Software helps Young PMPA Member (May, 2000) Managing information and improving operating efficiency can be challenges for any organization. For one four-year old screw machine shop, the answer to addressing both issues was found in increased implementation of its shop management software. Kalkaska Screw Products (KSP), located in Kalkaska, MI, is a 30 employee custom manufacturer. Formerly a division of a larger company, the business became an independent after a buyout in January 1996. Although the purchase left the new management with a full shop and work force, information management systems were not part of the acquisition. Faced with the immediate need for a flexible and economical shop control package, the new owners responded to a timely sales call by buying just such a system. Since that time, through strong product evolution and customer service from its vendor, and improving in-house implementation, management realized that the purchase was a fortuitous one that continues to pay dividends in operating efficiency and quality data. Since the middle of 1996, controller Beth Rowell has been the shop’s chief user of the shop management system, Visual EstiTrack from Henning Industrial Software. As is so often the case at small shops, employees at Kalkaska wear many hats. Among Rowell’s other rolls at the shop are acting as MIS manager, as well as performing various human resources functions. In those capacities, she has a unique viewpoint from which to assess operations in the shop. Her observations are often the basis for changing the way employees perform their duties and interact with one another and their shop management system, maximizing the benefits of the software, which she says is designed to allow each user match their use of the system to their tasks. “It just depends on how you want to use the system,” Rowell explains. “And I want to use it all. My job is to put myself out of a job. That sounds bad, but I’m here to make improvements that give me time to do other things.” Data Standards Improve Efficiency The operating improvements Rowell refers to include continuing the effort to standardize data input on each job, implementing the system’s new integrated accounting software, and creating some benchmarks not only for what data is available, but what can be done with that data once it has been retrieved from the shop management software. “We’re starting to develop ideas to use the data. I’m getting into that this year,” Rowell says. “We’re really going to target benchmarking and coming up with processes to use the data we gather.” As in any computer application, the old adage, “garbage in, garbage out,” holds true in this situation as well. Rowell maintains a commitment to gathering high-quality, accurate data because she believes feedback from the system won’t be worth as much if the data it uses to provide the information doesn’t reflect actual events in the shop. “A lot of it is getting better input information, then the information you get out is better, so it just depends on how diligent you are,” she says. At KSP, the battles for that data are won and lost on the shop floor. That’s where visitors to the shop will find one of nine networked workstations. Having a work station on the floor among the chips and bar stock allows the operators to call up computerized job cards, recording their time against specific jobs. When they begin working on a job, the operators log in. If production stops, the computer lets operators indicate that the machine is not running, and why, without logging off the job. When operators take breaks, stop working for shift changes, or finish a job, they log off the job, the length of time they worked on the job is indicated and the number of parts is entered by the employee. “They’re responsible for getting their job cards. They go to the computer and clock in and out, and that’s been a very educating experience, because you have to teach them,” Rowell says. The shop’s scheduler/order entry person keeps track of the job cards, ironing out problems with operators and helping them learn to use the system fully so the shop can get the greatest benefit from the information they enter. Committing personnel and time to the issue has helped make the transition from the shop’s old system successful. “We’re continually getting better at it,” Rowell says. “You have to enforce what you want to do, so we’re really starting to monitor it, and they’re starting to come in with questions about whether they entered the information correctly and how they should handle particular situations, so we’re getting there. We’re really working toward accurate data.” One of the biggest challenges the shop has faced in accurately recording this data occurs when a machine goes down. Rowell says it has been difficult to retrain the operators to go to the computer and change the machine’s status to indicate it is no longer running before they set about fixing whatever problem has occurred. “Sometimes they think it’ll only be a five minute job to get running again, and it turns into a three hour job,” she explains. “The biggest thing is getting people to punch in and say, ‘I’m down, something broke and I’ve got to go fix it, so I’m not making any parts.’” Actual Costs Refine Bids The time recorded in the system for jobs soon will be tied to payroll as the shop migrates to its new, integrated accounting software. The information is currently used for inventory control. As each operator logs the number of parts made against a particular order, the system automatically reduces the material used from inventory. Feedback from the shop floor is also used to refine bids for repeat jobs. “We can use it for quoting the next time. We compare the actual data to how many pieces we estimated we would get per bar. Sometimes the operators do something different and we don’t get as many as we thought we would, or we get more per bar because they figured out a better way to run the job,” Rowell says. “We use that information to adjust the next quote.” The shop bids on jobs from a national customer base, making parts that range in size from 2 5/8” bar stock on the high end to the shop’s smallest machine, which will run stock as small as 1/16” in diameter. KSP does make some parts for customers in the auto industry, but most of the shop’s business comes from making parts for gas meters, fire extinguishers, oxygen tanks, and consumer hardware. New parts, or revisions for repeat parts, keep KSP’s estimator busy calculating bids. Those bids include feedback from the operator’s job cards, as well as the estimator’s experience. “Our estimator has 30 years of experience in screw machines, so he’s got a good idea of how jobs will run. But because we also use the job tracking program we can come up with an actual time. We can look up how fast we ran a part the last time, or an average, depending on how many operators ran it for how many days,” Rowell explains. “As we run the part, there should be a learning curve and we should get better and better. As you get better and more sophisticated at recording data, you have a better handle on how much your burden rate is.” Until those burden rates are better defined, KSP relies on average costs for running machines, as well as its material handling charges and any identifiable discrete tooling charges, to help calculate its prices for parts. After filling in dimensions and materials for the part, the estimator uses the system to determine how much material will be required, as well as the purchase price for the material, and the mark up. He then selects operations, and enters cycle times and setup charges. The final screen offers users the opportunity to add onetime charges for gauges or tooling, and the capability to change the price if a job is still desirable at a lower margin. The