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Author: Paul Van Metre

“But Paul, it’s too expensive to put a computer at each of my work centers! I just can’t afford that. Right now my employees track their time with a shared computer we already have out in the shop.”

I hear this objection all the time when discussing what’s involved with going paperless and using ProShop. They are typically using just paper only, or another paper-traveler-based ERP and they have a couple of shared terminals in the shop to track time and log parts on their jobs. On the face of it, it’s a legitimate concern. If you spend $350 on a computer and mounting hardware for 15 CNC machines, that’s over $5K! That’s a good chunk of change. But let’s dig into the real numbers and see if it is actually that expensive

I’ll start by giving credit to Gary Connor for his awesome article on the "ROI of Lean". His article was inspiring to me for being such a succinct and easy-to-understand approach to calculating the ROI of removing waste from an organization. I highly recommend you read it first.

Many shops have a paper-based ERP system, with shared terminals placed throughout the shop where employees can go scan into and out of a job, log the number of parts they made, etc. It’s a straightforward process and one they’ve done for years, so they are comfortable with it. But, as Gary points out, if they crunch the numbers of the cost of this activity, they may think differently about it.

Let’s use a typical example of a shop with 18 machinists - 15 on days, and 3 on nights. (These numbers came directly from a Coastal Machine, a ProShop client who recently went fully paperless in the shop.) A low volume, high mix job shop. On average, each day, the employee has to go to the shared PC three times with an average of 2 jobs per day, once at the beginning of the day/job, and once at the end of the first job, where they also log into the second job, and then lastly once at the end of the shift. The process of walking from the CNC machine to the computer, doing the work at the terminal, and walking back only takes 3 minutes. (They say this is a very conservative number! We all know that those trips across the shop will invariably include stops to talk with someone, grab a coffee, or something else - and it could easily be 5-10 minutes before they get back to their machine!)

So those 18 machinists, running 5 days a week, with 3 round trips to the computer to track time/parts per day, multiplied by 3 minutes per trip, that’s 810 minutes per week, 13.5 hours per week, or 702 hours per year. At $30/hour per employee, you’re paying them a total of $21,060 per year just to walk back and forth to track time. And at $125/hour for machine time, that is $87,750 of lost revenue per year! So you’d be able to pay back the cost of the computers in about 3 weeks!

And this is just a drop in the bucket compared to the real cost of having machinists leave their machines to look for tooling, fixtures, job travelers, etc. By providing all necessary items, kitted, and prepped at a machine, along with digital visual work instructions, and digital inspection forms, it’s very possible to cut 50% or more out of a typical setup time. You can read a blog post about that here, and watch a webinar about it, and download a PDF guide here.

So in summary, the real cost of paper-based workflows, and shared computers is the mostly hidden cost of lost revenue and paying your employees to walk around your shop. You want them to keep your spindles turning as often as possible and making chips! Small investments to achieve that goal will always have a very positive ROI.

Author: Paul Van Metre

When you get a new order in your job shop, the clock starts ticking. You’ll never have more lead time to get that order delivered on time than you do today.  Customers want everything faster these days, yet everything seems to take longer.  Raw materials take longer to acquire; outside process lead times are lengthening.  It’s imperative that you get things moving as soon as possible while also following a thorough and robust process for risk mitigation, contract review and order confirmation.  When we ran our shop Pro CNC for over 17 years, we continually worked to refine this process making it faster and smoother.

The key for us was getting the order in front of the right people as fast as possible who can make the important decisions about what needs to be done now, what can wait a little bit without compromising risk, and what really needs to be vetted by others before making any decisions.  If the work is repeated and has been made in the shop before the process can be dramatically short-circuited.  If it is brand new work, it’s more critical.  Here are some key items to consider.

1 Launch every item that has a long lead time that may impact delivery. Raw materials, custom tools, special hardware or BOM items can all be on that list.  If your engineering/manufacturing departments aren’t involved with the estimating process, then it is critical for them to review the estimated plan and either confirm or change the plan.  Once this is done and specific details about those long lead time items are well defined, then get them moving.  Issue POs to your vendors on the spot or immediately after the meeting.

2 Make sure the equipment specified in the estimate/shop plan is correct and that it will available when needed to make delivery on time. Are there any special tools, fixtures, and inspection equipment you will need, and will it be available when the job is running? To the best of your ability, confirm you’ll have the staff you need at the time for set-ups, inspection, running, etc. Make contingency plans if any of them seem at risk.

3 If you don’t already have firm quotes from your vendors for purchased items or outside processes, send out RFQs now asking for price and lead time. You may gather valuable information that could derail your plan later in the process which you can make contingency plans for now. Make sure this information is stored in a way which is accessible to everyone that needs to know it down the line.

One way to do all this work quickly we called the War Room – This is a process where key stakeholders gather and review all incoming jobs within minutes or hours of a customer purchase order being received. Staff from engineering/manufacturing, quality, planning, estimating and customer service or sales should attend this.  With a well-defined process these meetings can be fast and nimble.  It is a great place to get buy-off from all departments for risk mitigation and contract review.

This work can also be done in parallel rather than in a group. But ensure that it happens very quickly.  Install systems that facility quickly finishing these items and make sure people are alerted if something is sitting in the system too long.

We eliminated individual offices and everyone sat together in one room so communication was as fast as possible. Walls are barriers to fast throughput.

Before this process is even done, make sure the next departments that will be working on these jobs know they are coming.  Whether it’s detailed programming work, QC/QA review, or any other department in your company workflow, giving them advanced notice of work flowing into their queues will allow them to best plan resources and ensure your jobs have the best launch into manufacturing.

Our shop management system ProShop has tools built-in to handle all of these processes and ensure that nothing is waiting so you can cut lead times, get your work flowing faster, and focus on throughput.  But these common-sense principles can be applied to any company using any system.  The important part is continuously improving your process and focusing on performing better for your customers every day.

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