Management buyout enables majority stake in Rely Intracast and Walro Flex

Rely Intracast’s current Managing Director Mark Hughes and the current Managing Director of Walro Flex, Carlos Palinhos, have completed a MBO (management buyout) to become majority shareholders in the respective companies that will in future fall under a recently established industrial holding company Intakobusi Holdings (Pty) Ltd.

“We are very grateful to the shareholders of Allied Production Industries, the holding company that both Rely Intracast and Walro Flex have been operating under, for allowing us to complete this MBO as we see it as an important milestone in realising our ambitions for both companies,” said Mark Hughes who has been the Managing Director of Rely Intracast for the last seven years.

“Although Carlos and I are the majority shareholders of Intakobusi Holdings, the MBO has also afforded the opportunity for the current group Financial Director Emmah Raphela, and the two divisional directors – Peter Willers and Harry Erasmus – to also become shareholders of Intakobusi.”

“We specifically chose the name Intakobusi because of the symbolism that is associated with it. In the isiXhosa language spoken in South Africa Intakobusi is “the bird of honey” or more generally known as the honeyguide.”

This operation was originally a division of Allied Production Industries and traded under the name of Walro Flex, which is still the trade name of the cable the company manufactures. BGG Cable Manufacturing specialises in and is the only independent manufacturer of automotive wire and battery cable in Southern Africa. In 2003 the joint venture company BGG was purchased from its parent Gebauer & Griller of Austria and the two operations merged on the Walro Flex site in Alberton North, Gauteng.

At the time of the purchase of BGG a technical transfer agreement was signed with Gebauer & Griller, a leading automotive cable developer and manufacturer in Europe and this technical relationship is still enjoyed today.

Carlos Palinhos, the current Managing Director, was appointed to the position in 2013. Palinhos had previously worked at Rely Intracast for the majority of his 20 years experience in the foundry industry.

“When I was appointed MD the company had a 95% exposure to the automotive industry with the manufacture and supply of harness wiring to the local OEMs such as VW South Africa, Toyota South Africa, Ford South Africa and Nissan, amongst others.”

“I have gradually changed that mix and the automotive industry now only makes up 50% of our production. Non-automotive cable in the low to medium voltage range of highly flexible conductors, which are used in the manufacturing of low voltage switch gear and carbon brush assembly on electrical motors, are now very much part of our product range, as are many other specialist products.”

Both companies boast ISO 9001:2008 and TS16949:2009 quality management certification and between them they employ 235 staff.

“We have an established team of directors in place with the drive, determination and vision to take the business forward to an exciting future. We aim to build on our long-standing business relationships, and continue to grow our business with clients and suppliers alike.”

“The name of the holding company and the ownership has changed, but the people, and their expertise, are all still here,” concluded Palinhos.

Management buyout enables majority stake in Rely Intracast and Walro Flex

Walro Flex gets wired up for lower costs and better customer service with Preactor

Walro Flex, the trading name of BGG Cable Manufactures (Pty) Ltd., based in Johannesburg South Africa, is the leading manufacturer of automotive cables in Southern Africa. Producing amongst other items, cables used in the assembly of automotive wire harnesses.

The automotive cables produced consist of different wire thicknesses which are coated with PVC. A cable coating can consist of a single colour or a main colour and stripe.

As Walro Flex has grown additional items have been
added to the sales catalogue. Currently around 4000 orders need to be scheduled to meet customer requirements.

Walro Flex operates in a make to order environment and, being in the automotive industry, need to meet tight delivery deadlines.

Amongst others, the following issues need to be considered when developing a schedule:-

  • urgent customer orders,
  • the delivery date of standard orders,
  • the grouping of orders by wire size, colour and stripe to minimize changeover time,
  • and the selection of the correct extruder to run on e.g. one extruder can only do single colours, another is best suited to short runs.

Walro FlexThe increasing number of items being scheduled resulted in the task becoming more and more difficult to do manually. The less than optimum scheduling process resulted in decreasing customer service and unacceptable changeover scrap rates. The planner was taking up to two days to develop a schedule for the next week. As orders were received on a Friday this often required the planner to work on the weekend to schedule urgent orders.

In addition to the scheduling problems which were being experienced, a multi-fold increase in the price of copper in the last few years has made scrap more and more costly to the operation.

Deon Mattheus, Technical Director of Walroflex described their situation.  “We realized that the only way to improve customer service, reduce stock holdings, reduce changeover scrap and the impact of errors was to improve the scheduling process. After reviewing different approaches and different scheduling software we selected Preactor 400 APS as the scheduling solution that would meet our requirements”.

Lance Zikalala from Scheduling Solutions, the Preactor International Network Partner in Africa, worked with Walro Flex to understand the process and to develop a scheduling rule that would create a good schedule for orders that needed to be supplied by Walro Flex, while simultaneously taking all the operating constraints into account.

Walro FlexThe scheduling rule developed consists of three key features viz. a campaign period, a look ahead period and colour sequencing.

The scheduling rule requires that the scheduler sets the campaign period, which groups all orders in the campaign period together. The look ahead period ensures that any orders that should be grouped with those in the campaign period e.g. low volume orders, are also considered.

The orders are then scheduled on the appropriate extruder recognizing issues such small runs, single colours and extruder availability in wire size, colour and stripe sequence. The colour sequence runs from light to dark to light, both for stripes within main colours and within main colours themselves, to minimize PVC and wire scrap at colour change.  To ensure that the extruder does not run any single wire size, colour or stripe to the detriment of customer service, the logic re-evaluates priorities after a set number of reels have been scheduled.

Walro FlexExtrusion schedules are then used to create production schedules in the bunching area, which in turn are used to create production schedules in wire drawing.  This ensures that changes in the top level schedule are instantly catered for in lower level schedules.

As the parameters are easy to understand and change, it allows the scheduler and factory management to easily and quickly consider alternate schedules when conditions change.

Preactor has been integrated with a Wonderware based shop floor control system, to ensure that the status of production in progress is taken into account during the planning process.

Walro FlexThe improvements in operations since the scheduling rule was implemented have been significant. Finished goods stocks have been reduced by 40%, changeover scrap has been reduced by 30%, stock excess to orders has fallen by 60% and the planning time has been reduced to a few minutes a day. Customer service levels have improved to the point that the only critical orders now being worked with are those introduced by customers as a result of late order changes. The “Critical Orders” list no longer exists.

The increased customer service levels and increased production flexibility has also reduced the organizational tension that existed between the Production and Sales departments.  Deon Mattheus again. “We now use Preactor to schedule all levels of the production process, for wire drawing, bunching and extrusion. It has delivered the benefits we expected.”

Chris Mollison from Scheduling Solutions commented on the success of the implementation.  “It gives us great satisfaction to see Preactor being well used at Walro Flex, where it is not only delivering the promised benefits but has also improved organizational dynamics.”