Written by: Paul Van Metre

It’s important to your clients that when they decide to work with your shop, that it’s the least risky thing for them to do. So when you can provide concrete examples of how you can reduce their risk, and make their lives easier, they will keep coming back and doing business with you.

I recently learned of a great, real-world example of how a customer of ours was able to provide much greater customer service to a client of theirs because they were paperless.

Getting a Panicked Call from a Client
Bryan, the owner, was driving home from work recently. He got a panicked call from a client who realized that they had sent conflicting information on their 3D model and their 2D drawing. There was a precision hole that was modeled one size on the 3D model, but the 2D drawing showed it with a different size. They needed to know if they had machined the parts yet, and if so, which size they had machined the hole to. As I said above, clients are relying on their vendors to have their back, and reduce risk and stress. So how you can respond and support them is critical.

What Would have Happened in the Past
In the days of the past when Bryan’s shop was run on a legacy “Job” type shop management system with paper travelers and zero ability to natively manage inspection records, he would have had to either turn around and drive back to the shop (and be late for dinner with his family), or more likely, wait until the next day to provide an answer. He would have needed to find the job on the shop floor, leaf through the pages of the job traveler packet, assuming there was a paper FAI or in-process inspection sheet with hand written results, and figure out what size they had machined the parts too. It would have been a few business hours later, and Bryan would have spent some of his morning figuring this out so he can call his customer back to provide adequate customer service. 

What Bryan was Able to do to Help His Client
Thankfully, in the current day, Bryan’s shop has completely eliminated all paper off the shop floor: there are no paper job travelers, no paper inspection sheets, and nothing to chase down to find the answer his customer was needing. Instead, Bryan pulled over to the side of the road, opened up the web browser on his phone and logged into ProShop. He quickly found the Work Order in question and clicked onto the FAI inspection results page and found the actual measured size of the hole in question. He was able to give the customer the answer he needed within a couple of minutes of their phone call, all without hanging up the phone, on the side of the road. He could then continue home and make it in time for family dinner, having only spent 3-4 minutes in total helping his customer get the answer they needed. 

Imagine the difference from the customer’s perspective on the results of the two scenarios outlined above. In the first scenario, the customer would be getting average service depending on how soon the next day they got their answer. Nothing special or notable.  But with the second scenario, Bryan was able to give them exactly what they needed from the side of the road in just a couple of minutes. That is impressive customer service! It reinforces the message that Bryan’s company is high-tech, data driven, on top of things, and can be trusted to be responsive in a meaningful way for the client! When the customer is deciding where to place work in the future, I’d have to believe that Bryan’s shop would have a nice positive checkmark in their favor.

What Next?
I never actually learned if the hole was made to the size the customer actually needed, but if it wasn’t, and needed rework or remake, the process in ProShop would have been to literally drag and drop a rework operation into the right spot, or possibly issue a new line item to the vendor for more material and issue a new work order. In either case, the clerical side of the work would literally take seconds and they could have been helping the customer recover very quickly.

Takeaways
It’s these small details that can make a huge difference in how a customer perceives your company. Being strategic in how you approach running your company can have a very impactful compounding effect in the long run. What might seem like the easy and least cost option in the near term, (less capable software, or do-it-yourself spreadsheets) can often be the most expensive way to manage things when you consider the longer term benefits of choosing to partner with a world class solution and the opportunities that will enable. If you’d like to discuss how ProShop can help you elevate your company, we’d love to talk.

Written by: Paul Van Metre

I’ll let you in on a little secret. Nearly all the problems with your late jobs will not be solved with “better scheduling software!” It’s not the software that’s the problem. It’s your company processes (or lack of them) that are the culprit. Scheduling software by definition must be able to run its algorithms (if it even has them) off of defined variables. When nearly everything is a variable, a software program can’t possibly account for that. This is why you’ve rarely if ever run across a scheduling software that actually works in a dynamic shop environment - and especially in job shops. 

Here are a small list of things that throws a big wrench in any scheduling software:

1. You go to set up the job and the material isn’t here yet.
2. After running your first part, you realize you don’t have a special thread gauge you need for the FAI.
3. You take a very hot order and subsequently need to expedite 3 other orders through outside processing to keep them on-time.
4. You decide to add a one-off evening or weekend shift to make up some time you need to catch up on.
5. You run out of a special cutter mid-production, or maybe it wasn’t even ordered in the first place.
6. At final inspection, you realize you cut some threads with a regular tap, when it was supposed to be an STI tap for Helicoils, and now you have to run a rework operation on a very overbooked machine.

