Case Study: Rolling Out Lean
Quincy Compressor (Bay Minette, AL), an Enpro Industries company, manufactures air compressors and vacuum pumps used in manufacturing plants, hospitals and climate control systems. Quincy’s three business units produce reciprocating and rotary screw air compressors, vacuum pumps, climate air control systems, integrated components (dryers, filters after-coolers and separators) and fluid power cylinders.
When tasked with living up to its quality reputation, Quincy Compressor further challenged itself to reach a higher level of success through a corporate-wide lean enterprise strategy called “Total Customer Value” (TCV). The TCV initiative included implementation of lean manufacturing and lean selling in its facilities to eliminate waste in business processes while delivering more value to customers. Quincy made improvements in its back-end manufacturing processes and recognized that significant opportunity still existed to reduce manual effort and costly errors in the front-end selling and services. The initiative drove Quincy to identify objectives for a more effective front-end process, specifically:
- Eliminate manual processes. Quincy’s existing quotation and order entry processes involved many redundant steps and labor-intensive manual processes that added lead time and complexity to the value chain. Consequently, given the complexity of Quincy’s products, the process to create quotes and orders was slow and error-ridden. Quincy needed a technology enabler that would meet the challenges of its lean front-end vision of reducing non-value-added activities, leveraging best practices and knowledge, and developing a “mistake-proof process” for product selection, configuration, pricing, quoting and ordering.
- Improve distributor self-sufficiency. Equally important was Quincy’s objective of making it easier for its distributor network to do business with them. With sales channels almost exclusively consisting of a global distribution network of more than 125 independent authorized distributors, Quincy Rotary Screw Compressor unit has a particularly strong commitment to its distribution network. However, distributors were using too many different tools to provide information to the end customers; the disparate tools and nonstandardized quote and proposal outputs used by different distributors often created confusion with customers and reduced the quote conversion rate.
Meeting the ChallengesThe company explored a variety of options to resolve these challenges. Quincy evaluated its corporate standard solution, but the needs of its complex product requirements could not be satisfactorily met by the solution. Another option was to purchase more of the separate point solutions to address each issue: selection and configuration for each product type, quote management, order entry for units, channel management, aftermarket parts ordering, call centers and analytics. However, based on previous experience with using various point solutions, Quincy determined that more piecemeal, error-prone point solutions would not achieve its objectives, but would in the end result in continued reliance on manual efforts to transfer information from one system to another, ever increasing maintenance costs and integration projects.
Quincy contemplated-yet ruled out-building a custom front-end in house. Its past experience has shown that in-house development may result in significant delays and stress already tight IT resources, taking Quincy away from its core competency of manufacturing air compressors.
The SolutionQuincy determined that the successful system needed to be a comprehensive, integrated solution for front-end sales and engineering processes: A single all-encompassing solution for spare parts and new equipment was necessary to standardize quote, proposal and order processes and to leverage cross-sell and up-sell opportunities. Moreover, the system needed to accommodate the existing ERP order entry system; the solution needed to be able to leverage Quincy’s prior investment in its Pansophic Resource Management System (PRMS) by allowing orders to flow seamlessly into PRMS as well as allowing all information in PRMS to be made available to the operator in real time. But most importantly, the system had to offer robust Web-based self-service capabilities for distributors and customers. A solution that intuitively guides distributors to select, configure, quote and order units online to dramatically reduce indirect costs while increasing distributors’ satisfaction.
Based on these solution criteria, BigMachines Inc. (Deerfield, IL) emerged as the choice over other solution options. “BigMachines showed us their ability to quickly understand and digitize our engineering and selling logic. We had thought it could possibly take years to build our business rules. But we realized it could be done in weeks or months time using BigMachines’ unique configuration rules engine, which compresses the amount of rules for easy set-up and maintenance,” adds Schumacher. “In addition, BigMachines’ team brought significant expertise in building configuration engines for engineered industrial products.”
Implementation in 120 DaysQuincy took a phased approach to implement the lean front-end at its Rotary Screw Compressor unit in Bay Minette. The configuration system required the loading of 18 product lines with tiers of product variations. Implementation of the software took 120 days for the initial setup. After setup, the system was fine-tuned during the next one to two months based on internal operator feedback. Once the internal implementation was successful, Quincy rolled out the Lean Front End (LFE) to its distributors.
One of the greatest challenges of initiatives like this can be slow technology adoption by manufacturer’s distributor channels. But for Quincy, the acceptance among distributors was strong from the beginning. Within the first nine months of deployment, more than 40 distributor organizations, many with multiple locations, were already using the Quincy Virtual Engineer system for the bulk of their quote and order activity. “We were pleased with the overall implementation process and very gratified by the results delivered by it,” adds Schumacher.
Roadmap to Total Customer ValueWith its Rotary Screw Compressors unit successfully live on LFE, Quincy is currently replicating its best practice by rolling out the lean front-end strategy to the remaining business units, Reciprocating Compressors and Ortman Fluid Power. Thus far, the results at the Rotary Screw Compressors unit have been strong. Quincy has already significantly increased order accuracy and has also seen reductions in the amount of time spent on special pricing requests. In addition, Quincy has been able to decrease response time to customer service inquiries, improving customer satisfaction in the field. Quincy currently has 100% of its rotary screw compressor orders flowing through the BigMachines LFE system, and plans include having all orders from each business unit follow suit.
Today Quincy Compressor has more timely and automated online relationships with its more than 125 distributors to help them easily identify, select, configure, quote and order Quincy products that meet customers’ specific needs. Quincy’s distributors now are able to accurately configure, place and manage their complex product orders, on average in about 10 minutes, whereas before deploying the BigMachines powered site, it would often take up to several hours of manual effort to assist customers with researching, ordering and managing relatively complex orders. Furthermore, Quincy’s lean front-end now provides its distributors the ability to present a single, unified face to customers with proposals that are professional and consistent in look and feel.
- The BigMachines LFE system has significantly increased Quincy’s order accuracy and reduced the amount of time spent on special pricing requests.
- Quincy’s distributors now are able to accurately configure, place and manage their complex product orders in a fraction of the time it took before the deployment of the BigMachines powered site.
- Quincy currently has 100% of its rotary screw compressor orders flowing through the BigMachines LFE system and plans include having all orders from each business unit follow suit.