by Steve Campbell, contributing editor
Global competition in manufacturing is fierce. Nowhere is this more so than in the automotive industry, where the twin pressures of declining prices and increasing demands for quality and variety are forcing manufacturers and their suppliers to constantly look for new ways to cut costs while also improving the quality and scope of their product offerings. It's a constant challenge to keep improving in a world where staying in the same place means you could lose market share.
For Listowel, an automotive parts supplier based in Ontario, the opportunity to make progress toward all these goals drove the company to upgrade its shop floor data-capture and information distribution system over the past year. The results have been rewarding: a drop in shipment labeling errors from 40 per month to less than one; a reduced need for inventory counts from once per month to every three months; and a significant reduction in clerical work in the 450-strong workforce. In summary, Listowel has improved its employee productivity.
"The increasing scale and complexity of our product offerings presents a challenge to staff and was leading to errors that required additional follow-up manual efforts by staff to correct. Sometimes our employees would end up redoing one transaction three times, adding to our costs," notes Chris Poland, IS manager at the company, which makes plastic injection-molded glove boxes, dashboards, center consoles, and kicker panels for assembly into SUVs, sedans and minivans.
1.5 million transactions a year in a complex, fast-paced work environment
Twenty trucks a day are used to deliver these parts from Listowel, and the company completes some 1.5 million transactions annually. With 125 different styles and colors, and more than 1,400 labels produced each day, the work process is complex and fast-paced. In all the activity, it can be difficult for staff to tell quickly which part should receive which label. Mistakes can be made -- misidentifying a part and putting the wrong label on the shipment, for example -- and this costs money to rectify. Automating the data collection and information distribution to and from the shopfloor greatly reduces or eliminate the errors.
"We were mislabeling forty internal parts shipments per month, and also had significant inventory-management issues that we had to allocate clerical staff to deal with," said Poland. "It was time to upgrade to a data-capture system that would address these problems and enable us to continue expanding our quality and product offerings."
Finding a data-capture technology that would help eliminate the errors
As their old data capture system was unable to address their new needs, the first step for Listowel was locating a supplier that could deliver the specific features they wanted for their ERP system (Glovia, in this case). A search on the Internet found the eventual supplier, Epic Data (www.epicdata.com), and its open-source Java-based eXpresso software platform. eXpresso meshes seamlessly with any ERP system and integrates a wide variety of hardware and software products.
"We required a number of very specific application enhancements for our transaction processes, all of which were achievable with eXpresso," notes Poland.
"The Listowel challenge is typical of what most customers need," says Greg Watkin, vice president of marketing for Epic Data. "All companies have unique business processes and IT structures, so they need a data-capture and information distribution system that can be molded to those existing processes and priorities, and integrate them. Being flexible is one of eXpresso's strong features."
"The enabling eXpresso technology allows customers to develop the specific applications they want. Typically, it involves automating additional aspects of data collection and then developing a system to make better information available to those who need it, further enhancing the speed and quality of work on the production line," adds Watkin. Another benefit is that it can allow an organization to unify its various standalone systems and eliminate the "islands of automation" by meshing the information flows enterprise-wide.
Improving accuracy and speed a key deliverable in data collection
In addition, he had a variety of other objectives. For example, he wanted to be able to visually show employees the production and scheduling reporting on screen, provide three on-screen "verification" pictures of the parts to be labeled and shipped, and provide employees with easy online access to the help "binder." A key deliverable was being able to show on screen three different photographs of the part to be labeled to the employee, to reduce the potential for error.
Scrap reporting was another transaction that needed to be upgraded. This involved keeping close track of the scrap and wastage the material company generates, with the idea of tracking the cost of waste and its resale into new markets. This would enable company analysts to understand material costs better and, potentially, reduce the amount of scrap produced in future.
Internal paging to request towing of empty or full containers was an issue. Previously, this was done through factory-wide PA announcements that were contributing to significant noise pollution. With the new system, the towing employee can be paged internally on his pager and directed to where his towing services are required within the manufacturing plant. This is done by sending instructions through the shopfloor terminals.