These are scenarios that happen on a daily basis in most shops, especially job shops, and wreak havoc on any production schedule. There is no way to plan for them, and responding to them is very challenging to any software, So generally the schedule get’s so far off that it's useless and people give up on it and go back to whiteboards with magnets or their heads, which is a poor solution.

The real solution to all this mess, is to fix the root cause of all those problems in the first place. All the issues are solved by more thorough up front estimating and planning processes. And when those variables are largely eliminated, everything gets better. Jobs flow faster. Fires are extinguished before they ever ignite. Jobs ship earlier. Customers are happier. Stress reduces. 

The common theme to those six scenarios is that they are all reactive to a situation that could have been avoided with a more proactive approach to estimating, planning, materials management, procurement, job kitting, and really…everything that happens before scheduling.

I’ve heard from many shop owners that they don’t have time to be more methodical and proactive with their upfront processes. They want to estimate on the drawing with a pencil, shoot a price to the client with an email, and then quickly push the job into the shop when it’s won. They claim it’ll be too expensive to do it any other way. Then they spend the rest of the day running around fighting fires and avoiding phone calls from angry customers when their orders are late without any forewarning. Does that sound like a shop you know?

The goal of a more proactive approach to everything before the machining process is to eliminate variables, and allow the shop to successfully execute according to plan. That is a scalable process that will lead to long term success, on-time delivery, significantly higher customer satisfaction, profitability and company value.

Here are a few examples of a more processed based approach which will eliminate scheduling problems:

1. Estimate accurate setup/run times and outside processing lead times.
2. Capture all important flowdowns and key details in a structured way.
3. Quickly process orders and launch all long lead time activities in parallel.
4. Methodically build a plan to handle all flowdowns and customer/internal requirements so they support the schedule to deliver on-time.
5. Provide all relevant information needed to execute to plan to the employees doing the work
6. Make adjustments in real-time to ensure adherence to the plan

When strategies such as those listed above are employed, it’s remarkable how much easier things get, and how much less time it takes to manage the shop and the schedule. In a remarkable example of how powerful this concept is, consider the story of Trulife Engineered Solutions - a 80-100 person shop running 3 shifts per week and approximately 40 CNC workstations. They maintain a high level of on-time delivery and they invest about 1 hour per day to the activity of scheduling. The reason they can spend so little time scheduling such a large organization is because everything runs so smoothly. And this is precisely because they have dialed in those planning processes so well, that out-of-the-blue scenarios rarely happen and the few last minute changes that do spring up are easy to incorporate and adjust for.

How Can ProShop Help?
Most ERP systems have little to no functionality to have structured workflows to make the above items a core part of the company process and help ensure all of those important details are managed. The net result is that it’s generally managed with spreadsheets and paper documents. ProShop flips this idea on its head and has deeply integrated features to ensure compliance to flowdowns and proactive planning to ensure that accurate targets are set, and that your team can execute to plan with the minimum of effort. The net result is high on-time delivery numbers with a lot less time investment and stress. Sounds like the type of shop that most owners envision having. If you’d like help getting there, we’d love to help! Please reach out to us.

Written by: Paul Van Metre

The higher up you serve clients on the value stream, the more regulatory compliance you need to deal with. There are also more client flowdowns, quality requirements, standards, etc. you need to track, analyze, digest and understand. It can easily add up to many hundreds of pages of documentation - an enormous task to digest what actually matters for the orders you’re processing. It’s important for the organization to research and communicate just the relevant parts of those documents to your team. Without a process for handling all those requirements, things can easily get missed, causing major issues with scrap, rework, rejections from clients, schedule impacts, etc. - all very expensive mistakes that can significantly affect company profitability and unhappy customers. It can get ugly in a hurry! Another byproduct of not having a good system is an overcorrection and well intentioned people spending way too much time reviewing the same documents over and over, trying to ensure things get handled correctly.

Requirements come in from all sorts of different areas including:
1. RFP/RFIs
2. Customer Purchase Orders
3. Drawings/Engineering Data
4. Contracts
5. Regulatory Standards
6. Customer Flowdown Documents

Anytime that a document or requirement is referenced in the course of executing on a scope of work for a customer, it’s essential to distill the requirements down to the most essential things that people must know and understand. And to exclude things that don’t apply. Then, to ensure that solutions for every requirement will be implemented at the point in the process where it makes the most sense.

