Monday, February 13, 2017

Positive development in costs by co-operation

In the end of year 2008 MFG Components made a contract of manufacturing a power transmission product family. For previous 20 years, this product family was manufactured by an another company in Finland and there was a threat of manufacturing being eventually moved out from Finland due increasing costs. MFG and the customer made an easy decision to together prevent this by taking action and controlling costs in close co-operation.

The products consist of machined parts, purchased components and a small assembly.





The first year, 2009 was more of learning but still the product costs were reduced. It was a common note that the development requires re-designing. The re-designing work was made in co-operation with MFG and the customer reducing both the manufacturing and product costs. Re-calculation enabled also the use of new, more cost-effective materials in production.

After the product structure was stabilized and a suitable machining center was invested in commercial use, it became possible to use advanced multi-purpose machinery.
At this moment, a multi-purpose machine is used in 85% of manufactured parts of this product family. In addition to lower price level, this type of manufacturing enables also shorter and more accurate material through put time in production.


Side by side with this project there has been a co-operative purchasing development project. As a result, the efficiency has grown and part of purchases comes now directly from Europe.
The final target is to continue the development work in other areas of business. The theme of this year is streamlining the office work.

For further information, please contact:
Timo Ala-Jääski, MFG Components Oy

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