Daily Archives: January 9, 2014

MAP-21? Or, More Accurately, RIP-21?

Remember when SI asked if your supply chain was compliant with MAP-21 last fall (on Oct 17 and Oct 18) and pointed out, in bold, section 32918 of the new Commercial Motor Vehicle Act Safety Enhancement Act: Subtitle 1 which states that each broker subject to the requirements of this section shall provide financial security of $75,000 for purposes of this subsection, regardless of the number of branch offices or sales agents of the broker? It did this because it knew this would be a big problem. However, even SI could not have predicted the damage this has caused.

As per a recent article over on Bulk Transporter, 9,800 freight transport brokerages [were] forced to close during December which represented over 46% of the independent broker market! 46%! On December 1, there were 21,080 independent brokers. Today, there are 12,996. So, even though a few new ones opened and a few existing ones eventually managed to raise the money required for the bond (and re-opened), the number of independent brokers is still down almost 40%!

SI agrees that this is indeed a crisis for the independent freight industry and for American consumers and manufacturers, as costs will rise for virtually all goods shipped within the United States. This requirement presents independent brokers with an unreasonable, and in many cases, insurmountable barrier and virtually guarantees that only multi-nationals will be able to participate in what should be a free logistics market. 10K might have been too low, but it should be up to the merchant to decide if the bond put up by the carrier is enough or not. If all you are shipping is low cost consumer purchased goods or packaging material, a 10K to 25K bond is more than enough. If you are shipping smartPhones, you probably want the carrier to put up a 100K bond. If the market really is free, small and mid-sized business should have a choice. But now they don’t.

aPriori, rationi viam ad sumptus! Caput II

In yesterday’s post, we re-introduced you to aPriori, the masters of Enterprise Product Costing that have been working their cost reduction magic for a full decade, taking out mountains of cost before the first part is produced! We noted that, even though it’s been over half a decade, the masters of costing have stayed the course and are still focussed 100% on taking cost out during the design and production phases, where up to 80% of the cost of a product is locked in. They do this through complex process models, built on CAD geometry, that they embed in sophisticated VPEs (Virtual Production Environments) which are populated with accurate cost data for each material, machine, and overhead factor that contributes to the total production cost.

Today we want to highlight the major improvements made in the last five years.

Significantly More Production Process Models!

When SI first reviewed aPriori, their out-of-the-box capabilities were limited to metal-based parts only, and there were only a few dozen process models. Now they can handle virtually any metal and plastics component you can think of and support over two hundred production process models out of the box. In addition, they recently signed some very big name electronics manufacturers and are adding electronics process models to their repertoire, and a few of these will likely be available out-of-the-box this year.

Significantly More Virtual Production Environments!

Now that they have close to 100 customers across the Americas and Europe, that produce their components across the Americas, Europe, Asia, and even Africa, they have up-to-date cost models and accurate VPEs for every major geography out-of-the-box. An engineer, or buyer, can get a rough idea of production cost for any supported production process in any geography before even engaging with a supplier, who can, of course, provide even more accurate cost data specific to their factory.

Support for Every Standard CAD File Format and Just About Every CAD System

The more customers you get, the more CAD systems and file formats you have to work with. At this point in their evolution, aPriori now supports every standard CAD file format and every major CAD system currently in use in the manufacturing sector.

Improved UI

It looks better, responds faster, and integrates the best of CAD and OLAP. The main screen has three sections: the component view, the cost model, and the process model. Each displays the high-level information, but in each the user can drill down as deep as she desires.

Full Excel Export Capability

Not only can the user copy and customize process models and VPEs, update / override any cost, and save any scenario – but they can also export the full scenario and underlying cost model to excel for analysis, review, and distribution.

Powerful Comparison Reports

The user can compare multiple process models, and associated costs, for a part side-by-side, and, if desired, export the full comparison report to Excel.

Roll-Ups and Automatic Process Model Generation and Solution

A user can create a component-based production should-cost model that rolls-up the production should-cost model for each part and the system will automatically cost the full component using the individual part geometries and identified (or default) production processes and, if desired, the lowest cost production process for the entire component.

The improvements save their customers millions every year. For example, the construction equipment manufacturer that saved over 500K annually just on frame and door production also saves over 200K annually on cage rear pivot production. The manufacturer thought that machined casting w/x-Ray was the best way to produce the part, but the aPriori solution was able to determine that a two-step process that first burned the part farm from plate and then machined holed the cavities could reduce the cost from 16.56 to 10.05 on 22K cage pivots per year.

And it’s not just construction equipment manufacturers that save. Thermo King, which produces temperature and climate control products for the transportation industry, analyzed 5.679M in annual spend across 294 sheet metal parts and quickly identified a potential savings of 900K (16%) and realized 400K of this in just 12 days! And a a 6.5B manufacturer of commercial trucks that analyzed 7.7M Euro in spend across 86 sheet metal parts was quickly able to identify that 17 of the 86 parts were “outliers” (and nowhere near expected costs) and through additional analysis was able to identify better production methods that led to a confirmed savings of 1.6M Euro (21%).

It definitely helps to know your expected production costs aPriori!