Rapid Deployment of ERP and MES Solutions

1. Executive Summary

A small engineering and manufacturing firm in Dayton, Ohio was facing inventory hurdles while accounting for on-hand stock using analog methods. We analyzed the warehouse space, scalability needs and special requirements needed from the customer. After proposing and rapidly deploying multiple solutions, we had a 100% inventory count within 60 days. This case study highlights how a small engineering and manufacturing business reduced stockouts by 30% and improved on-time delivery through better demand planning and inventory controls.

2. Company Background

• Defense Contractor employing ~50 salaried and hourly employees. • Engineering and Manufacturing firm. • The firm has 23 years in business with rapid expansion within the previous 24 months and sourced all materials domestically.

3. The Challenge

The customer had limited experience machining and fabricating in low-rate and full-rate production environments, faced problems accounting for US Government owned inventory, unfamiliar with controlled scrap plans, lack of production standardized work and lack of process engineering in warehouse operations. The company`s financials were in good standing and maintained margins at or above industry standard aggregated across all contracts.

• Low First Time Yield (FTY) rates of sub-component hardware

• Inefficient and inaccurate inventory counts

• Production scheduling gap

• Unreliable forecasting of vendor production

• Inefficient processing of raw materials, storage and accounting

• Lack of centralized system for quality management

• Lack of centralized system for operations

• Inefficient metrology lab processing

4. The Approach

After the initial consultation, our investigation identified gaps unknown by the company and concluded with several additional systemic shortcomings. Our solution method was a mixture of utilizing data analytics, plant layout analysis, monitoring work flows in real time and getting to know the individuals on the shop floor through Genba. After two weeks of analysis, modeling and drafting the framework of multiple integrated systems and processes, we executed the first phase of solutions.

Phase I introduced the principle of standardized work in lean manufacturing and proposing a plant layout adjustment to correctly facilitate the execution of concurrent operations. The introduction of standardized work was a bottom-up approach in that we integrated knowledge management from the shop floor up to the COO. We did this by aligning shop floor members daily to understand their roles and responsibilities for the day, creating a sense of ownership and pride in the business. Each shift began their work with the understanding of their tasks for the day and the expectation that they must work as a team. While this implementation was underway, we removed and repositioned pallet racks and raw materials storage areas to facilitate the efficient workflow of shipping and receiving dock operations, stock picking and metrology lab throughput. Keeping the employee’s high quality working conditions at the forefront of our efforts, we added ergonomic workstations giving the employees a more comfortable and posture friendly environment. This resulted in a 3% productivity rating increase within 25 working days.

Phase II introduced the integration of an off-the-shelf inventory management solution, manufacturing execution system and bar-code scanning capabilities. We brought in experts from the contracted software companies to assist in the software and graphical user interface set-up and initiation. Working closely with the customer`s in house digital technology department, we integrated both systems within fourteen days and began data-entry of 60,000 parts across 150 SKUs. Working in parallel, we developed the manufacturing execution system using customizable software through a vendor already under contract with the customer. This made for quick integration bringing the MES to the development environment within two weeks and fully executed within an additional three weeks.

Phase III introduced the critical analysis for demand forecast and planning to include risk analysis and mitigation. This final phase served as the capstone for this project, tying together all the hard work put in by everyone involved. Forecasting upcoming demand is an integral part of accurately depicting workload and tooling availability. We have maintained a regular cadence with the company`s leadership to ensure we capture opportunities and are proactive in our processes.

5. The Results

• Increased primary machine OEE by 9% • Accounted for all excess inventory within 60 days. • On-time delivery rate increased by 5%

6. Lessons Learned

• What the company learned – importance of capturing company owned and government property inventory. Introduction of lean manufacturing. • What other manufacturers can take away – the best solutions are the simple solutions that aligns everyone on the same goals.

7. Conclusion

This project was successful due to the team`s dedication and overwhelming support from the customer.