Why are There Hidden Synergies in Test Operations?
Our customers often make the decision to focus on synergies in test because of the capital intensity — both human and equipment — in test organizations. One reason it produces such a great opportunity for synergy is that people hoard test infrastructure and ultimately own more of it than they need to.
They hoard it because it is often a shared resource and they can’t be sure they’ll have it available to them when they need it if they don’t hoard it. If it’s unavailable there will interruptions in key engineering and manufacturing processes get products to market or revenues recognized and converted to cash. These threats incent teams to pile up Just-In-Case capacity.
How Do Teams Hoard Assets?
Test equipment is both sharable and a fixed resource. As a result, it and all the expensive services that support it are hoarded for short term, local benefit. While hoarding seems to work locally in the short term, it does eventually lead to higher than needed enterprise costs and delays that hit everyone, including the hoarders.
Teams hoard in any number of ways.
- They take portable equipment and hide it in their lab, often called “Midnight Acquisition”
- People schedule tests for longer than they’ll need hoarding capacity “Just In Case”
- They make requests for test services “ASAP” so they get the capacity they need now rather than waiting for when they really need it.
Our approach is data-driven, achieves results quickly and then continues to mature those results over time continuing to accelerate engineering and manufacturing processes while eliminating unnecessary costs. It is a methodical approach that scales with no adverse effects on operations, actually increasing the speed of operations.
We are able to make quick judgments about locations where hoarding is likely to occur, redundancies and obsolescence issues by using our software capabilities and the years of experience we have finding these opportunities.
SenteReference, our central repository of commercial test equipment capabilities, houses parametric information on capabilities, market value, and obsolescence that, combined with our utilization algorithms, quickly enables us to find redundancies within buildings, across campuses, and across whole enterprises.
Our Results / Synergies
Our solutions help companies leverage their test infrastructure by finding opportunities for synergy across the organization and exploiting it. We’ve produced 4X improvements to the utilization of assets in test organizations by significantly “right-sizing” inventories for the mission they support and then continuing to right-sized and align them with our software and practices. We’ve produced synergies across rooms in one building, across an entire campus and across as many as 40 different global locations/campuses.
- Reduced asset count by up to 50%
- Increase equipment utilization by 200% to 400%
- Reduce capital budget requirements 35% to 75%
- Produce results in as few as 60 days
Applicability to Today’s Aerospace & Defense Environment
With the consolidations currently underway, being able to create leverage in operations and engineering infrastructure is critical. Newly joined companies have promised to produce “synergies”. They are looking to take cost out that is redundant, unnecessary, underutilized, obsolete etc.
We’ve done this for years, but usually years after the integration when the test operations still aren’t well integrated. We work with companies that are the accumulation of multiple different companies with their separate legacy cultures, ways of operating and infrastructure to produce these synergies and to enable them to operate more efficiently so, in addition to taking cost out, they increase throughput.
The sooner our processes are installed the faster these synergies can be produced. If possible, introducing Sente’s processes and tools in advance of integration with produce benefits prior to integration but will also accelerate the speed and value of synergies produced after integration.
Because of its criticality and its expense, it is often the place most of our customers decide to focus first. With the experience and expertise we’ve developed over the years we can also produce results quickly because we know how to approach the problem and where to look for opportunities that aren’t obviously redundant or underutilized.
Like many aerospace companies, this one had many sites and different legacy cultures on each. See how they installed common resource management tools, increased utilization 3X and funded new programs.
The hoarding culture was slowing this company down while impacting cost and quality. See how a journey to common processes and collaboration lead to a 50% reduction in assets as their business doubled.
Why Focus on Test? We focused on test because of the large investment companies make there, because of its importance to driving speed into the critical value streams in engineering and manufacturing, and because test and test equipment knowledge makes a difference to costs and speed. Embedded Knowledge Critical to Speed and Cost Competitiveness Our…
Hoarding Kills Utilization. Measuring equipment utilization is the best way I know to determine if your assets are being hoarded and, as a result, your business is incurring all of the costs of lost time and unnecessary money spent that comes with hoarding. The genesis for founding Sente was in a conversation I had years…
“Sente’s proprietary Test Resource Management™ solution delivers an integrated and holistic approach for test resource management with unique capabilities that allow large organizations in the aerospace and defense, semiconductors, and life sciences industries to manage and streamline the complexity of their test operations and to be more effective, competitive, and strategic. Frost and Sullivan Analyst