Investing in modern digital test equipment can improve quality, save time, cost and reputation. This study shows how applying capital expenditure to the right areas of any business can often improve quality, increase capacity, reduce cost and strengthen customer allegiance.
Observation: For over 40 years this company had manufactured and tested hydraulic goods for their valued blue-chip customers, using analogue indicators. Trained test engineers would read pressures from several analogue indicators and then write the results down on a test sheet. Over time the quality of the dial gauges deteriorated as did the eye sight of some of the more experienced test engineers and this combination would mean results were less reliable and testing would often be extended or repeated as re-work became more frequent.
Delayed testing caused customers to book overnight hotel accommodation at short notice. This re-work also put strain on production planning as unrelated projects were often delayed. Company leaders were reluctant to buy modern test equipment referring to prior austerity measures and the immediate impact on cashflow, yet delayed testing and re-work was also having a negative impact on cash flow as customer payments were often deferred.
After a detailed review of the real extended cost of historical testing, we convinced them to purchase modern digital test equipment that allowed customers to view live testing results transmitted via a USB installed in the new test rig. This increased accuracy and reliability, often saving the customer time and cost of attendance as tests could be witnessed online.
Improved reliability enhanced customer satisfaction and encouraged additional business as capacity increased and costs reduced. The cost of new digitised test stands was recovered quickly as re-work reduced significantly and payments were received in line with projections.
Summary: Regardless of company size, All spend should be monitored with appropriate delegation of authority in place, but if we allow leaders to express their opinions based on experience, they usually add value.