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By: Paul Van Metre

[/vc_column_text][vc_column_text]The topic of time tracking in job shops is a sensitive one in many shops. Machinists and others sometimes feel that time tracking is nothing more than “big brother” watching them, looking for mistakes, or ways to get them to work harder. Trying to get these shops to adopt time tracking seems like a daunting task, with a lot of pushback from employees who insist they won’t track their time. These employees have some power because it’s hard to replace a well-experienced machinist these days. As we described in a previous article, there is a significant lack of skilled machinists in the trade, so shop owners are reluctant to do something that upsets their employees. Also, in many shops, there is a precedent of time tracking being misused for the wrong reasons during a failed past attempt, and employees being rightfully reluctant to track time again. I’ve even heard from shop owners that they don’t want their employees taking the time out of their day to track time. They feel that tracking time isn’t worth the time to do it, and they’d rather have their employees spending 100% of their time “making parts” rather than spend even a few minutes per day to track their time.

In other shops, they’ve solved this problem, and employees willingly track time. Shop owners have used the right approach to get employees to understand the importance of doing so, and the owners themselves use the time tracking data effectively to help improve the company to the benefit of everyone in the organization.

The fact is that time tracking is one of the most important activities that shop employees can participate in. The old saying “you can’t improve something that you don’t measure” is highly applicable in this situation. Without good data on how long different jobs and activities are taking, it’s nearly impossible for shop managers to do their jobs well, which creates a dynamic where both parties rely on each other to do their jobs to the best of their abilities which only helps the shop improve.

 

Time tracking is essential for the following activities:

  1. Scheduling - Scheduling of jobs is one of the most important challenging activities a shop must be good at to have a high on-time delivery rating. Time tracking is essential to accurate scheduling. Scheduling for new work orders is based on the estimated time to set up, inspect and run production on the various work centers needed to make those parts. As the job moves through the facility, it’s important to know how much time has been spent and how much is remaining based on the best estimate available. This is only possible with all employees tracking time so the schedule can be as up-to-date and accurate as possible. This data is also used to make bigger decisions about hiring, buying machines, etc.
  2. Estimating - Even the very best machine shop estimator, or estimating software is never 100% accurate. The process of improving the accuracy of estimating over time is contingent on having employees track the real-time it took to do those jobs, and that data is fed back into the system to improve the estimating accuracy for the next time the job is run or the next similar part that needs to be estimated. Anything more than a gut feel will require time tracking data collection from the employees who worked on those jobs. Even better would be noted to describe what happened during those labor hours and why work orders took longer than expected. Having accurate estimates that the shop employees trust is absolutely essential to the success of any job shop.
  3. Job Costing - At the end of the day, fewer things are more important than accurate job costing. The number of shops that have no idea how profitable or unprofitable individual jobs are is astounding to me. Since labor is typically the largest cost in any job shop, accurately calculating the cost of labor hours is highly important to achieving accurate job costing. Accurate job costing allows shop management to make smarter decisions such as what to do with jobs that are unprofitable, either increasing the price, working on improving the job, or getting rid of the job. At our shop we called this process “kill the losers”, and in any shop floor, a well-managed job tracking process to improve or get rid of bad jobs will result in a profound improvement in overall profitability which should benefit everyone.
  4. Employee Evaluation - This is one of the reasons that employees are reluctant to track time. Good employees shouldn’t be afraid of this, and in fact, they should welcome it, because the good employees have nothing to worry about, as they specifically will benefit from a good time tracking system. It’s the bad employees who will eventually be weeded out when a thorough time tracking system is put in place. When the employees who care about the company's success are left, it creates a more positive culture that benefits everyone.

 

Tips to Getting Buy-In on Time Tracking

If your shop employees are reluctant to time tracking, here are a few tips to get them on board with the idea:

  1. Explain the reasons why time tracking is important. It’s not because you want to monitor their every move, it’s because of all the reasons above. It’s critical for the success of your company. If they care about the company, they should understand this. It will also be good for the employees when their formal evaluations and considerations for raises come up.
  2. Offer a cash bonus. For a couple of months offer some cash or a prize to the employee who does the most time tracking. It doesn't need to be a big amount, just something to get their competitive juices going, and something they can look forward to. Then give a smaller amount to everyone who participates as well as the winner.
  3. Pizza party for a company goal. Set a goal for total time tracking for the company and offer to bring in lunch for the whole team. Start low, maybe 60%, and then increase it 10% over time. Once you’re at 90+% and you’ve provided 4-5 free meals to people, there will be a more positive attitude about time tracking. And you’ll have amazing data to help the company.
  4. Say "thank you". When you see an employee doing a good job at tracking time, a genuine 'thank you' and a pat on the back will go a long way. Also, make a point of thanking them publicly as well at company meetings and events.

