Gas turbine research & production complex Zorya-Mashproekt is one of the global leaders in its field. Founded almost 70 years ago, the enterprise produces gas turbine engines, geared transmission mechanisms, as well as marine and industrial facilities for the energy and gas industry. The enterprise’s products are in demand worldwide.
Besides the design division, Zorya-Mashproekt includes the serial production division, R&D division, and pilot production.
Having assessed the global market trends, the management of the enterprise set the following tasks:
- Support production growth in volume and value terms;
- Cut the costs and increase workforce productivity.
Project objectives concerning production
The main objectives of the operational control of mass production were:
- Improving business processes when creating detailed coordinated production schedules for the enterprise’s divisions;
- Ensuring control over compliance with the production schedules;
- Improving production capacity control;
- Unifying production document flow.
Production automation at Zorya-Mashproekt took several stages. Initially, IT-Enterprise consultants and in-house specialists reengineered business processes so that once optimized, they could be automated using the integrated ERP system by IT-Enterprise. The enterprise’s management supported the idea that business processes automation would be pointless without preliminary analysis and reengineering.
Throughout the project, the following stages took place: analysis of current processes ("AS-IS" processes), developing "TO-BE" processes, coordination and approval of new business models, system configuration, trial, and commissioning.
Reengineering business processes allowed the enterprise to transition to electronic versions of original technical documentation.
Improving the divisions’ efficiency meant centralization of production planning by switching from paper MPSs (master production schedule) to electronic production tasks. It also involved integrating cost accounting with labor and payroll calculation included. Operational online production control was implemented as well.
To improve the efficiency of the enterprise's logistics processes, electronic document management was introduced. An electronic trading platform closely integrated with the plant's ERP system was used for procurement.
Improving production efficiency
Prior to the automation project, the enterprise used to plan production with logs of parts and materials needed. It was a specialized MRP (manufacturing resource planning) system that took into account the industry specifics but became obsolete. The plant's ACS (automated control system) division introduced automation into production planning based on these logs. The final solution developed was a separate local system for solving a specific planning problem. Subsequently, production planning based on this system was implemented as part of the enterprise’s integrated CIS (corporate information system).
The plant’s management set the goal to further increase production efficiency in 2008. The enterprise entered new markets and the issue of increasing production volumes by 20-30% became urgent. An additional requirement was headcount optimization: during project implementation the plant's staff was supposed to be downsized from 16,000 to 12,000 employees.
Thus, with 25% staff rightsizing the productivity growth target was 30%.
The primary task of the project team was to create an MPS with an infinite planning horizon. Since the production cycle for a number of products was 1,5 years, it was critical for the enterprise to have a planning tool that would not limit managers in the decision-making process. It was the production planning system by IT-Enterprise that became such a tool.
With the MPS issues solved, the specialists discovered new bottlenecks: the market demand for the plant's products was bigger than the enterprise’s capacity. Having analyzed the situation, managers detected resource shortage. To determine the kind of resources needed, whether it was production equipment or staff, they analyzed the throughput of manufacturing floors.
Once analyzed, the technological processes were updated according to the electronic process database. Then the enterprise’s process engineers linked together the equipment and the production processes in the system. Similar changes were applied to the production planning system and floor jobs.
Further analysis showed that reprocessing and other factors affecting the actual duration of the production cycle were not taken into account. As a result, new time standards as well as summary schedule standards for products, equipment, jobs and manufacturing floors were set.
Due to the work carried out, the enterprise was able to accurately plan for direct workers and equipment needed using MPS by analyzing shop floors workload as well as equipment utilization according to floors, equipment groups and time periods. This also allowed planning resource requirements in line with set tasks.
Optimizing procurement service
Prior to the automation process, the procurement service provided the shop floors with materials upon manually issued requests. The management of the enterprise decided to adopt electronic requests using the ERP system. Such requests can be issued only in accordance with electronic documents available in the system such as manufacturing bill of material, production standards and schedules.
Situation analysis revealed that prior to the ERP system up to 30% of goods and materials recognized as enterprise’s fixed costs were excessively distributed within divisions. Therefore, the enterprise reduced costs by 30% within the framework of fixed costs alone.
Having completed the automation project, the enterprise stopped using paper documents, which floor shops used to request production materials with. Now all materials are issued using only electronic documents available in the system and within the time specified by the production schedule.
Key project factors
- 30% bigger output
- 45% bigger turnover
- 30% cut in fixed costs
The large-scale project of integrated automation affected all plant's divisions. However, the focus was particularly on optimizing the plant's operations. Reengineering business processes halved the lead-time for some products.
Owing to the automation project, the enterprise achieved 30% bigger output with 25% rightsizing. Having optimized the plant’s operation with the ERP system, the enterprise also solved the following issues:
- Optimizing workload at the plant's work centers;
- Compliance with export contracts within the specified time frame;
- Shortening production cycle time;
- Lowering inventory levels and reducing work-in-progress.
The system coordinates the work of design engineers, process engineers, planning engineers and other staff carrying forward the production process from product development and production planning till material procurement, shop floor manufacturing and product delivery to the customer.