Case Study: Leading Defense Manufacturer Drives Asset Reduction

Demand is driving many defense contractors to develop strategies to reduce their costs while cutting their program schedules and time to market. That’s why every company must make the best possible use of existing resources. This is the story of how one business is winning the asset reduction battle. . . with the support of The Sente Group, Inc.

The Challenge: Needed Asset Reduction

A corporate-wide assessment of capital assets uncovered a big problem: much more test equipment than anticipated in the customer’s engineering labs. A deeper dive brought the issue into sharper focus:

• Many separate, localized spreadsheets used to track test equipment in each of the labs.
• Nearly half the equipment was no longer supported by the OEM, putting a number of projects at risk.
• No standardized test equipment across the labs, decreasing the likelihood of equipment sharing.
• No standard method for scheduling over 30 test labs.
• Equipment utilization was an unacceptable 9%.
• No asset reduction process for effectively disposing of unused assets

Facing increasing demands for new solutions at lower costs, company leaders knew they needed to act immediately. Engineering productivity and capacity were on the line.

The Solution: Award-Winning Test Resource Management Capabilities

Sente performed a Blueprint-for-Action, a rigorous yet efficient process for applying our Scireo® software and test management insights to effect rapid change. Any changes would have to overcome engineers’ fears that efforts to more effectively manage their equipment would leave them with less than they needed to do their jobs. That’s why Sente’s approach incorporated:

• Equipment management tools tailored to fit the needs of the engineering labs
• A broad, enterprise-wide approach that encompasses people, processes, and infrastructure
• Identification and training of internal champions to accelerate the transformation effort
• Rigorous operational as well as financial metrics

The Results:  35% Asset Reduction

While the customer’s business was growing by 10% year over year, the solution delivered immediate and increasing results.

In the first year the following results were produced:

• Utilization nearly tripled, from 9% to 26%.
• Asset Reduction of 35%.
• Inventory of unsupported equipment dropped 50%.
• Calibration non-compliance reduced from 8% to 0.3%.
• Calibration demand was reduced over 25% and responsiveness improved 2X
• The engineering workforce increased by 10% to handle new projects—without needing new equipment.

TRM continues to deliver great results, year after year:
–– Overall utilization has exceeded 55%.
–– Inventory count is still down by 45%—even though the business has more than doubled.
–– All laboratories share standard processes and tools for scheduling capacity.