One last important point is that it’s crucial that shop management doesn’t misuse the time tracking data to beat employees up or make them feel like the data is being used against them. Nothing will torpedo this important initiative faster than misusing the data and not bringing an empathic understanding to analyzing and discussing the data with the team. When time tracking and the data it provides are used constructively, and those positive improvements are shared with employees, the natural result will be a virtuous upward cycle that benefits all the stakeholders in the shop.[/vc_column_text][/vc_column][/vc_row]

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By: Lacey Hill

[/vc_column_text][vc_column_text]For a prospective or existing customer, a shop tour is an excellent way to connect with their supply base and review the operations, systems and processes of a given supplier. For a supplier, this is your opportunity to shine; showcasing your capabilities, workflows, daily operations, ERP system, quality management systems, skilled staff, etc…...OR this can be a moment where you fail fast.

Paul Van Metre recently wrote a blog post titled Use Your Machine Shop Management System as a Sales Tool that directly relates to this. In that post, he states “shops can’t just promise great quality and delivery. They need to prove they have the processes and systems to guarantee they will execute. This will open doors to more discerning clients.” Paul, and a few of our ProShop clients, go on in that article to talk about how showing customers their ERP system, and discussing the workflows that are supported by it, can be an excellent sales tool. Also, I can attest to that from the first-hand experience, from the customer perspective.  

Before joining the ProShop team, my career was in the supply chain field as a Buyer, Purchasing/Planning, and Supply Chain Manager, and I conducted a lot of supplier onsite tours in that time. I quickly learned that with some very simple questions I could glean a lot of information about key areas of a supplier’s business. Also, I could see how robust their shop management systems were. 

If you aren’t using your ERP system as a sales tool yourself, OR if you lack a solid ERP system (or any structured system) to run your business with, then hopefully the following 4 examples will help you see how those can be key to maintaining your current customer base and growing it!

Below are 4 examples of simple questions, broken out by a subject area, that demonstrate what information can be obtained from how the supplier answers the question, and what steps they use in answering it. 

1) Resource Planning 

Customer question: “Can you tell me where job # 1234 is?” Does it look like it's on track to deliver on time?”

What information can be obtained from this question: 

Steps followed to answer, using shop management tools:

  1. With one or two clicks in the system, you can look up a Customer Purchase Order (PO) # or Part Number and see the Work Order (WO) # or job traveler # associated with it.
  2. From there in the system, you can pinpoint what stage of completion the order is in. In addition, you can provide the customer with an outline of the remaining processes and operations still outstanding, the lead time to complete them, and how you are tracking to complete them. 
  3. If the customer would like to see the parts in work, you can walk them to the exact workcell that the order is running in.

Steps followed to answer, without shop management tools:

  1. Locate a daily sales report (DSR), usually, a physical report, generated daily, and distributed across departments.
  2. Look up the Customer PO # or Part Number on the report and the WO# or job traveler # associated with it.
  3. And then, go physically find the WO in the shop. 
    1. Hopefully, there is a status board that provides what workcell the WO was last reported in, however, on more than one shop tour I’ve walked the entire shop with the owner to find a specific job traveler. I can tell you that with each workstation that the job traveler WASN’T found at, my confidence in the supplier’s system and processes deteriorated. 
  4. Often to then provide an estimate on the lead time remaining for the outstanding processes left for the job, a “best guess” was used, instead of well-documented lead times.

This example clearly outlines how drastically different the customer’s experience can be given an ERP system, and other workflow processes, are in place in your business versus not. 

2) Prioritization of Orders 

Customer question: “What orders are due to ship out this week? And how do you prioritize jobs?”

What information can be obtained from this question:

Steps followed to answer, using shop management tools

  1. Using a production schedule or dashboard, directly in the system, show the customer where their orders are located in relation to all those in your shop. You can highlight and sort orders by the due date and articulate how you manage your production schedule, all while demonstrating it live.

Steps followed to answer, without shop management tools:

  1. Using a daily sales report (DSR) and blackout chart, sometimes upwards of two to three versions of the report exist: one sorted by delivery dates, another copy sorted by customer, another by past due deliveries, maybe another for orders at outside processing. Hopefully, in each version of the report, the priority of the orders is consistent.
    1. AccompanyingAccompany physical DSR reports is usually a daily meeting that requires department managers/leads to attend to review the reports. The physical DSRs are marked up in that meeting and then used to prioritize the day’s activities for each department. If a job, however, is re-prioritized throughout the day, at that point the DSR immediately becomes obsolete or requires a re-print/circulation throughout the company. Oftentimes that reprint isn’t done,  communicated across departments doesn’t happen, and departments are working on different, and often conflicting, priorities. 