Inventory updates now occur automatically in real time
Inventory accuracy stood out as important at Listowel. The accuracy rate was at 78 percent, with monthly adjustment counts requiring 150 employees and costing thousands per month. The company's goal was to move it up to 93 percent and schedule inventory checks every three months. The savings just in changing from monthly to quarterly checks could add up to six figures annually. It would also make unnecessary label-verification work that was repetitive and ripe for automation.
"Previously, our inventory was reported manually, with the accompanying errors that occur when you have 1.5 million transactions per year," notes Poland. "Now, all inventory changes are recorded automatically in real time as the staff perform functions of producing parts. It's automatic and included in our business processes; no one has to think about it."
In addition, under the new system, the internal label errors have moved down from averaging forty per month to less than one. This was achieved by setting up the system so that labels can't be printed and removed from the computer screen until the staff member verifies the accuracy through scanning the part's bar code against the work order. The new system also prevents the pre-printing of labels, to ensure that double-checking always occurs.
Existing shopfloor PCs upgraded with PC-Client software
The Listowel data-capture hardware system is composed of forty wireless shopfloor PC terminals with accompanying Intermec 1800 Vista handheld scanners and 3400D printers. With the wireless feature, the PCs were movable and could be plugged into any electricity source. They were also still useful.
To make sure they could speak to the eXpresso software platform, Epic's PC Client software was installed, transforming the PCs into thin-client portals linked to the ERP system. Listowel upgraded the existing PCs to ensure the system performed according their requirements.
Overall, the new system has resulted in label-verification work being eliminated and a reduction of clerical work in documentation verification. "This is all non-value-added work that isn't part of the value chain for Lisotwel," notes Watkin. "The new system has allowed them to reduce costs or reassign people to more valuable tasks."
Many still waiting for advanced data capture solutions
Despite these obvious benefits, what's interesting is that many automotive suppliers still have not taken advantage of cost-saving technologies like bar codes, scanners and automated data collection software. That will have to change, and soon.
"I've been to a number of auto industry conferences and found some people who aren't even bar-coding yet," notes Chris Poland. "For many, bar-coding may appear to be new, but there are even more advanced and proven technologies out there. I honestly don't know how we'd work without using data-capture systems to cut our paperwork, errors and costs. If auto suppliers haven't checked this lean technology out, they need to."
This is because the value of automating shopfloor data capture and expanding two-way information flows runs deeper than just eliminating unnecessary work. Providing employees with real-time access to more and better information empowers them to develop more efficient and logical ways of doing things. Ultimately, that means an even leaner operation. Given the cost pressures facing today's automotive industry, this is an advantage that can't be overlooked.
Steve Campbell is a Vancouver-based writer and corporate communications consultant who writes for and about advanced technology companies. He can be reached at (604) 888-5267 or [email protected].
eXpresso Data-Capture Software Platform
eXpresso is Epic Data's open-standards-based platform for automated capture applications now being rolled out to manufacturing customers such as Listowel, Lockheed Martin and CAE.
"To become leaner and more efficient, the enterprise needs greatly expanded access to current information for decision-makers and staff at all levels of the company. That's a step forward for companies interested in improving productivity and making better decisions," said Epic's Greg Watkin.
What is eXpresso? Basically, it's a Java-based software platform that enables synchronization of data, real-time links, and the smooth flow of corporate information to and from any device or system within an organization.
"With eXpresso, the customer has the ability to adapt the software to fit their business processes, not the other way around. It provides significant flexibility and the ability to distribute information anywhere in the company and to any device in real time, without any problems crossing software systems," adds Watkin.
What kinds of information can be accessed? Epic's rugged new shop-floor MPT9100, fixed-mount terminals - now being installed, for example, in the Volvo Truck factory in Goteborg, Sweden - have a much larger full-color touch screen that is graphically-rich. This larger screen allows employees to access corporate Intranet information such as CAD drawings, policy and procedures, safety regulations, the corporate phone book - essentially, any information the organization believes should be available on the shop floor. The end result is that the company's storehouse of knowledge and experience is made more readily available to all employees.
"Given the critical importance to the corporation of its knowledge-management system, two-way information transmission is where data-capture technologies are headed. The MPT9100 and eXpresso delivers that value-rich information," concludes Watkin.