Case Study Alstom Outsource Machine Shop To Velden

Alstom Outsource Machine Shop To Velden


In 2001 Alstom (formerly GEC) announced that it would be closing and outsourcing its machine shop as a result of a cost reduction exercise. Following a successful presentation from our Managing Director at the time, Alex Kitchen, an agreement was reached to move the machining, turning and the incumbent sub-contract activities associated with the production of the finished part from Manchester to Velden Engineering in Bolton. The agreement was based on a partnership approach from both parties, with monthly review meetings taking place during the operational phase to determine potential areas of cost reduction and quality improvements. Initially, all machines, materials, tooling and fixtures were loaned to Velden with the intention that Alstom would transfer ownership after a two year period.  The move was seamless, with machinery and men being transferred during one weekend and commencing production on the Monday morning.

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Using an open book policy, the prices of the components were calculated and we were tasked to reduce the cycle times and methods of manufacture by a minimum of 10% during the period of the agreement, plus achieving a target of 98% on time deliveries against agreed lead times and 97.5% AQL was stipulated on all deliveries. We are proud to say that these figures were easily attained.  To maintain synergy and product knowledge, we employed machine operators made redundant from Alstom and some of these employees still remain in our employment today.  Alstom has since changed ownership but we still enjoy excellent working relations with the new owners.

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