Articles from Auriga Magasinet No. 2, September 2006
Better economy via outsourcing and automation
Outsourcing and automation are on the agenda at Hardi’s production facilities on the island of Falster. Overheads must be reduced, and investments must be more targeted. The end result will be a viable company with 400 employees.
In the coming years, the economy of Hardi’s production facilities in Nr. Alslev will be improved through a combination of outsourcing and automation.
A total of 60 jobs will be cut, leaving a competitive and flexible company with 400 employees. The decision to trim the production unit is based on six months of comprehensive studies and analyses.
- The aim of the exercise is to tailor the company to withstand external pressures such as the high Danish pay levels, seasonal variations and variations in revenue from one year to the next with a view to better accommodating these fluctuations and pay levels, says factory manager Peter Glit.
Fully automatic tube laser is an example of the new technology in which Hardy has
already invested. The equipment makes slots and holes in tubes which are for
example later used i the large welded constructions.
Minimising overheads
Hardi’s costs are subject to the very high pay levels in Denmark. Moreover, sales are subject to considerable seasonal variations, resulting in considerable variation in production load over the year. Hardi is therefore looking to increase flexibility by minimising overheads and increasing its variable costs.
Hardi also sees fluctuations in total revenue from year to year due to variations in climatic conditions or agricultural policies around the world. This is another reason for wanting to reduce overheads.
Investing in fewer technologies
In terms of investments, it is not expedient for Hardi to continue to invest in all the technologies which the company uses today. Many of these technologies are standard technologies which are produced in many places around the world, and which are therefore suitable for outsourcing. On the other hand, it would be natural for Hardi to invest in a few specific technologies and to develop these further to real world-class and cutting-edge standards.
- A sensible company in Denmark must be automated and have a certain volume, says Peter Glit. - Volume can be achieved through automation, so that we can supply our subsidiaries, while at the same time remaining competitive.
Comprehensive study carried out
The factory in Nr. Alslev has six major production areas:
- Cylinders
- Membrane pumps
- Turned and milled items
- Automated welded items
- Non-automated welded items
- Non-automated punched items
All these have been carefully reviewed and analysed over the past six months.
- For each area we described two future scenarios based on the current situation: One scenario involved investments in the form of automation, improving work processes and changing routines, while the other alternative was outsourcing, Peter Glit explains about the process.
A very large number of employees have been involved in assessing the various options. With regard to outsourcing, quotes from more than 60 suppliers worldwide have been carefully assessed, and buyers and QA employees from Hardi have visited most of these companies.
Result
Peter Glit points to the production area for automated welded items as an important area which Hardi has, as a result of the study, elected to retain and in which Hardi will be investing further.
- Our welded constructions are large and difficult to transport. At the same time, they are the result of a process which you cannot buy in many other places, says the factory manager. - Automating the process is already well under way.
The parts which Hardi has decided to outsource are typically from the production areas involving non-automated welded and punched items, but also from turned and milled items, cylinders and pumps. These areas involve standard technology which is offered by many suppliers around the world who are all able to keep their competences and production facilities updated.
From 460 to 400 employees
As a consequence of the endeavours to improve the economy of the production facilities in Nr. Alslev, 60 jobs will be cut. Of these 45 jobs will disappear as a result of outsourcing in the course of one year, and most of the employees affected will be offered a job elsewhere in Hardi. As a result of the automation and streamlining of production, fifteen jobs will be phased out in step with investments being made in the course of the next two years, the first step being a new robot welding system which will be introduced in summer 2007.
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