EXAMPLE
The customer drawing that references a workmanship standard document published by the customer such as this:

Note: Surface A is cosmetic per current revision of Acme Workmanship Standard AM-4212 Clause 13.

Of course you need to make sure you always have the latest revision of AM-4212 and ensure it’s available to your staff. However the most effective solution would be to have one person review AM-4212 Clause 13 and summarize the requirements in a very accessible place (like on the drawing, or an attached page) so that other team members can easily see that without having to look up AM-4212 every time they need to confirm how to meet that requirement, such as during planning, programming, in-process inspection, final inspection, etc. The cosmetic requirement should then be added to the inspection plan, and the work instructions that might affect surface A or downstream of it.

Back in our shop, we called this the Requirements Distillation Process (RDP). It was a formal process that happened with every new PN and order we received. While it took a bit of time for each new order, it saved vast amounts of time further down the process, and virtually ensured that we wouldn’t get bit by a requirement that slipped through the cracks. Sometimes a summary was added as a supplementary page to the approved drawing that was easily accessible by everyone, and had ALL and ONLY the pertinent information for the order that was pulled from all the related requirements and documents. It was also important to note that we didn’t summarize requirements that would automatically be handled through our standard procedures. That would be overkill.

Here is a summary of the process we used.  Note, we used our Process Development feature to document all the requirements:

1) Establish Requirements:

Review all relevant documents (Customer PO including all referenced documents, Sales Tie-In, WO Notes, Part Notes, Customer Contact page requirements, Statutory and Regulatory requirements, Client Flowdowns) in order to distill each requirement down to a summary of only the pertinent information.

2) Document Requirements:

Note: Documenting requirements is only necessary if items cannot be addressed and completely "Implemented" IMMEDIATELY.  If requirement is already documented within the part level itself, Process Development is not required.

List each requirement (1 per row) in the Description box Under Process Development for the part#. Consider adding the Spec # the requirement is from.

List the action that must be taken to ensure there is a plan to deal with this requirement and that the requirement will be verified during the process. When multiple actions are necessary for a given requirement, each action should have its own Solution row.

Resolve with Sales/Estimating any requirement that does not fit the estimate within "reasonable limits" (i.e. extra costs, extra processes, additional resources, etc). Document the action/resolution in the Solution box.

Check off RDP in Section 1 on PP Checklist when all requirements have been Documented.

3) Update the "Process Dev Status" as actions are completed.

Once the Process Development was completed, it was certain that all the requirements would be handled by the right person down the line, and we wouldn’t get bitten by an oversight. It helped us perform at a very high level for our clients such as Northrop Grumman, General Dynamics, Boeing and others. I’m not sure how we could have managed life without it!

How Does ProShop Help?

Besides the aforementioned Process Development feature, it’s very simple to link all required documents in the correct place depending on the type of document. It could be linked to the client record, in the Documents Module, the Standards Module, at the Part Module as an inspection requirement, or any number of other places. Because ProShop was built in a Tier 1 and 2 aerospace and defense contractor, it was essential that we had extremely robust systems for managing the significant complexity of the design engineering and manufacturing processes we engaged in every day!

Written by: Paul Van Metre

In 2022, nearly every shop is dealing with dramatic increases in raw material prices. Some types of materials are going up faster than others, but nothing is immune to the disruptions in supply chain stemming from various Covid-19 supply issues, as well as the war in Ukraine, and the simultaneous increases in demand as the global economy recovers from the pandemic and demand is at all-time highs. It’s a recipe for high prices which can have a lot of negative effects on suppliers in the metalworking industry who make precision goods out of raw materials. However, there are some simple steps that can be taken to mitigate the risk of increases.

1. Ensure all of your customer quotes include Terms & Conditions about your ability to pass through raw material price increases. Because all vendors are being affected by price hikes, the end customer will hopefully be understanding that this is entirely outside the control of its suppliers and be willing (possibly reluctantly) to pay for higher raw material prices. But you must include verbiage on all your quotes that your prices are only good for a fixed amount of time, or are quoted with material at a certain price in effect when the order is placed. Without this escape clause, you won’t have much to fall back on when you get quoted a higher price on your materials when you go to buy it. (If you find yourself dealing with price increases without any clauses to protect you, it’s always worth going back to your customers to see what they are willing to do to help you out.)
   