I’ll add, in paper-based shops, where travelers can be found throughout the shop floor, as I’d walk the floor, I’d often look for customer due dates on the WOs. If the majority of the due dates were in the past, that was a warning sign that the supplier didn’t have processes or systems in place to prioritize work throughout their shop. 

3) Metrics/Key Performance Indicators (KPIs) 

Customer question: “What’s your current on-time delivery percentage for this month?”

What information can be obtained from this question:

Steps followed to answer, using shop management tools:

  1. In most shop management systems, the on-time delivery metric is located centrally in the system (either on the homepage or a dashboard), so with the click of a button, you can show the customer that metric.
  2. If the customer wants to dive into the data driving the metric that data is typically linked directly to the metric, and can be accessed quickly. The data can further be filtered by a specific date range or customer.

Steps followed to answer, without shop management tools:

  1. Without a system in place, on-time delivery is tracked, often it's via a physical report that is run at month-end, and then circulated or displayed centrally in the organization. The report is not current to date, often unclear what exact data was used to calculate the metric, and not available to be filtered by customer.
  2. If the customer wants to view on-time delivery for just their orders, this may not be data that can easily be pulled and supplied if it’s requested on the fly. Data may have to be pulled and analyzed and then a report sent to the customer post-visit. 

On-time delivery is one of the crucial components to customer satisfaction and the success of a business, and it was the driving metric for the departments I worked for and managed. So I expected the same from the suppliers I worked with. How they answered this question and how laborious the steps were to supply that answer told me a lot about how important meeting my company’s delivery dates were to them. 

4) Inventory Management

Customer question: “How do you know what this material is, how much you have on hand, and how long it’s been in your inventory?”

What information can be obtained from this question:

Steps followed to answer, using shop management tools:

  1. An inventory screen displays the on-hand quantity for a given material, storage location, purchase & receipt history, etc. 
  2. Physically the inventory has been labeled with data (PO # and material description or part #) that ties back to the ERP system, which houses the traceability information for the material. Certs are scanned and saved in the ERP system and can be provided as requested.

 Steps followed to answer, without shop management tools:

  1. Physically the material has (hopefully) been labeled with a PO#, material description & part #, supplier, delivery date, etc. Oftentimes the labels are 2-3x larger than they’d need to be if the material traceability could be instead referred back to in an ERP system.
  2. To determine how long inventory has been on hand, or supply the certs for the material to prove it is in fact the material type listed on the label, often this information has to be pulled from a physical PO or cert packet that is filed in a filing cabinet. 

I remember, on one site tour, I had gotten a call from my Quality department letting me know we were missing some certs on an order that had recently been delivered from the supplier I was visiting. So on the tour, I asked if a copy of the certs could be supplied to me before I left. The tour lasted an hour, and in that time the supplier couldn’t locate the requested paperwork. Two days later they called and confirmed they couldn’t determine what material was used for that order. We had to scrap the finished parts, and the supplier had to re-make them using material that had cert traceability. We lost 2 weeks of lead time on our own production schedule and missed our delivery date to our own customer. 

How Does ProShop Help?

ProShop’s tools are geared to address these, and many more questions that customers will ask on shop tours. Whether it’s the on-time delivery metrics that we displayed on the ProShop homepage, or the dedicated Scheduling module designed to quickly and efficiently schedule work through your shop and provide visibility of that order of jobs in real-time throughout the organization, ProShop is here to help you fly high instead of fail fast during a customer site tour! 

A nearly perfect case study of this phenomenon was outlined in this article from Modern Machine Shop Magazine, featuring a ProShop customer East Branch Engineering in CT. The article describes how, after visiting 2 suppliers who were dual sourced on a large project, East Branch won the entire project because of how well they could answer questions and demonstrate their digital system compared to the other vendor and their paper-based system with its inherent problems.[/vc_column_text][/vc_column][/vc_row]

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Author: Paul Van Metre

[/vc_column_text][vc_column_text]Nearly every CNC machine shop I’ve talked with or visited always has a bottleneck in their QA room or inspection department. It just seems like it takes anywhere from several hours, to a few days for jobs to move through the QA room before they can move to the next process, whether that’s internal, or leaving the company to an outside process or to the customer. It’s just a fact of life that most shops deal with, and it’s costing them a lot more money than they realize. See if you recognize some of these points in your shop.

