reliable product is made to a consistent and high quality standard. Most importantly a set of drawings have been created as the foundation on which to go forward.