2. Do a careful review of prices quoted vs. prices in effect when the order is placed. If you quoted a job 6 weeks ago at a given price for raw materials, and you did include some T&Cs about material prices, the next step is to ensure you aren’t letting those possible price increases slip through your fingers. That means including a formal process for comparing what the price was that you quoted your customer, and what your vendor will actually charge you when you place your order. If you don’t include this formal review as part of your documented and standardized process, you’re sure to forget and lose the opportunity to change prices upon contract confirmation. An order entry/confirmation checklist is a good way to ensure you don’t forget this important step. (Tip - for many buyers, price changes are easier to swallow, if you keep your unit price the same, and quote a variable “material surcharge” or something similar.  It allows them to maintain the unit price inside their ERP system that they are graded on, while giving a different GL code bucket in which to account for variability in material costs.)
   
3. Get several quotes from your vendors.  Don’t assume that your favorite or closest vendor will always be your best option for buying raw materials. It’s a responsibility of you as the vendor to get at least 3 price quotes from your raw material suppliers. Ensure you document and save all those quotes in a way that is easy to retrieve and review, with quote numbers, lead times, expiration dates, etc. so you can cover your bases and ensure you have the information you need to decide where to buy that material if you win the order. Don’t be shy to have conversations with your vendors about their pricing in comparison to the other material quotes you’re receiving. If a “preferred” vendor is recently ending up with the highest quote where they weren’t previously, talk to them about the factors affecting them. See if there are options you can leverage to bring costs down (an example is blanket orders, talked about in item 5 below).
   
4. Discuss creative options with your customers. Especially if you support production quantities of products that are made on a recurring basis, your customer should be able to provide some kind of forecast, or you can predict future demand based on historical demand (I fully understand this is an inexact art!). Those forecasts may be enough to put some action plans in place to mitigate material cost increases. Clients are often open to discussing creative ways they can control costs. They may be willing to have you pre-buy (ask if you can invoice for the materials in advance so you’re not floating the cash for months) the raw materials in advance, or to even buy the material themselves and have it shipped to your facility. The key here is to be completely transparent about what you’re seeing and experiencing. Most clients (at least the good ones worth keeping) want to ensure their vendors are financially stable and can continue to support them in the long term, and of course they want to keep costs down, so they have an incentive to work with their vendors to come up with options to minimize cost increases. A creative idea I recently heard: a shop proposed to their customer was to renegotiate a temporary reduction in the customer’s payment terms. The customer had a standard Net 60 payment terms with the shop, but the shop needed a more readily available cash flow to purchase some larger quantity material buys. An LTA with the customer wasn’t able to come together fast enough to leverage current market pricing before it increased, but the buyer COULD temporarily agree to Net 30 terms. The quicker turn on paid invoices helped the shop with their cash flow limitations and they were able to maintain pricing with the customer, which otherwise would have resulted in a re-quote when the customer re-ordered with them. Because the shop and the customer both had a good relationship & were transparent in their needs & limitations, they found a solution that worked for both of them. 
   
5. Consider blanket or Kan-Ban orders with your vendors. Even if your customer isn’t willing to pre-buy or provide raw materials, there are often arrangements you can make with your material supplier to help reduce cost increases. Based on the forecast or history of your client orders, it may be worthwhile to place long term blanket orders with your vendors. If your customer forecasts or blanket orders with your company protects you for a certain amount of inventory or WIP, then it’s a pretty safe bet to do the same with your material vendors. If the purchase is at your risk, then it’s worth weighing the risks of possible client cancellations or changes vs the cost savings of locking in prices before they increase in the future.

Hopefully some of these 5 tips will help you to recover possible increases in raw material prices, or protect you from future increases. If I could summarize the key element it would be communication. Communicate with your clients and vendors and within your own team. The more discussions you have, and share transparently, the more solutions will likely come to the surface. Your customers do have a vested interest in making sure that the long term health of their supply chain is intact. And if they don’t seem to feel that way, it’s worth considering if they are a customer you want to have in the long run. (See our recent blog post about this)

How Can ProShop Help?
There are a number of ways that ProShop can help with the 5 points above. Here they are in order: 

1. ProShop has a fully configurable quote T&C section with customizable lines that can be included in all new quotes and checked or unchecked to include or not. Or they can be copied from templates within the estimating module.  So specific clauses about material escalations can be included for many use cases to make sure you’ve covered all the bases.
   
2. When contract review is being performed, you can have specific team members automatically notified when new customer POs are created, or Work Orders are created.  Because there are no paper records needed, that review of price quoted vs. current material price can happen immediately.  It’s also a matter of clicking one icon to get the entire purchase history of a material so you can easily see how the price has changed over time. And of course, you can add the requirement to your WO checklist to make sure it gets done in the first place!
   
