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21 PROFIT Secrets for an Aero Component Manufacturing Unit

Posted in Aerospace

Every successful business has a recipe for success. Recipes are zealously guarded and business secrets are rarely revealed.

How many secrets or recipe for success does your business have?

Let us look at the secrets of various successful business ventures.

Pulla Reddy Sweets which started off in the small town of Kurnool, in erstwhile Andhra Pradesh is today a success story. The core secret of Pulla Reddy was and is full ghee sweets, using high quality raw material. Of course, there are other strengths, such as cleanliness and hygiene. But, the core one is the 100% ghee sweets.

At the other end of the spectrum, let us look at Microsoft Windows. The core secret is user interface, and modular technology in which they let many other companies which made hardware and drivers install their products on the OS using APIs.

Let us look at Toyota. The Toyota car build is one of the best in the business for the price you pay. Close tolerances which are generally wide in auto industry, are maintained very narrow at Toyota. That is the reason the car is very steady while in drive.

Let us now look at a manufacturing related industry. Measuring equipment are a critical part in any industrial equipment. If you have driven or travelled in a car of about 35 years old you will have seen an panel shown below.

The makers of Yenkay, have focussed on measuring equipment over the years and have been successful in growing year on year. Their core competency and secret recipe is single minded focus on design and manufacture of reliable measuring and calibration equipment including auto instrument panel. Over the years, their expertise is very deep and competitors have to come with disruptive technologies to compete.

Secrets are nothing but core competencies which competitors find it hard to break through and capture a share of the business pie.

An Aero Component Manufacturing Unit can be run profitably by adopting the following secret recipes. To build and integrate each of the below is an exciting exercise in itself.

Each one of the below principles and secrets leads to profit maximisation by increasing order value and size and also cut costs. Accompanying these, will be immense indirect and hidden contribution such as boosting of morale, providing high job quality, career enhancement, job security and importantly reducing operational costs.

Most importantly, core competencies built based on these 21 secrets will lead to a dominant position in the aero component industry and attract world wide business.

Let us first list all of them and subsequently discuss each one of them.

  • Growth Principle Secret
  • Controllers secret
  • Machine tool maintenance secret
  • Outstanding management secret [from customers]
  • NC program development and programming secret
  • Finished component shipping secret
  • RFQ quote secret
  • Employee retention secret
  • Project management secret
  • Time management secret [busy cities]
  • Machine tool selection secret
  • Problem silence secret
  • Outsourcing management secrets
  • The reducing role of fixtures secret
  • The afternoon lunch secret
  • Employee machining secrets
  • Small machine profitability secrets
  • Split production target secret
  • Syncing training and production secret
  • Out of RFQ orders secret
  • Component analysis – first principle secret

Growth Principle

This is the topmost secret of the stack of secrets. How should the company grow? Meaning, what are the current projects, which customers to be specifically targeted, which type of products to be targeted for manufacture, what are the specs of the machines to buy to secure the future orders, all these form the growth principle.

To implement this principle, market intelligence is a key requirement.

Does anyone which big companies are capturing major projects?

How do you locate these big companies and major projects is a skill by itself.

Controllers Secret

Selection of controllers will determine how efficiently the machines in the factory are utilised. Most aero component manufacturing companies do not realise the immense intangible benefits of selection and standardisation of controllers.

A proper selection of controllers and retrofitting the existing ones will ensure thousands of dollars are saved in time and expenses.

Machine tool Maintenance Secret

A critical requirement in 3 shift production setup is the upkeep of machines on a regular basis and overhaul on a periodic basis.

The catch is most retrofitting service companies do not offer this service on a reliable and affordable basis. A work around for this is available, which ensures machines keep chugging along and there is no downtime.

Outstandings Secret

Aero component customers device various ways to delay payments and have a bagful of tricks to delay payments as much as possible.

The plant in charge has to identify the customers and find ways to dissuade them to adopt this practise with the company.

The plant in charge has multiple options to ensure customers do not resort to delaying tactics to get monetary benefit for themselves.

NC Program Programming Secret

Capable NC programmers are difficult to get and more difficult to retain. They are cerebral people, and without a peaceful, competitive atmosphere they will not be able to create innovative NC programs.

The secret here is how to ensure that they are retained and at the same time strategy is evolved to minimise risk even if one of them leaves.

Finished Component Shipping Secret

Many of the defence orders consist of components which need to be dispatched with care and proper packaging. Otherwise, rework and reduction in profit margin or many a times slipping into loss is a possibility.

Workarounds which experienced tool room engineers can provide have to be adopted to ensure components are consistent in size through the delivery cycle. Payments have to be collected with regard to such components on shipment, and measures have to be taken to advise the customers on how to maintain the size and integrity of the components.

RFQ Quote Secret

RFQ’s are a great source for Market Intelligence. They are the gateway to understand the projects going on in the aerospace and defence world. A thorough monitoring of the RFQ’s continuously and logging the observations is in itself a goldmine and leads to a superior market intelligence knowledge base.

