When pump manufacturer Chempump documented and quantified what it already instinctively knew through a consultant-facilitated Kaizen event, it was clear that something had to change. The event provided management with databased confirmation that its quoting and application engineering processes were inefficient and error-prone. As part of the Kaizen event, the company identified the source of the problems and then sought a solution.
Subsequent analysis by project team members showed that visibility of quoting data and activity was extremely low, due to the lack of a central repository and easy desktop access for quote information. Instead, quote information was spread across multiple spreadsheets in both hard copy and network-based filing systems, requiring manual retrieval processes that rendered the data difficult and time consuming to access and categorize.
Today, by applying lean thinking in conjunction with an innovative software solution, Chempump''s management team has gained full and instantaneous desktop visibility into its quotation activity, along with the ability to generate quotes quickly and accurately, in less time, and with fewer resources than previously required. In addition, the company has significantly reduced the number of steps in its quote generation and ordering processes and has streamlined processes for quote follow-up, reporting, and analysis. The "secret ingredient" in Chempump''s front-end transformation? BigMachines'' LFE (Lean Front-End) Solution.
Complex Products Mean Complex Quoting
A division of Teikoku USA since March 2003, Chempump maintains two manufacturing and service facilities -- one near Philadelphia, PA and one in Belmont, WV. Teikoku USA, Inc of Houston, TX is the U.S. subsidiary of Teikoku Electric Manufacturing Company Ltd, Japan, a leader in canned motor pump manufacturing.
Chempump manufactures sealless, leakproof centrifugal and reciprocating metering pumps for industries and applications including chemical process, petrochemical, general industrial, OEM, nuclear power, water and wastewater treatment. The company''s products range from simple designs for OEM applications to highly engineered pumping systems used for high pressure and temperature services in critical nuclear, chemical, and petrochemical production processes.
Chempump''s quoting and application engineering problems were most apparent in quoting the company''s key product lines, NC and G series pumps. These technical pump products require hydraulic sizing based on total developed head, flow rate and fluid specific gravity, specific heat and viscosity. In addition, the configuration of these pumps requires selection of wetted materials within industry standard corrosion allowances, sealed electrical connections, flange classes for connections, and installation drawings.
Because of this inherent technical complexity, the pumps had been quoted using a lengthy, manual application engineering process. Engineers used several different software tools, including desktop spreadsheet programs, for configuring products and calculating quotation prices. As a result, quotation lead times were long, inefficient, and costly in terms of labor and resources, and presentations were inconsistent since there was no standardized tool and format. Management information was laborious and time consuming to compile, inconsistent in content, and dependent on a manually maintained quotation log.
"In seeking a solution, we wanted to automate and streamline our quoting processes to eliminate errors, speed up the quote-to-order cycle and improve customer service," says Chempump''s general manager Tom Conroy. "And, to be most effective, the solution we selected also had to support collaboration with a geographically dispersed sales channel and customer base. BigMachines'' user-defined, rules-based LFE delivered that and much more."
The Power of "Lean" Thinking and Technology Tools
BigMachines, a provider of software solutions for streamlining the sale of complex products, designed its web-enabled Lean Front-End Software to automate application engineering and quote generation, as well as internal reporting functions. The LFE is a powerful front-end tool that applies lean principles and innovative technology to optimize front-end sales and customer service, eliminate waste, and realign value streams to reduce costs and improve speed and customer service.
The LFE''s robust capabilities include: product catalog and selection guide, product configuration, customized quote and proposal generation with automatic follow-up, order management, flexible sales/quote and order reporting and analytics -- all accessible through a secure, customized web portal. For resource-constrained or challenged manufacturers in the midst of operational change, such as Chempump, BigMachines provides the LFE Standard Edition, delivered as a hosted on-demand application. This minimizes both implementation setup time and costs, and ongoing IT support requirements and costs. Chempump has been able to successfully use the LFE Standard Edition with minimal involvement of its IT staff.
