Case study: Vanderlande Industries

Discover in what ways outsourcing contributes to the realization of growth objectives at Vanderlande Industries

Summary

Changes in the market have led to strong growth at Vanderlande Industries. However, more production capacity was required in order to effectively realize the company's growth objectives. Outsourcing production of the STACK@EASE system proved to be the right strategy for continuing to satisfy market demand.

  • Highly reliable on-time delivery performance in spite of the challenges of managing project-based orders
  • Quality maintained at the desired level
  • Competitive in the market thanks to the best integral cost price
  • Outsourcing allows Vanderlande's production department to focus on its core competencies

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About Vanderlande Industries

Vanderlande is the global market leader in the field of logistics automation for airports and the parcel delivery sector. The company is also a leading supplier of process automation solutions for warehouses. 

The systems and services are designed to achieve immediate improvements in the customer's logistics processes and logistics performance, throughout the service life of the equipment. 

STACK@EASE is an innovative lifting tool that makes baggage virtually weightless to minimize the physical strain on airport staff when loading baggage items into containers after sorting. This system has already been put into service at Hong Kong International Airport and London Heathrow Airport.

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The Challenge

Changes in the market, e.g. online shopping and increasing passenger volumes, have led to more and more warehouses, distribution centers and airports being present in the world. With this came a greater demand for automation. As a result, Vanderlande Industries has experienced enormous growth. 

In spite of that growth, Vanderlande chose to maintain production capacity at the current level. So, the challenge was to achieve desired growth and quality levels regardless of the capacity problem. 

To Vanderlande, it was clear from the very start that the solution would involve outsourcing part of the company's production. But which product was the most suitable candidate for outsourcing? And more importantly, which partner?

STACK@EASE was not only a new product for Vanderlande, it was also more complex in comparison to other products which made it difficult for the company to integrate it into its own production processes. 

Based on current production capacity, satisfying the expected level of demand could not be guaranteed if STACK@EASE continued to be produced fully in-house. Therefore, Vanderlande started to look for a partner for this specific product; a partner capable of producing this item according to the desired quality, lead time and cost requirements. In other words, a partner that enables Vanderlande to quickly respond to fluctuations in demand. 

Fleur (1)

''To guarantee the quality of our products, including STACK@EASE, we are looking for reliable outsourcing partners that will help us achieve our growth objective.''
– Fleur Straathof 
Supply Chain Manager FLEET
Vanderlande

The solution

In order to achieve its growth ambitions and reduce pressure on in-house production capacity, Vanderlande had to find a partner that:

  • Is capable of handling all aspects of producing STACK@EASE
  • Possesses the technical knowledge and experience to produce a complex product such as STACK@EASE
  • Can meet the company's requirements in relation to costs, delivery lead times and quality, and offer the flexibility required for handling a project-based order flow

MTA, the partner finally chosen by Vanderlande, ticks all these boxes. 

Fleur (1)
''Because STACK@EASE is technically more complex than the other products made by Vanderlande, we searched for a company that possessed the required technical expertise and experience for producing products of this higher level of complexity. MTA seemed an excellent candidate, so the next step was to investigate whether there was indeed a good match on a commercial, technical and organizational level.''
– Fleur Straathof
Supply Chain Manager FLEET
Vanderlande

The decision to subcontract production of STACK@EASE to MTA was anything but spur-of-the-moment. Many crucial factors had to be investigated and given a seal of approval first.

The first step was to determine whether outsourcing of STACK@EASE production would result in a positive business case. The business case focused on one crucial question: is MTA capable of producing STACK@EASE at the best integral cost price while achieving cost reductions? The two parties shared information about prices, production lead times and the main cost drivers within the product openly and transparently in order to prepare an accurate business case. 

This preliminary scan indicated a good commercial match between MTA and Vanderlande. The next step was to investigate the organizational and technical fit: can MTA fulfill Vanderlande's orders according to the desired standards? 

MTA's total process, from order issue to the time when the product leaves production, was audited in detail by Vanderlande. An analysis of the total process is the only way of identifying and assessing all the possible risks. Does MTA satisfy all the criteria in terms of procurement, production, testing and validation, scheduling, quality control and staff qualifications? 

The outcome of this audit was clear: a green tick for each area of focus. ''During the audit, it became clear to us that MTA has structured and set up its processes extremely efficiently'', says Fleur. 

The next step was to draw up a joint plan of action to ensure a smooth transfer of production from Vanderlande to MTA that minimizes associated risks. This plan involved the following steps: 

  • Have a lead assembly engineer from MTA work in production at Vanderlande's site in order to familiarize himself with the product.
  • Document any expertise not yet present in the technical product documentation (TPD) in a Part Function Sheet (PFS) to ensure the availability of all the required knowledge and information.
  • Start an initial production batch using parts procured and produced by Vanderlande in order to demonstrate MTA's ability to assemble, test and deliver the product correctly. 
  • Selected suppliers are deployed in a dedicated Supply Chain. This process involved identifying parts critical to quality: which components have to be sourced from Vanderlande's preferred suppliers, and which parts can be manufactured by MTA's own suppliers. In the case of some parts, MTA had samples produced to eliminate any latent risks in the supply chain.
  • Full production start-up for STACK@EASE. 

''MTA's physical proximity was a huge benefit during this complex process from the initial business case to final production start-up'', Fleur Straathof explains. ''Even though we did not anticipate any major risks because of MTA's organizational structure and extensive knowledge, being able to react quickly in the event of questions or problems is still useful. Because this product is technically complex, our preference was to keep the lines between production and R&D as short as possible as this makes iteration cycles much easier.''

Fleur (1)

''We no longer have to worry about the availability of adequate capacity for the production of STACK@EASE. MTA is extremely reliable in terms of their flexibility, delivery lead times, price and quality. We have reduced significant pressure on our own organization by outsourcing production to MTA.''
– Fleur Straathof
Supply Chain Manager FLEET
Vanderlande

The Results

Outsourcing production of STACK@EASE to MTA led to the following benefits for Vanderlande: 

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Achievement of Vanderlande's growth targets by freeing up in-house production capacity for other products


Reliable and guaranteed delivery lead times in line with contractual commiments in order to satisfy demand

The best integral cost price for STACK@EASE thanks to the use of MTA's selected suppliers

 

Follow in the footsteps of Vanderlande and realize your growth objectives by outsourcing production of a module or system

Outsourcing production of the STACK@EASE system proved to be the best strategy available to Vanderlande for realizing its growth objectives and guaranteeing its ability to satisfy increasing market demand.

Would you like to discover the available opportunities in relation to your specific situation? Are you dealing with an outsourcing project and are you curious to hear the opinion of an expert? 

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