3. Every purchased item can have multiple approved vendors and easy places to document their prices, as well as attach their quotes so they are always at hand, a week or a year later. As always, attached files are securely stored in our proprietary storage system for safety and easy retrieval from only approved users.
   
4. When it comes to providing transparency to your clients, the data is all right there and connected in a way that makes it easy to find and retrieve. We can’t make the phone call for you, but we’ll help you back up the conversations with data. If you can get them to provide customer-furnished-material, you can easily track the incoming receipt of that material and all the certifications it may come with, for automatic retrieval and collation when it’s time to ship the product back to them.
   
5. You can issue blanket material POs to your vendors, with the correct dates and quantities you want to receive. When each shipment comes in, it’s simple to track the certs, receive the shipment and generate a vendor bill for your AP process. And any future changes and adjustments are easy to make.

Written by: Paul Van Metre

Every shop I know can’t find enough skilled staff like machinists & inspectors today. And, it's getting worse! I’ve been hearing this from nearly every shop I speak with in the past year. I recently attended the annual NTMA Engage Conference where I saw an AMAZING talk on this exact topic. It was given by Chris Czarnik, who wrote the book Winning the War for Talent. His ideas about hiring and the labor market are so spot on, and many of the ideas in this post come from his talk. They are very much in alignment with the practices we used in my shop, and today at ProShop. If you have an hour to watch it, I highly recommend it! It’s insightful and funny.

It’s a certainty that there will not be enough people entering the workforce in the coming years to fill all the positions - making it even worse than it is today.  Which puts companies in a position to need to get creative in how they recruit, onboard, train and grow the talent on their teams. Many companies are stuck in the past with their hiring practices, and the need to update their processes couldn’t be more important. They post a help wanted ad in their local Craigslist, Indeed, and numerous other places. They describe the minimum requirements, pay ranges, and preferred experience. And there they get lost in the sea of dozens or hundreds of other job listings for the same type of jobs in their region. Does this sound like your shop? How is that working for you? Probably not very well. As Chris recommends, pull out your phone and look for your ads. What do you find? It’ll probably be an eye opener.

Job seekers are humans with their own personalities, desires, needs and concerns.  As the Great Resignation has shown us, people are tired of working in jobs they don’t like and they want more meaningful work. You can likely provide that work for the right people. So making job ads that speak to them, draw their attention, and stand out from the crowd is vitally important. Once you’ve attracted their attention, you have to deliver the goods, some of which we’ve discussed in prior blog posts on how to attract employees, and mitigate the lack of machinists. 

Start with learning more about your current employees. Ask what they love to do in their spare time, what jobs they had in the past that they loved or hated. Do they like working on their motorcycle or woodworking projects, or playing video games?  Study and learn about various personality profiles like Meyers Briggs and DISC. As Chris points out, ISTP types (aka Virtuosos) often make great machinists! (I happen to be one myself). They are logical, like working with their hands, good under stress, are independent and love to solve problems.  Sounds like a good machinist in the making?? You bet! So use that language in your job postings! It’ll help your listings jump off the screen and stand out from the rest.

Aside from piquing their interest based on their hobbies and interests, it makes sense to appeal to them on a human level. As our incredibly wise Chief Human Resources Officer Adrienne always tells us, “People are attracted to companies where the corporate culture reflects the values they hold as individuals. People want to believe in, and join, a company that respects them in the ways that are well-aligned and meaningful to them.” It’s important to figure out what you can offer your employees in terms of a relationship; is it loyalty? Is it integrity? Is it a fun work place? And then you deliver on that consistently. People are your most precious resource, and if they know that right from the very first interview, you’re sure to top their charts. It’s worked for us; we’ve more than doubled our team in the pandemic years.

There are lots more great tips in Chris’s speech, so I’d recommend watching it. For the relatively small time investment of learning more about doing this well, the returns you’ll see in improved recruitment will make a huge difference in your company’s ability to scale with the staff you need to serve your clients.

How can ProShop Help?
Honestly, probably not as much in this area as with many others.  Once you’ve recruited some great people, we can help you provide a very well structured onboarding and training process for new employees with our training module. We can help you provide a modern paper-free shop floor, eliminating the frustrations of lost travelers, missing setup notes, and tribal knowledge. When you can attract enough of the right fit employees, and provide them with an enjoyable work environment and show you care about their development, you’re one step ahead of many other shops and can help your shop and all its various stakeholders to thrive.