Plant Management for the Year 2000 and Beyond

Article From: Products Finishing, , from Gardner Business Media

Posted on: 4/1/1999

New software has allowed Pioneer to better understand costs, increase efficiency and improve communications with customers...

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Pioneer's Green Bay facility

Pioneer's Green Bay facility is approximately 100,000 sq ft. Keeping track of all the information in this shop and the company's two others has been made easier with the help of a new plant management software system.

These pans have been anodized

These pans have been anodized to improve their wear and corrosion resistance.

Plating shops handle huge volumes of information every day. This information includes customer lists, part orders, bath formulations, blueprints, shipping and receiving orders, quality control results, research and development documentation, inventory, etc. Although "information" cannot be found on the balance sheet, it is perhaps the most valuable asset of any company.

In years past, many companies maintained this valuable asset in numerous file cabinets or a couple of databases, one for accounting and one for shipping/receiving and so on. When the information was needed, an employee searched through the various cabinets or databases and pieced the required information together. But, more and more companies realize that the real value of information comes not from maintaining it, but from their ability to distribute, compute and analyze it virtually instantaneously. Why are these capabilities so important? Because with them a company can better understand costs, increase efficiency and improve communications with customers.

The problem

Pioneer Metal Finishing, Green Bay, Wisconsin, one of the largest plating job shops in the U.S., realized the need for this capability almost two years ago. At that time, the company was operating under a highly modified core accounting program. "We had an accounting program that was highly modified by internal programmers over a period of 10 years to accommodate our needs. We took the core accounting and sales order modules and turned it into a package that basically ran the business for us," stated Derek Novotny, information systems administrator at Pioneer.

Because Pioneer had extensively modified the program's code, the software manufacturer's updates and additions were no longer compatible. The absence of these updates and additions made the system inflexible and limited the company's growth. "It netted out from a capital standpoint that we can continue to grow and evolve as a company because we can buy more tanks. We can buy more cranes. We can hire more people. But the limiting factor was our information system," explained Keith Sealund, division manager at Pioneer. Although Pioneer could buy more equipment to take on more work, without a new plant management system it would not be able to handle the volumes of information associated with the increased workload.

Not only was Pioneer's current software limiting the company's growth, but it was not Year 2000 (Y2K) compliant either. The company's accounting program analyzed the current and previous years' sales to predict the next year's sales. In 1999, the computer would analyze both 1998 and 1999 to predict sales for 2000. But, due to code within the program, the system would not understand the year 2000, causing the system to shut down. According to Mr. Novotny, "That necessitated us moving forward very rapidly to find a potential solution to the problem other than repairing our code."

The solution

Pioneer was left with no choice but to find a new software application. What it found was a plant management software system that provided all the capabilities necessary for the company to manage its information for 2000 and beyond. The software is called Visual Shop and is made by Cornerstone Systems, Inc. (CSI). Not only did the software eliminate Pioneer's Y2K problem, but it also provided the shop the means to better understand costs, increase efficiency and improve communications with customers.

The plant management software consists of several modules that maintain all of the company's information in one database. Some modules included in the software are Order Entry, Shipping and Invoicing, Accounts Receivable, Scheduling and Tracking. (See the link for a complete review of the software's modules.) "From a platform standpoint, this is a state-of-the-art system. We are all aware that information systems technology has done tremendous things in the last few years, and we haven't been taking advantage of them," said Mr. Sealund.

Implementation

Pioneer intends on implementing the plant management software in three phases. The company is currently in phase one, but is planning to move into phase two soon. "In the first phase we're going to use the system to emulate our current system with all of its inefficiencies. Get it running basically. The point is to know what we are doing before making substantial changes on the floor," said Mr. Sealund.

"Once people are familiar with that environment, we can sit down in continuous improvement groups and start attacking various components of the business. We can say this is how we currently do it, how do we want to do it and where can we remove some of the bottlenecks. That would be phase two, which we also envision incorporating bar coding and tracking."

"The third phase is beyond the production and customer service needs. Here we start looking at some of the ancillary operations like the laboratory, research and development, quality control and the truck fleet."

Understanding costs

It has always been difficult for platers to determine the exact costs involved in a particular job. How much time was spent masking? How long did it take to rack the part? How long was the part on the line for cleaning and plating? What about post-processing time? What were the man-hours required for the job? How accurate was the original quote for a job?

Under Pioneer's old system, it was up to the employee in each department to estimate the amount of time he spent working on a job. However, the new software has a bar coding and tracking feature that will allow the company to see exactly when an employee started and ended a job. "When we become fully implemented, we will know exactly how long parts were in any specific area and locate them precisely in the plant as to what quantities are where," stated Mr. Novotny. Couple this with the software's reporting and analysis capabilities and Pioneer can now properly estimate the cost of every job. With a better understanding of both the direct and indirect costs of a job, Pioneer will be able to determine exactly which jobs are truly profitable. All of this will provide Pioneer with a better understanding of how to grow and expand.

Improving efficiency

Although some departments at Pioneer used computers, some did not. Even those that had computers were not necessarily able to pass information between them. "Our previous system was very much a paper-based system. It was manual and labor intensive," said Mr. Sealund. Because the system was paper-based, employees often spent time re-entering data, which presents a possibility for errors, or searching for various forms or documents in other departments.

"The key is we want to use a database. We don't want to have multiple databases that don't communicate with each other," said Mr. Sealund. Pioneer's new system allows all of the company's information from all three of its plants (Green Bay, Minneapolis and Monroe, Michigan) to be stored in one central database. This means that information only has to be entered once, and employees in each department of the company have immediate access to any information they might need about a particular order.

"Instead of our customer service, pricing, shipping and production departments being islands of information, by sharing information in an electronic form everyone will become more informed," stated Mr. Novotny. For instance, customer service reps will no longer have to track down an order's location in the shop. They can simply find that order in the system's tracking module while they are on the phone with a customer.

The software also allows Pioneer to better allocate its resources. This means that the shop will know exactly when it can schedule a job. The software may allow it to take on a job that it would have otherwise turned down because it thought enough resources were not available.

Improving communication

Pioneer has always prided itself on being responsive to its customers' needs and desires. The plant management software system it has installed, however, will make the shop even more responsive to those needs and desires.

"One thing we'll be able to do in the near future is take a copy of the database and make it portable. This would then allow for an enhanced sales automation process, providing data to our sales engineers in the field about their accounts," stated Mr. Novotny. The plant management system allows Pioneer to date and track all conversations between the company and its customers. Using a portable database on a sales call gives the sales person an up-to-date record of what is happening with that company. "This portable database will allow for our sales engineers to be more proactive in the field and know what's going on with our customers prior to their visiting and be more responsive to our customers as a whole," explained Mr. Novotny.

The system also provides an avenue for electronic data import. This means that customers will be able to send Pioneer blueprints and other part information to the company electronically rather than through the mail. Electronic data import will allow Pioneer to work on a faster turnaround time for those customers that need their parts in a hurry.

The Internet is also another possibility for Pioneer to improve its communication with its customers. In the future, it may be possible for a customer to log on to a part of the company's system and see exactly where its order is in the shop as well as other information. However, Mr. Novotny said, "In relation to the Internet, we still have a number of steps before we allow that type of access."

With its new capabilities, Pioneer feels that it has positioned itself to remain one of the largest job shops well beyond the year 2000. "Financially this has made a lot of sense. In addition to having a system we can use and like and can adapt to our future requirements, we also have a system that is economical," said Mr. Sealund.


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