Here''s how Chempump is harnessing the power of the LFE system to gain greater visibility and control of front-end quoting, application engineering, and order entry processes and thereby, enhance overall customer service:
Automated Application Engineering. Content, templates, and rules are integrated within a single tool to provide complete hydraulic sizing -- with customized motor tables and real-time curve generation. Sizing can be corrected for variable process conditions such as temperature, viscosity, specific gravity, and fluid type. The sizing process also calculates customized motor sizing, impeller trim, efficiency, power consumption, suction head required, and operating speed options. Also included is material selection, based on process conditions and corrosion allowances for housings, containment shells, rotors, impellers, and bearings. Other considerations include specific heat and viscosity calculations based on process conditions, and fluid flashpoint checks based on heat rise and fluid pressure inside the canned motor housing.
Automated Quote Generation. The quote generation tool incorporates Chempump''s CRM data with installation drawings and templates, hydraulic curves, and maintenance manuals to provide complete, fully customized quotes that encompass product configuration, configured lead times, customer-specific pricing, and configured pricing.
Quote Reporting, Analysis, and Management. In addition to automating quotes and application engineering, the LFE''s central repository generates reports on outstanding quotes, quote-conversion ratios, and quote volume reports with an ability to sort by product line, market, or sales territory, which Chempump utilizes to better manage its sales processes. Using the LFE, Chempump can easily track quote status and has automated quote follow-ups to maximize its quote conversion rates.
Forecasting. The LFE Reporting & Analysis capabilities were critical components required to support Chempump''s lean manufacturing and transactional initiatives. These tools have allowed Chempump to forecast demand for critical lead-time components by analyzing the materials that are being quoted and using historical quote conversion rates to forecast demand for long lead-time components. This has enabled Chempump to improve its forecasting, better manage inventory for key components, and reduce lead times for finished products.
Phased Implementation
To ensure a successful implementation and mitigate risk, Chempump elected to implement and roll out its LFE solution in three distinct phases.
- Phase I: LFE Optimization and Use by Application Engineers: Implementation of the software took five weeks for the initial setup for two product lines -- Chempump''s NC and G Series Pumps -- and the loading of 75,000 aftermarket parts. After setup, feedback was incorporated from internal users over a three-month period. Using this feedback, the LFE system was fine-tuned and is now being used successfully to generate 100% of quotes for the NC and G Series. In addition, Chempump''s product manager is able to maintain and update the site in real-time by changing product configuration, quotation workflow, and pricing rules.
- Phase II: LFE Roll-Out to Channel Partners: Building on the success of the internal implementation, Chempump began rolling out the LFE to its third-party representatives and distributors through an extranet. The implementation team initially worked with the company''s largest sales channel partner and garnered feedback from these efforts, which helped them to optimize the system. As a result, the quotation and ordering system is now being integrated with the sales channel partner''s inventory and order management system. This will allow orders to flow simultaneously into Chempump''s and the sales channel partner''s systems and result in time and cost savings through automated quoting in the field. When the pilot implementation is complete, the same strategy will be used throughout Chempump''s channel partner network.
- Phase III: LFE Roll-Out to End Users: Chempump is now prepared to involve engineers at strategic end-user customer sites to tailor the LFE website to suit their needs. Chempump is planning to roll out a program giving pilot users direct access to its LFE site to help them select and configure pumps that match their process design requirements. "Ultimately, these pilot programs can be used as a template for enabling additional large customers operating in Chempump''s core markets to use the LFE application to configure highly sophisticated pumps quickly that will meet their unique process requirements. This will save the end user time and money in purchasing process equipment, and Chempump management will have real-time data on user requirements. This data will feed the lean initiatives in place at Chempump that were designed to enable us to better serve our customers," says Conroy.
Early Results Point to Success
Conroy reports that application engineering and quote generation time has been reduced by 50-70% since Chempump implemented the LFE solution internally. "We are extremely gratified by the pilot results," he notes. "To realize such significant time and cost reductions, using fewer resources and far fewer process steps, is quite an achievement. With the LFE, we now rely on a standardized quoting tool, resulting in more accurate and consistent quotes, greater sales efficiency, and better follow-up to convert quotes to orders. In addition, the system''s reporting capabilities will help us drive productivity and forecasting even further.
"The front-end visibility Chempump has gained from implementation of BigMachines'' LFE resonates throughout the company''s operations and will undoubtedly have a positive impact on our bottom line over the long term. These are exactly the kinds of results we hoped to gain from utilizing the Kaizen event tool as part of our continuous improvement and lean enterprise initiatives," Conroy concludes.