The management
of inventory is a problem that can plague almost any
industry, including machine shops and machining-intensive
manufacturing operations. Dura-Mill, Inc. (Ballston Spa,
New York) is just such a case. The company makes solid
carbide end mills, and because its customers rely so
heavily on these tools, Dura-Mill works hard to ensure
their quality.
For example, the raw stock
is measured when it comes in to make sure that it is
within Dura-Mill's specifications. The diamond cutting
wheels used to transform a carbide blank into a finished
end mill are measured for dimension and profile to make
sure they will cut the exact shape that is required.
And millions have been spent on robotic cutting systems
to make certain that each end mill of a particular product
number is identical to others with the same number.
But with the attention to
manufacturing detail comes another problem: Inventory
is expensive. It takes space, dollars and people to manage
it.
The raw carbide blanks for
end mills cost about $8.00. The time and labor spent
to create a finished end mill add significantly to the
dollars invested in a single completed piece. Thus, a
stockroom full of completed end mills represents a big
investment. It is in everyone's best interest to make
sure that it turns over as rapidly as possible. The best
situation would be one in which Dura-Mill could maintain
an inventory of each end mill that would be sufficient
to meet customer needs without triggering rush production
orders and without causing stock to sit on the shelf
for months on end.
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Dura-Mill
uses EXEControl to keep track of finished goods in
inventory as well as the raw materials necessary
to produce them.
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In the past, inventory control
was frequently done by the "look and guess" method.
Someone would notice that the bin holding a particular
end mill seemed to be getting low, which would trigger
a request to make more. The problem is that for popular
end mills, a half a bin might represent only a week's
supply, but for one of the slower sellers, it might represent
several months' inventory. Setting the right level of
inventory for each product number was the ideal, but
it was hard to achieve.
The solution to the problem
came from a familiar product. Dura-Mill, and its Newco
Products Division (which sells industrial supplies),
had been using the EXEControl system from Ebeling Associates
(Clifton Park, New York) for years to manage substantial
portions of their businesses. At every step of the way,
from a customer phoning or faxing in an order to its
being shipped out the door, EXEControl helps Dura-Mill
manage the process. EXEControl creates the picking list
for packing the order; generates an invoice; and tracks
general ledger, accounts payable, accounts receivable,
purchasing and the status of special orders.
The software is used in other
ways as well. When a machinist begins a production run,
a terminal at the CNC machine displays the instructions
for making the part. Then a "smart" time clock
prompts the machinist to tell the system what step he
or she is performing, on what machine, and how many good
and bad parts are produced as a result of the operation.
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Dura-Mill
makes solid carbide end mills in a variety of profiles
and sizes. Setting the right level of inventory for
each product number was hard to achieve by simply "looking
and guessing."
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In addition, because it is
possible for one machinist to perform several operations
on multiple CNC machines at the same time, the software
can automatically distribute that person's time among
the various jobs. In this way, Dura-Mill can track the
exact cost of each part, based on the raw materials and
labor necessary to machine it. If a part must be scrapped,
there is even a pop-up menu for entering the reason.
This level of detail in data capture provides full-lot
traceability from supplier to customer and information
for maintaining quality control.
Ebeling Associates suggested
that EXEControl could also help Dura-Mill more productively
handle inventory control, using a scientific formula
based on previous ordering history to establish minimums
and maximums for each product number.
"We're already starting
to see the benefits of much better control of our inventory," says
Scott Walrath, administrative vice president. "In
the past, we would often do manufacturing runs of 1,000
pieces of a given end mill. Now, we typically do 200-300
pieces. That means that our manufacturing equipment is
not tied up as long, freeing us to respond faster to
special orders from customers. In a competitive business
like ours, that's a big advantage."
EXEControl not only keeps
track of finished goods in inventory, it also keeps track
of the raw materials that are necessary to produce the
finished goods, based on inventory levels. "It's
no good knowing you need to make 200 more of a given
end mill if you don't have the carbide blanks you need
and the tools to cut them," Mr. Walrath says. "The
software also helps prevent us from over-ordering raw
materials for products that sell more slowly and gives
us an accurate picture of how much raw stock is in-house
on consignment."
Article originally appeared
in Modern Machine
Shop July 2002 Issue. Republished here with permission
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