General Cable Franklin's plant brings several operations in-house, gaining control over cost and quality.
By Peter Alpern
| Outsourcing, for many companies, has allowed for costly, specialized processes to be shipped elsewhere and for higher-end manufactured materials to arrive at the receiving docks ready to go. But that convenience often comes at a prohibitive cost. In recent years, 2010 IndustryWeek Best Plants winner General Cable's plant in Franklin, Mass., has taken the reverse approach, by gradually insourcing many of its most intensive processes and materials to gain control over quality and reduce expenses. One such item is tape filler, which serves to separate one pair of wiring from another on the interior of a cable, ensuring that electrical performance isn't compromised. Until 2007, tape filler was outsourced, which cost the Franklin plant on average $29 per 1,000 feet. Those costs were multiplied over millions and millions of feet of cable, representing one of the key reasons General Cable's cost position was higher than several of its competitors. "We sat down and tried figuring out if we could do it in-house, utilizing what we already have in this plant," says Brian Skocypec, an engineer at Franklin who oversaw the project. "We did some number crunching and figured out what it would be just for the materials and realized it was phenomenally cheap." Using idle equipment, the Franklin team ran off several trial runs and found they could produce their own tape filler at a fraction of the cost they had been paying. Within a month, the plant was producing its own supply, while also supplying sister plants in the area. General Cable reduced its tape filler costs from $29 down to $12 within a year. "It accounted for a big chunk of the 30% cost reduction we had in all our category cables," says Skocypec. "Almost overnight we went from being almost overpriced in the market to being just under everyone else." The Franklin plant made a similar transition with its interlock line of aluminum-armored cables in 2006. For years, the aluminum processing had been outsourced to a supplier in Canada, but as demand for interlock peaked, so did lead-times. "We were offering it and obviously everyone else was going down the same road and the next thing you knew our supplier's lead times were extending because they couldn't meet them," says Skocypec. "There were also quality issues along the way. So we started doing the math and I don't think anybody else realized it, but at the time we were spending over $100,000 just on shipping costs to and back from Canada and our lead times were out to eight weeks." Instead, General Cable Franklin purchased cable armoring machinery and found a source for the raw aluminum strip. But that might have been the easy part. "It's a challenge because it's armoring," says Skocypec. "The guys on the floor went from not knowing anything about this to becoming armor experts in less than a month." Originally, General Cable wanted to give itself six months of experimenting with the equipment before supplying its own product. Instead it took 30 days. Lead times were essentially erased and Franklin saw a cost reduction of 20%. "We found that by supplying our own product, we could control the costs and the quality," says Skocypec. "It's made a tremendous difference." Click here to read more about 2010 IndustryWeek Best Plants winner General Cable Franklin Plant. Click here to learn more about the IndustryWeek Best Plants competition. |
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