bid is then sent out to the customer. Inventory Control When a purchase order is received, it goes to the scheduler, and then back to the estimator, who is also the shop’s material buyer. In an effort to increase efficiency, Rowell has been aggressive in implementing the software’s inventory control functions. As a result, the estimator/material buyer is able to determine how much of the material needed for the job is in stock, how much of that material has been allocated to other jobs, and how much, if any, must be purchased before the job is scheduled to run. “I don’t want to have to count inventory once a month, especially raw material, so when we order material, we do a purchase order and assign an inventory number,” Rowell says. When the material is delivered, the shipping manager puts the material in the warehouse and enters it into the computer as having been received into stock. Before delivery, the system indicates the material is on order, because of the purchase order. This is a feature Rowell and her staff like since it helps them take better advantage of quantity pricing from material suppliers. When a commonly used material is in relatively low supply, the shop places a large order to get a better price. Once a purchase order for the material is logged into the system, the material is listed as being on order. Therefore, in the time between the order and delivery, no one inadvertently places a second, overlapping order. Rowell generates a monthly inventory usage report from all the inventory data collected in the system. The shipping and receiving clerk counts the inventory used during the month, comparing actual totals to the reports and correcting any variances. The material designated for a job helps determine when it will go into production. The shop uses a loose schedule determined by due dates. That framework gives operators flexibility to determine the order of production based on material sizes. This lets the operators streamline setup times by running jobs with the same size material in sequence. Routers Provide Job Notes Each machine on the floor has a corresponding bin where information packets for jobs are stored for the operators. That’s where they get their tooling and material lists, any gauges required for a job, and the router. The system’s routers include detailed information for each job. In addition to basic information, the router also includes an area for notes, which allows more in-depth information to be included as needed. KSP takes advantage of this capability to note information like any outside processing and the vendor’s name. When the parts reach shipping, the shipping clerk knows where to send the parts, and which vendor a purchase order should be issued to. As a result of the purchase order, the system continues to track the job when it is outside the shop. Visual EstiTrack also lets the shipping department copy the router notes into that purchase order, which is printed and sent to the vendor to act as an instruction sheet on the operations to be performed on the parts. These instructions only need to be defined once for all current and repeat jobs. “That saves a lot of time, because the outside vendor needs to know what to do,” Rowell explains. “This is a good way to find out quickly.” Enhancing Customer Communication While the shop management software helps boost communication with outside vendors, that is not the only way Rowell is using it to enhance Kalkaska’s external communications. She says the data collected in the system, and the ease of retrieving that information also helps improve communications with the shop’s customers. “Because we’re using more and more of it and getting more efficient, the software is starting to really help. Customers call and say, ‘Can you tell me about this part?’ I can look it up and tell them where the part is without leaving my office. It pinpoints exactly where the job is, and you don’t have to go chase it down,” she says. Integrated Accounting System In addition to enhancing the shop’s external communications, the shop control system has recently taken a major step forward in internal communications with the addition of accounting capability to Henning’s product line. Visual Books is fully integrated with Visual EstiTrack, accessing the same databases for information. Rowell is excited about this development, and is currently in the process of migrating to the new system modules. “That was my only disappointment when I saw the software for the first time. I said, ‘Where is the accounting part of it?’” she recalls. “Now I’m getting what I asked for. I went with Visual Books because it integrates with the manufacturing, so I can eliminate a lot of double entry, and in this day and age, to be competitive, you have to be efficient.” Another way the new integrated system is expected to boost efficiency at the shop is by assigning purchases to the appropriate general ledger accounts at the time the purchase order is entered. Rowell is developing a set of purchase distribution codes that will cover heat treating, plating, tooling, perishable tools, cutting oils, gauge repair, gauge calibration – and more. Whenever a purchase order is issued for one of these items, a code will automatically assign the purchase to the right account, saving administrative time in the accounting process. “A number of people do purchase orders, and they order a variety of items. I’ve tried to learn what things are and what account I should put them in, but it’s quite time consuming to figure out,” she explains. “Determining the difference between tooling and perishable tools, or machinery repair, machinery maintenance, or building repair can be challenging. Being able put that responsibility on the people who are buying a particular item is really good, because they know what it is. They can specify what it is and I don’t have to figure it out. It’s simple for them, and in the end, it also makes it simple for me.” Vendor Support Once KSP completes the transition to the integrated system, Rowell thinks the shop will probably need some modification of the accounting package to better suit its needs. However, that doesn’t concern her because of the vendor’s flexibility. “It’s economical, and Henning is willing to be flexible. They don’t have a problem customizing the software, and to me that’s really important, because a lot of vendors say, ‘This is how it is, deal with it.’ If I need anything out of the ordinary, I can pay Henning to change it. So far, I haven’t had to have them tailor anything because everything I need usually comes in the next update,” Rowell says. Those updates tend to include items Rowell says she just began wishing for as she adapted her use of the software to each new functionality included in the most recent upgrade. The basis for many of the changes included in the updates is user feedback, especially from the customers who attend the vendor’s annual user group meetings, according to Rowell. KSP is a founding member of the user group, and Rowell continues to be a strong proponent of it. “I wanted to talk to other people and see what they were doing, or how they were using the system, what problems they were having, if they were the same ones I was having. I wanted some user support, and a little bit of networking,” she explains. “We get together once a year and come up with all of the things we want to see. We have an impact on the things that are implemented in the program. That’s really nice, because Henning responds to our needs. When we say we want something, we usually get it.” In fact, Rowell gave the keynote address, Planning The Key to Success, at last year’s user group conference. Kalkaska Screw Products and Henning Industrial Software are proud members of PMPA. |
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