rittal

Rittal-CSM - The BoardRoom - For movers, shakers and decision makers Home Features Case Studies Columnists Press Releases Media Contact Archive Subscribe InterviewsFeaturesCase Studies Rittal-CSM : Safe and sound Published : September 2006 Rittal-CSM is the world’s top supplier of innovative enclosure and housing technologies. Martin Cunniff told Ruari McCallion about the company’s improvements in process, production and management systems After its traditional industries of mining, fishing and minerals went into steep decline in the 1970s and '80s, the south west of England placed its faith for renewal in tourism, yes, but also in high-tech electronics. For a while, the strategy bore fruit but the turn of the 21st century saw off quite a few companies in that sector, too. Rittal-CSM, based in Plymouth, is a system supplier for industrial enclosures, electronic packaging, system climate control, power distribution and pretty much everything a corporation would need for its servers and IT infrastructure. These cabinets are more than pieces of metal fabrication. “We manufacture enclosures from sheet metal to final installation-ready,” said Martin Cunniff, operations director. “The standard platform is two metres high, one metre deep and 600mm wide, designed to be both aesthetically pleasing and functional. Within the standard platform, uses and applications can be quite diverse, and can include big machine tools, switchgear and communications equipment: we customise our product, according to customer needs.” That customisation can range from quite complex to fairly straightforward. “When we provide a customised solution for, say, an HP server farm with 60 to 70 cabinets, the exterior is the first thing the visitor sees. It’s about projecting a good image.” The cabinets have fans built-in to the top, for cooling and dust protection, and they’re completely wired for the appropriate application so that they’re as close to plug-and-play as complex equipment can get. “We are making hundreds of parts for HP and it’s a bit like the Mini: when there’s a facelift on the car – or system, in our case – we offer another solution for them,” said Cunniff. “In the domestic IT range, a company may put in 10 racks to begin with and then update with another 10, a year later. Our customers want the cabinets to look the same from the outside, even if the internal layout is different.” The process by which the Rittal cabinets are made is a combination of classic metalworking and modern electronics. “The process route will take in CNC piercing, folding, spot welding, induction welding, MIG and TIG welding, powder coating, assembly and electrical installation,” he said. “We install the PDU (power distribution unit), which multiplies the server power, plus the fan trays and electrical locking system. Our customer can then slide the rack in, bolt it in place, connect the electronics and install the software.” Worldwide, the Rittal group has 19 production facilities, including seven in Germany; 60 international subsidiaries, more than 150 delivery centres and over 70 international agents. Over 10,000 standard products – which are mainly designed in Germany – are available immediately. However, the UK operation focuses on work for OEM customers, like HP, IBM and Dell, often with non-standard requirements. “The majority of the OEM design work is done here, in Plymouth,” said Cunniff. “We have a core team providing design and manufacturing and all those costs are controlled by us.” The Plymouth plant delivers to both the UK and overseas: it exports to Europe, predominantly, but also to the US and to Rittal’s global distribution hub in Germany. Rittal-CSM, the UK operation, is effectively the group’s centre of excellence for OEM business, representing over 50 per cent of its output. That focus is a two-edged sword: it’s excellent business, offering opportunities for added-value and customisation, but it ties the UK operation to the fortunes of the IT sector. It’s very cyclical, with spending dictated by quarterly reporting periods: each quarter starts slowly and then gets very busy and that raises its own challenges. Rittal-CSM is well placed geographically, being easily able to supply Europe, in particular – and that is a consideration, when it’s borne in mind that while in transport, cabinets are enclosures of fresh air. However, that won’t matter a jot if it isn’t making money. In order to survive and prosper, Rittal has to be agile, responsive and flexible, and that wasn’t the case when Cunniff arrived from the auto industry in 1999. “We had no goods-in structure: we had three external warehouses storing raw materials, so much WIP you couldn’t get down the gangway, and the line stopped every day because of lack of parts,” he said. The first step was to sort the logistics out, and that challenged some cherished assumptions. “We supply our racks on pallets, which are unique: they’re specially made for us with substantial foaming,” he said. “Each one costs about Ј60 to Ј70. We can (and did) get them cheaper from the US but the problem was, we had to buy a container-full each time. We experienced fluctuations in delivery and they didn’t work properly. Now, we get them built for us in Dorset and delivered as required. They’re more reliable, the delivery is more flexible and the overall cost is less, because we aren’t having to hold high levels of stock.” It’s not just the pallets that have been sorted out: stockpiles have been reduced, as has WIP and waste, and cycle and lead times have been cut substantially. “We’re adopting RPS the Rittal version of TPS – the Toyota Production System – as much as we can and it’s giving some really good results,” he said. “We’ve been working hard for six or seven years to change the overall philosophy of the site, away from the idea that lean has an end-game. It doesn’t. It’s continuous improvement.” Rittal-CSM’s improvement is work-in-progress but it has made substantial gains, which help to secure its future within the group, both nationally and internationally. “We have a broad product range, which helps to spread overheads. Yes, a particular product could be put somewhere else: our equipment is a bit more expensive than that produced in Germany but we’re a lot more flexible, with shorter lead times. Put all production of particular cabinets in eastern Europe, or anywhere, and it would have to carry the entire overhead for it. That isn’t so attractive.” Cunniff speaks highly of the local workforce – its dedication and willingness to adapt – and the overall manufacturing infrastructure is better than a casual glance would suggest, with shipbuilding in place and a history of high-tech. What is needed is a more modern approach. “The real push to improve came two years ago,” he said. “We were able to step up a gear because we’d got the basics in place and we had a good foundation to build on.” He pointed out that approximately two-thirds of costs were in raw materials and supplies and a smaller amount in labour. “There are big numbers in the supply chain but our strategy is to improve ourselves and then turn outwards.” MRP systems and ‘work-to’ lists helped to in gaining control of raw materials and WIP. “We’ve now progressed to a pull system, which works all the way to our tier one suppliers.” Goods arrive JIT and are delivered to line-side quickly, rather than disappearing into a huge warehouse. “We’ve used pull to flush everything out – inefficiencies in machinery, quality systems, and so on. We had to create a ‘big bang’ initially, which we did with improvement in our OEM systems, and then consolidate the gains across the factory.” Management has been restructured, with four layers, instead of eight. Production control systems, factory layout and the support structure have all been changed, with maintenance, for example, decentralised. “I believe that 5S, TPM and all the others are good tools and we use all of them to improve the final result,” said Cunniff. “We have a full-time TPM facilitator and we’ve worked on getting people to understand that it isn’t just about having a clean machine: it impacts throughout the business. We now have machinery availability in the mid- to high 90s; we’ve reduced our strategic stock areas, which has led to reduced WIP and that has led to shorter lead time to customers.” Flexibility being the watchword, Rittal-CSM hasn’t stopped buying machinery but it thinks twice before buying big. “I’d rather have 10 smaller machines that I can switch on when I need them and switch off when I don’t, than one big machine that has to be kept working.” The net total of the improvements is pretty impressive. Last year. The Plymouth site made a substantial profit – the numbers are confidential – which was a big turnaround from a severe situation in 2000 to 2001. “We improved efficiency by 15 per cent last year; this year, we expect 10 to 12 per cent,” he said. “We had raw material stocks of many millions in 2000; this year, it’s down to a third of its original value, including finished goods and WIP. Over the same period, we’ve reduced costs to our customers substantially.” The company is also picking the work it does better. “Our turnover has actually shrunk, by about 27 per cent,” said Cunniff, “but our profitability has risen substantially and is continuing to do so.” ? 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