Copyright (c) 2014 John Merk
One of the biggest challenges in forecasting accurate expenses is the predictability of production consumables. Not only does this inconsistency with production consumables affect job costing, budgeting and forecasting but it also affects scrap and production efficiency. There are some companies that I have run across that have this ability to expense materials accurately but it is very few. As a specialist in many areas of production consumables over the past 25 years, I have been involved in some of the significant strides in solving this dilemma. One in particular that I have specialized in for over a decade is inventory management through software and control devices.
The advancement of inventory management software can now control the usage and access of materials that will immediately stop the excess consumption condition. With conventional tool cribs utilizing software and an onsite crib associate; the software can inform the crib personnel as to the allowance of additional tools or the allowance of a specific tool to a specific individual for a specific job.
The customization of the software parameters are only limited to your imagination and logic. The logic to accomplish anything that you can think of, is available through the support of the software manufacturer and experienced inventory management distributors. This ability is not available through all inventory management software. One that I subscribe to, have worked with for many years and recommend is AutoCrib. The AutoCrib Software is very powerful yet one of the most user friendly on the market.
Not by software alone will you succeed! Traditional tool cribs are being modernized through the implementation of vending machines coupled with inventory management software. Advanced implementations include RFID cribs which utilize radio frequency identification on the products barcode when being checked out. The solutions are virtual person less cribs. These cribs require minimal personnel assistance to manage and are often managed by the distributor remotely.
Software and a control device such as a vending machine provides the highest capability to implement accurate expenses per job or operation. (Cost justifiable that is) The capabilities in many cases are not instantaneous due to many unknown and previously unrecorded consumption by shift, machine, or job. After, typically a month, the reporting that is generated from transactions can begin to provide the parameters that can be established for specific jobs, shifts, machines or other user defined fields. It is implementing this previously unknown information into the control aspect of the machine that will lead to consistency and budgeting capabilities by item, job, or other defined field. If data does exist that is accurate on usage per shift on a specific job, then these items can be programmed with limits at the time of implementation. The better the information, the further down the line in in-depth utility of the software capabilities one can implement.
When one can control the amount of material that is dispensed for a job, then excess consumption can be halted before other associated negative effects can take place. Effects such as: scrapped parts, loss of production time, delayed parts processing and job completion time. When excess materials are required, that is a red flag. It is an indicator that something is wrong. It can be a number of different variables but it requires immediate reference to a supervisor or production engineer to review the conditions that is leading to excess consumption. Usage limits will refer the user to a supervisor for additional tools. In other words, the software and equipment solution will stop the significant contributor to loss production, scrap and delays. So, not only will an inventory management software and equipment solution provide you with the ability to budget what has been accepted as a common variable but you will also be minimizing a menacing condition within manufacturing.
Many companies today are jumping on the bandwagon of installing vending machines that has an inventory management software. It seems like some companies are dropping them off at every street corner. However, what I experience and see is an anemic implementation and support of the solutions. Unfortunately, what could be a significant benefit to a manufacturer is only scratching the surface of the capabilities, both cost savings and productivity. It is like having a Swiss Army knife and only using the scissors.
DGI Supply is one of the most experienced inventory management focused industrial distributors. With over 15 years, with hundreds of installations, DGI Supply with AutoCrib provides all the advanced capabilities that literally can produce over time, 80% or more in reduction in consumption and expenditures of production consumables. It is a given, that putting production consumables in a control device is like putting the lid on a cookie jar. It will reduce your consumption 20% or more. DGI's been doing that for years and have grown beyond that feature alone. DGI and AutoCrib focus on the advance capabilities that eliminate the budgeting issues, misused tools, excess usage, unauthorized tool use and many more variables that plague effective inventory management.
My recommendation to industry is to seek out suppliers with the most experience, who have learned from experience, the best and most effective installation practices. Seek out distributors who not only talk about the advanced capabilities but understand and illustrate how to implement them to your needs.
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This article was written by John P. Merk, the Director of National Accounts for DGI Supply, one of North America's largest industrial distributors focused on inventory management solutions. Mr. Merk brings over 25 years of industrial knowledge and specialist capabilities. For additional information on inventory management solutions, consulting, webinar signup or specific need, go to http://www.maximizedsavings.com or email at jmerk@dgisupply.com.
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