Steve True, Finance Director Sapa Profiles UK 7 th November 2006.
-
Upload
cole-myers -
Category
Documents
-
view
214 -
download
1
Transcript of Steve True, Finance Director Sapa Profiles UK 7 th November 2006.
Steve True, Finance Director Sapa Profiles UK 7th November 2006
Todays Agenda
Sapa Company & Group background
UK Aluminium Extrusion Market
Movex Requirement & Implementation
Senior Management meet pVelocity
Sapa Customer Case Study
Future Plans with pVelocity MPITM
Sapa Profiles Limited – Who we are
Sapa AB - Aluminium Manufacturing Group
• 27 companies operating in 15 countries
• Collective turnover of c£1 Billion
• 8,200 employees
Sapa Profiles Ltd - Major supplier of Aluminium extrusions in the UK with T/O of £80 Million, employing 350 people• 2 manufacturing sites (Derbyshire/Gloucestershire)
• 4 extrusion presses (+30,000 tonnes per annum)
• 850 customers (building & construction, transport, engineering)
• One raw material, 20,000 different products!
Movex Implementation
In 2000 Sapa Ltd and Indalex Ltd merged to become Sapa Profiles Ltd
Movex project commenced in 2001 and implemented in 2003
Implementation difficulties:-– Movex used as a vehicle to ‘merge’ the businesses
– Differing bespoke legacy systems, data migration
– Extrusion ‘not the norm’, some heavy modifications
– Reporting – lack of costing/profitability analysis
UK Extrusion Market
Approx 220,000 tonnes per annum, 2% growth
UK market traditionally supplied by UK extruders, but no longer the case– 5 years ago import penetration 15%
– Now over 50%, leading to over capacity in UK
– UK extruders (big and small) have suffered through volume losses and selling price
05
101520253035404550
Mar
ket s
hare
, %
Alcoa
Hydro
Sapa
Impo
rts
Oth
ers
Estimated total market size: £500 M
Differentiated service offering, based on the value of local supply, is now key to Sapa’s success in the UK. But instant profitability analysis is also critical, particularly with the need for a changing mix of customers
Our challenge:Improve Margins While Protecting Volume
Value Generating Opportunities
Manufacturing
Product
Contract Terms
Services
Channel
Bra
nd
Customer Buying Behavior
Service Oriented
Price Sensitive
Mar
ket
Cost to Serve
Profit
Balance
Senior Management meet pVelocity
pVelocity asked Sapa Management who is Best / Worst customer?…..resulted in completely different views!
pVelocity took sample data and demonstrated profit mining capabilities – Manufacturing Profit Intelligence TM
– Provides the necessary intelligence about customers, products, and processes
– Enables decision makers to easily identify, analyse, and act on the relevant drivers of profitability
– Bridges the gap between production and financial systems
New KPI’s based on ‘profit velocity’ introduced Based on the success of the UK pilot pVelocity has been chosen by
Sapa Group as the preferred profitability software tool for extrusion companies
Manufacturing Profit Intelligence™
Manufacturing Profit Intelligence™ (MPI™)
– Bridge between production and financial systems
– Identify, Analyse, and Act on drivers of profitability:
– Customers
– Products
– Processes
Customer Segmentation based on Profitability
Strategies to:
Protect
^^
Grow
^^
Improve
Opportunities for
Improvement
High ValueCustomers
Proportion of Total Contribution
Proportion of Total Volume
Tonnage
Contribution
Number of Customers
Contribution per Press Hour
Value Proposition
• Identify poorly performing products
• Adjust batch sizes / price / process inefficiencies
• Allocate capacity to more efficient products
• Improve service level agreements
Low ProfitabilityNominal ProfitabilityHigh ProfitabilityCurrentCurrent
Low Profitability
Nominal ProfitabilityHigh ProfitabilityGoalGoal
Continuous Process
Product Portfolio / Capacity Utilisation
Sapa Customer Case Study
In January 2006 a major customer (15%) threatened to move to cheaper offshore supply
In response Sapa Profiles Ltd created a recovery plan 5 main targets:-
– Reduced price through economic batch sizes
– Eliminate small orders placed (other than samples)
– Reduce the frequency of orders using the same die (tool) within the same week
– Reduce the number of order lines placed by 30% (admin saving)
– Smooth daily ordering patterns to assist planning of presses and improve delivery performance
But, to achieve the plan and increase profit!
Plan implemented April 2006, results
5 main targets:-– Reduced price through economic batch sizes
– Eliminate small orders placed (other than samples)
– Reduce the frequency of orders using the same die (tool) within the same week
– Reduce the number of order lines placed by 30% (admin saving)
– Smooth daily ordering patterns to assist planning of presses and improve delivery performance
Price reduction for 1 ton lot sizes
Price premium if <250kg
Reduced by 1,000 order lines per qtr (35%)
Reduced by 75% for top runners
Improved capacity utilisation & delivery performance
Sapa Customer Case Study
Customer has not only stayed with Sapa Profiles but has increased our share of their business….
Future Plans with pVelocity MPITM
Initiate continuous PIPs (Profit Improvement Programmes) utilising pVelocity ‘profit mining’ capabilities
Roll out pVelocity to Sapa extrusion companies world wide (15 plants)
– All Profiles companies within Sapa Group will implement to a common, but adaptable standard (Framework)
Improved Sapa Group benchmarking opportunities through standardised KPI’s & software
….Visit the pVelocity stand for your interactive CD, containing various profit related white papers
Thank you.