Job costing, scheduling and control of labor and inventory increased efficiency at Quaker Plating, Inc. and Precision Coatings, Inc...
Platers and coaters with the right business-management software system can do more than control costs and improve on-time shipments. Two different contract manufacturers have increased efficiency and grown in size with the help of business-management software.
Both Quaker Plating, Inc. and Precision Coatings, Inc. were manual shops that computerized two to four years ago and recently moved to larger quarters to handle their increased workloads. Quaker Plating, Johnston, Rhode Island, is a 55-employee shop with expertise in both decorative and functional electroplating for the electronics, medical and apparel industries. The shop has grown 30 pct each of the past three years, with growth leveling off this year as it moved from a 10,000 sq ft facility to one triple that size.
Precision Coatings, Inc., St. Paul, Minnesota, specializes in thermal spray coating of metals or ceramics and Teflon® coatings that are applied to machine components to provide wear or corrosion resistance, gripping, low coefficient of friction, or non-stick characteristics. This 15-employee shop also developed the Dura-Slide™ coating series. This coating system adds durability to the `slide' in Teflon. It is used in several industries, including printing, packaging and injection molding. Precision Coatings manufactures OEM components as well as provides coatings for maintenance of in-plant machinery. The shop has doubled in size since it automated in 1994.
Control of Time and Material. Frank A. DeFruscio, CEO of Quaker Plating, believes the main benefit of business-management software has been control of labor costs. The system's Data Collection module (bar coding for time collection) provides more accurate information than a manual system could. For example, the new data quickly revealed some pricing problems. "We immediately noticed the work center efficiency reports," said Mr. DeFruscio. "At first we thought they could not possibly be right. Efficiency was just 35 pct to 40 pct on some jobs. After investigating, we found the reports were accurate. As a result, we developed more efficient means of producing the same parts without compromising quality or affecting price." The system sent up a red flag and allowed shop management to re-evaluate production procedures to increase efficiency.
Control of labor and material costs has been the major benefit at Precision Coatings. The shop's products go through several work centers and machinists. "Before we had business-management software, tracking the labor on a job involved a job card and manually recording job number, time and operations," said Linda Grundtner, MIS Manager at Precision. "Before the software one of our employees had to add it all up at the end of the day by department. Now that employee spends a fraction of the time on time collection, even though we have grown substantially. He posts the data in the morning from the previous day, and basically the job cost is complete at the point."
In addition to tracking labor, the system has improved material control at Precision. The shop has made the transition to bar coded use of materials. When material is issued to a job, it is recorded that same day using bar coding. At the end of the day, the purchasing department knows exactly what is in inventory, what needs reordering, and how much material went to a specific job.
Before it automated, Quaker required 400 to 600 inventory items on hand at all times to meet its two and three-day delivery schedules. "It was very difficult to keep track of what was here," admitted Mr. DeFruscio. "But now with a business management software system, we have reduced the inventory we keep on hand by 60 pct by ordering on time." Now Quaker simply prints a reorder by vendor, enough to hold them for about a week. This has helped cash flow immensely.
Realistic Scheduling. Quaker Plating uses infinite scheduling to expand and contract work centers, depending on the day's workload. All work center leaders get a daily copy of the foreman's report that shows what is scheduled for production that day. Depending on workloads, they can pull labor from one center to another as needed. Mr. DeFruscio also relies on the foreman's report during his weekly production meetings with work center heads to review the previous week's performance and iron out problems.
At Precision, the on-line job status tracking helps the production manager with planning and scheduling for the next shift.
Consistent Quality. Ms. Grundtner also cites the "traveler" (job sheet), which includes estimates of labor time for each work center and operation. "That way, our employees have a marker, a general idea how long the operation should take. If the shop paper says three hours and they have only done a tenth of the job in one hour, something is wrong."
The traveler, with its routing, inventory requirements, direct-buy and subcontracting information, also acts as a work instruction for the employee producing the part and as a record for ISO 9000. Precision is undergoing ISO certification and plans a final audit in spring of '97. The shop makes hundreds of products with several different coatings. The traveler lists the work center along with specific instructions for making that product, so if the job is repeated, quality remains consistent.
Mr. DeFruscio agrees. "The shop paper provides the operators with descriptions of how much time a particular part requires and how to run a specific job. It builds consistency into our operation."
Precision has had its system just two years. Quaker automated four years ago. The benefits have been major: better control of labor and inventory, increased efficiency and growth. If you can take action soon and find a system that fits your shop's needs, it should pay off.