RFQ’s are also a base document to engage with customers.

For every line item in a RFQ, opportunities are available to increase the profit margin. It requires patience and an interest to increase profits for the company, and a smart approach to discern the opportunities.

Many aero component manufacturers underquote for an RFQ and later when the order is issued pass the order because of unforeseen manufacturing requirements at the time of quote. So, stick to the original quote and engage with the customer to educate them on the complexity of the line item and your solution for the same.

Employee Retention Secret

I have repeated this many a times. And, let me repeat it. Every employee has become aspirational. If a company or a business has to succeed, it needs two things. One, growth and retention of employees.

The secret here is to meet the aspirational needs of employees.

Project Management Secret

There are many mini secrets under the project management. The key point here is that a project manager has to be an engineer in full and a little of a manager.

Time Management Secret [busy cities]

Most companies, particularly foreign companies have addressed this issue.

Machine Tool Selection Secret

This will be up there among the top secrets of my favorite aero component manufacturing company. If a company has the right combination of machine tools, it will be similar to going to a cricket match with a good opening pair, a solid one down, a good wicketkeeper batsman, a good set of fast bowlers and a good set of spinners.

If you pan across all aero manufacturing units in Bengaluru, very few have the right combination of machines to bag a wide range of orders.

Those who have the right set of machines are doing well even during corona times.

Problem Silence Secret

Handling today’s employees is not that easy. Employee management has become an HR nightmare. To be fair to them, HR personnel are always under pressure to control, and unknowingly go to the extremes.

In this background, many employees resort to the idea of hiding problems and letting it drag on resulting in continuous rework, and other problems.

The shop management has to have the innate management skill to judge the truth from the chaff and ensure work progresses smoothly.

The secret here is to win over employee loyalty. And, as the shop floor workers are not highly educated – one needs to have an empathetic approach – therein lies the secret – not everyone can do it.

Outsourcing Management Secrets

Outsourcing is a good thing and very active in Bengaluru and Pune two aero hotspots in India. At the same time, it is a very complicated as components have to be shipped, get work done, do a quality check, received back.

There are a host of opportunities here to reduce stock and save costs.

The Diminishing Role of Fixtures Secret

Fixtures are a great innovation but over the last many years technology has moved to eliminate the role of fixtures, reducing the role of the shop floor executives, and increased the role of software.

Accordingly, machines have evolved to reduce the necessity of fixtures.

This has resulted in reduced human intervention, lesser number of stages, and more complex manufacturing possibilities reducing the need for SPMs.

The Afternoon Lunch Secret

Considering the quality of food available commercially today, in cities like Bengaluru, it will be a good idea to provide food to employees.

There is a simple way to overcome this seemingly challenging task.

Machining Secret

The cycle of manufacturing is lengthy and at every step there are secrets which are individual specific and machine specific.

Right from spindle speed of the machine tool, and depth of cut, there many data points where the individual can contribute to getting the production targets achieved. Cutting tools available in the shop floor, work holding devices which are good and suitable for a particular job, cutting tool liquids, fixtures which are in stock, nc programs already done, practically at every step there are cost saving and time saving measures.

Small Machine Profitability Secrets

Over the last 15-20 yrs there has been a massive change in how the machine tools have been manufactured. While CNC machines have increased their capabilities, which are disrupting the existing shops, there are machine tool manufacturers who have quietly upgraded their NC machines with near CNC capabilities.

Most plant in charges and stakeholders miss the opportunities which lie at the bottom of the machining pyramid.

This is a secret which will be on the top of my list of secrets to implement as NC machines can take the load of manufacturing regular components and free the more expensive CNC machines for complex components. The fact that such machines cost less than one tenth the cost of CNC machines should prompt all to put this secret among the top ones to implement.

Split Production Target Secret

Manufacturing jobs are tiring and virtually impossible for one to be highly motivated through the entire month.

Most aero component manufacturing company plant in charge have no clue on how to handle this challenge. Implementing this secret, solves many of the problems of work scheduling.

Syncing Training and Production Secret

Implementing the split production targets will also allow us to implement the training programs at ease without disrupting the production goals.

This secret is linked to the previous one.

Out of RFQ Orders Secret

Many companies do not rely on only RFQ’s for orders. It is very important to build alternate channels of business. How do you do this? The answer is very straightforward and very obvious.

Component Analysis Secret

Most important for rapid growth of the aero component manufacturing unit.

A reliable component analysis team is a must for today’s aero component unit.

The secret here is to take decisions on the first principle basis and you are on your way.

Over and above all this the fundamental secret:

The process secret.

A well laid out process will ensure all the other secrets can be implemented and return is maximum.

Let us tabulate the 21 secrets and their impact on costs and profits.

Core competencies are built on trust and rewards. They are foundation stone for a profit making aero component manufacturing unit.

The above secrets will bring in such a branding reputation for your aero component unit in aero component manufacturing industry.

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