Aim For Improvement

Tippmann Pneumatics turned adversity into growth, and now it's improving its warehouse processes.

Public outrage over the attempted assassination of President Ronald Reagan could have spelled the end for Tippmann Pneumatics. The company, which made half-scale, collectible machine guns, could have been regulated out of business. Instead of giving up, founder Dennis Tippmann Sr. redirected his focus toward paintball, a sport in which players barrage each other with paint-filled pellets launched from “markers,” guns powered by carbon dioxide or compressed air.

Tippmann Sports (the company name changed in 2004 when it was sold to a private investment group) is now the leader in what IT Director Doug Spieth estimates is a $350 to $400 million market.

The company occupies a 30,000-square foot manufacturing space supported by a 40,000-square foot warehouse with four order pickers, a supervisor, a receiving clerk and an inventory manager. Initially, the company distributed its products through dealers, but today, it deals directly with a network of 3,000 individual stores as well as with mass merchandisers like Wal-Mart and Sports Authority.

The company's warehouse operations are basic, using lift trucks to collect and deliver raw materials to the manufacturing floor, pallets of finished products from manufacturing to storage and customer orders to the staging area for shipment. Since 1999, the company has used Microsoft Dynamics GP (initially Great Plains Software) as its enterprise resource planning (ERP) solution, executing the flow of components and finished goods through the system's inventory management module.

Tippmann normally manufactures 1,500 to 2,000 markers per day, each having about 150 raw components ranging from bolts and screws to injection-molded plastic parts. Only about 5% of components are manufactured internally. On arrival at the dock, the hundreds of parts were staged, counted and compared with the packing slip. The invoice would go to accounts payable, and the shipment would be keyed in to the ERP software.

Microsoft Dynamics offers an inventory management module, but it is entirely reliant on paper- and screen-based processes for receiving, inventory tracking and transfer and picking/shipping. As a result, inventory was tracked only to the warehouse level because the volume of transactions made manual bin-level control unrealistic.

Warehouse operations were not well organized, Spieth recalls, with raw materials and product normally placed on a space-available basis. When draw-down was required, either for raw materials and components for manufacturing or shipment of finished goods, warehouse personnel — most of them longtime employees with knowledge of warehouse geography — would visually search for the materials, pick the required product and deliver it.

When finished goods were returned to the warehouse from manufacturing, raw materials were relieved from the warehouse. The number of markers and part numbers they represented were recorded on paper, and this data was keyed into the system to adjust inventory records.

Then, in 2007, Tippmann implemented Accellos One Collect. This allowed the company to turn on Microsoft Dynamics' bin allocation capability, automate the end-to-end inventory management process and eliminate virtually all paper-based receiving, inventory management and picking processes.

“There was no easy way for us to do those transactions within the Dynamics GP product prior to the implementation of Accellos One Collect,” Spieth says.

Psion-Teklogix Workabout Pro hand computers communicate with Microsoft Dynamics over a radio-frequency network. Data is gathered, exchanged and transmitted to and from the ERP software each time raw material or finished goods are touched.

When materials arrive, warehouse personnel scan barcodes on the packing slips, revealing what is in the shipment and verifying the count. Microsoft Dynamics records the material as “on hand.“ Bin names within Microsoft Dynamics essentially provide a map of the warehouse, so when shipments are moved to storage, the material handler can use the scanner to tell the software exactly where they have been placed, using a real bin name.

Replenishment of work-in-process inventory maintained by manufacturing, formerly a complicated visual process, is now automated. When manufacturing bins reach a defined stock level, supervisors notify Microsoft Dynamics, and the software instructs the WMS to pick and transfer the needed material. Where formerly warehouse personnel would scour the warehouse to locate the requested parts, they now move from bin to bin, directed by hand-held computers. As they pick, inventory count is automatically relieved.

Finished goods are moved from manufacturing to the warehouse on pallets of 100 units, completely packaged with all printed customer support material. As pallets are transferred, they are assigned a location under a single identifier for all units on the pallet, raw material inventory is duly relieved and finished goods inventory is updated.

As sales orders arrive, they are pushed to the warehouse floor. The system checks serial numbers on the pick lines and directs the pickers to specific bin locations until the orders are filled. The product is staged at the shipping dock, inventory reduction is recorded, shipments are recorded against sales orders, invoices are prepared and the product moves out the door.

Tippmann increased productivity with fewer personnel after implementation. In 2006, for example, the company shipped an average of 217 orders, representing a total of 806 lines picked per day. In 2007, the numbers for the year again showed an average of 217 orders but an increase to 912 lines, representing an expanded number of SKUs and more SKUs per order. The efficiency increase relates directly to the newly automated procedures, Spieth says.

In estimating return on the system's purchase and installation, Tippmann looks at a single factor: the value of physical inventory shrink. Pre-2007, the company conducted two inventories per year, with 20 people spending three days and usually uncovering inventory shrinkage of between $100,000 and $150,000, most of it traceable to bad or missed transactions.

Since the implementation, Tippmann has taken inventory only once a year and has seen shrinkage drop to under $10,000.

“We're now 99% accurate, we can identify and solve problems quickly and we can conduct transactions between manufacturing and the warehouse in real time,” summarizes Spieth.

Victor Wortman is a freelance writer based in Santa Monica, Calif. He can be reached at [email protected].

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