Household appliance manufacturer expands competitiveness with IT reform

Eliminating information silos

Airmate Electrical Co., Ltd. (Airmate) is a well-known small household appliance enterprise with 8,000 employees and 60 production lines of finished products, including electric fans, heaters, ventilators, humidifiers, air cleaners, electric pressure cookers, rice cookers, induction cookers, juice extractors and dust collectors.

With integrated, comprehensive production capacity and leading industrial design expertise, Airmate has become a globally renowned small household appliance enterprise with 95 percent of production handled in-house. With products sold in over 8,000 marketplaces in China and over 70 countries and regions, including Japan, Korea, Europe and the United States, this international, small household appliance brand supplier integrates design, development and production. Airmate, has maintained long-term cooperative relationships with prestigious international brands, including Toshiba, Sanyo, Samsung and Cyber. From 2001 to 2010, Airmate ranked among the top two domestic makers of electric fans. In 2006, the company, with a brand value up to CNY1.301 billion‡, was rated by World Brand Lab as one of China’s 500 most valuable brands. In 2012, the company achieved revenues totaling TWD12 billion‡, and was listed on the Taiwan OTC (over the counter) stock market.

The company received the honor of Representative Enterprise of Informationization and Industrialization Integration during the Eleventh Five-Year Plan, Excellent Contributor Award, China’s Excellent Individual Award for Informationization, and the honor of Demonstration Project with “Four 100s” of Informationization and Industrialization Integration in Guangdong Province, as well as other honors and recognitions. By 2012, with the deep integration of informationization and industrialization, Airmate had saved over CNY25 million in costs.

Establishing a uniform and efficient information management platform

The gradually deepening application of informationization, along with important best practices based on collaboration within an organization and between enter-prises, provided the company with an integrated solutions strategy for independent business systems. This strategy would allow the company to eliminate information islands by integrating research and development (R&D) flows, business flows and capital flows. It would also strengthen strategic alliances between collaborating enterprises, thus reducing the company’s communications costs and sharpening its competitive edge.

As a manufacturing enterprise of great significance in China, Airmate was eager to eradicate the increasing contradiction between technical advancements and lagging management execution, and fully control product costs in terms of product design, process design, material procurement and production process. After conducting a thorough analysis of the manufacturing industry’s current state and trends, Robert Chen, chief information officer (CIO) at Airmate, along with senior executives of the company, decided to adopt a product lifecycle management (PLM) solution to reduce inventory costs and risks while improving data re-use.

With information systems already in place supporting the supply chain, the focus of Airmate’s PLM system planning was on increasing the technical quality of its products and accelerating market turnaround/responsiveness. The company hoped to build a PLM system that could fulfill its business objectives and support future strategic development.

Upon evaluation and observation of multiple solutions, the company chose Teamcenter® software from Siemens Digital Industries Software, dividing the PLM system implementation into three phases. It is currently in Phase II.

According to Chen, Teamcenter would provide a uniform and efficient, information management platform, integrating product market analysis and planning, R&D, design, production and sales information for reduced time-to-market, mass production and reduced materials costs. Chen notes, “The introduction of Teamcenter is part of the company’s business process, business system reconstruction and management innovation plan, involving almost all of the company’s departments, including R&D, purchasing, production management, marketing, information technology (IT), finance and human resources.”

With Teamcenter, Airmate has integrated project and product management, including drawings and files, environmental concerns, development costs, models, design changes, engineering changes, manufacturing and other information to build a knowledge base that is available to all appropriate personnel throughout the organization.

The company has completed Phase I, which includes the deployment of a bill of materials (BOM) function; enhanced management of technological changes, files and data; optimized and standardized R&D workflow; implementation of the digital process for 16 categories of files; as well as integration with enterprise resource planning (ERP), business process management (BPM), short message service (SMS), supplier relationship management (SRM), customer relationship management (CRM), business information (BI), email and other core systems.

Realizing measurable results

Airmate is now exceptionally efficient in reviewing, approving and releasing draw-ings and files, and has cut the time for verification from 20 minutes to 5 minutes. The 2D and 3D models are far more consis-tent than the ones that were developed with the previous process, thus reducing the error rate for design changes by 30 percent. Due to the significantly reduced time needed to redraft 2D design draw-ings, design re-use has also increased. Additionally, the release cycle for an engi-neering change order has been reduced from 5 days to 1.5 days, while that of a new BOM is down from 4 days to 2.4 days. Furthermore, the growth rate of new material numbers has been reduced by 5 to 10 percent, improving parts re-use, increasing purchasing efficiency and reducing management complexity. All-in-all, the implementation of PLM has created an efficient R&D management platform at the enterprise level, enabling significantly faster product development and new business opportunities.

“The use of Teamcenter has not only helped us save important enterprise data, but it has also enabled us to effectively share and re-use information and improve the re-usability of various equipment, which has directly reduced our overall costs,” says Chen. “That has allowed us to achieve great information transparency and gap-free collaboration between various factories and supplier partners."

At this stage, the most prominent change has been the integration of 2D and 3D CAD (computer-aided design) into the standard operating process,” says Chen. “With the help of Teamcenter, we have greatly improved parts re-use, substantially shortened our time-to-market for new products, avoided the risks of new product R&D, and cut R&D costs, all-in-all leading to quicker profits.”

Creating a leaner organization

Siemens Digital Industries Software partner Alpha Precision Instrumentation Corporation (APIC) provided planning and practical assistance for the deployment of Teamcenter. During Phase I of the PLM project, APIC helped Airmate apply Teamcenter modules according to its needs, and provided services for complete project planning and design, overall project implementation, promotion and technical transfer.

“During the process, we established a solid project management system and set up a checkpoint system to verify results and operability with users in real time,” says Chen. “APIC’s services played a key part in the successful go-live of Phase I.

“With respect to technical transfer, we combined practice with theory based on the training and explanation provided by APIC consultants. By the time the system went live, four technicians possessed the basic development abilities needed to make modifications quickly as requirements emerged.”

In view of the important benefits gained from the Phase I deployment, Airmate initiated Phase II. “We realized great achievements in purchasing, quality warranty, mold and manufacturing through business and management innovation based on the integration of various business systems,” says Chen. “It takes some time for an enterprise to be fully aware of and exploit the value of these kinds of improvements, but based on our experience, we know this is the best way to make good use of resources, eliminate waste, shorten time-to-market and bolster profitability.

“From what we have achieved, you can see the positive effects of integrated business systems and a highly efficient collaboration platform that effectively integrates research and development, production, sales, design, procurement and so on. The technical achievements are manifested in quicker economic benefits.”

Chen concludes, “The key to effective change is combining process innovation, management innovation and business innovation. A PLM solution with collaborative product data management systems, such as Teamcenter, enabled us to get twofold results with half the effort.”