A bottleneck on a resource happens where the capacity for throughput is lower than other resources in the value stream that feed it. Because the QA room is processing jobs coming from many manufacturing resources, such as CNC machines, assembly, deburr, it’s easy for the department to get overwhelmed and backlogged with incoming work orders, causing a bottleneck. Bottlenecks happen for a number of reasons in the QA room.

4 reasons why a bottleneck happens in the QA Room:

1. First part buy-offs or FAI is being performed in the QA room, which can result in a high number of complex inspection processes being performed.

2. In-Process inspection is being performed in the QA room, so parts are being delivered frequently, resulting in a lot of transactional cost/time.

3. Final inspection is often performed here. Doing a comprehensive inspection when it’s too late to affect change in the parts. (note: this is sometimes mandated and unavoidable).

4. The QA room is where FAIR (First Article Inspection Reports), like AS9102, are generated. Since these are often very time-intensive, they can cause significant delays and contribute to bottlenecks.
When bottlenecks in the QA room happen, a number of unfortunate outcomes are typically a result. These are all very expensive to the business and cause reductions in productivity.

6 Outcomes in the QA Room because of a bottleneck:

  1. Machines or work-centers sit idle while the jobs are in queue to be inspected through the QA room. Productivity is lost and throughput is reduced when the machines sit idle.
  2. Jobs are delayed in being moved to the next process, like the next manufacturing operation, outside processing, or shipments to the customer.
  3. These delays can cause jobs to become late to the customer, making the customer unhappy and increasing the chance of them moving their business to a more reliable supplier
  4. Delays can necessitate the need to pay expediting fees to outside vendors in order to reduce delays to the customer.
  5. Delays can mean that over time of manufacturing staff will be used in order to catch back up and reduce delays.
  6. Expedite shipping methods may need to be used to reduce transit time between the shop and the outside processor, back again to the shop, or for final delivery to the customer.

All of these outcomes are expensive, and often all of them need to be employed for a single job, dramatically reducing the chance to make a profit on the job, and very likely ensuring that the job will lose money instead of being profitable.

4 simple ways to reduce bottlenecks in the QA room:

1. Develop a system to do as many FAI’s on the shop floor as possible. In many shops, the setup machinist does the first buy-off, and then submits the part to QA for a second check. Have another machinist or a shop floor inspector do the 2nd check. There is almost always someone who has a bit of extra time while they are running a machine, or can come give a second check without affecting their other job’s throughput much. It’s important to ensure that this person is qualified and trained to be an inspector. Not just anyone should be able to give a second QA check on a part to ensure that the inspection is done properly. It’s important to provide the necessary equipment on the shop floor, including even the use of shop floor CMMs where warranted. Whatever inspection is done, it must be recorded appropriately, and ideally in a digital format and not on paper.

2. Do your In-Process-Inspection on the shop floor, at the machine. These inspections should be designed into the workflow of the machine operator, with very clear and easy-to-understand visual work instructions. The appropriate inspection equipment should be provided, and consider the use of go/no-go gages to increase speed and accuracy when appropriate. And again, record the results digitally!

3. Record the inspection results in a way that flows seamlessly into the final inspection. This means don’t use paper, and if spreadsheets are used, ensure that they are connected or shared in a way that can be utilized later in the process. Ideally, your ERP system should collect this data in a seamless way to allow the next step of the process to happen.

4. Automate the preparation of FAI reports at final inspection. By collecting the right kind of inspection data earlier in the process, and in a way that can be leveraged for the creation of client-facing inspection reports, a significant amount of time can be saved. Preparation of inspection reports is really a formality and isn’t the actual time that the quality of the parts is being verified. As discussed in points 1 and 2, the validation and verification of quality should be done at the same time the parts are made. A final inspection is a time to do a few spot checks, review the job for completeness, and prepare inspection reports from previously collected data. When done correctly, forms even as complicated as the AS9102 can be completed in seconds using the data collected earlier in the process. This can be a game-changer for throughput and reducing bottlenecks, when reports that used to take hours, can be completed in seconds.

When these strategies are utilized, not only are bottlenecks in the QA room eliminated, but the jobs themselves flow more efficiently, scrap is reduced, and spindle uptime is increased and throughput is dramatically improved. Creative energy must be used to mitigate risks, but it’s always possible and the upsides such as these are too large to ignore.

5 shop benefits of reducing bottlenecks:

1. Expedite fees for outside processes can be drastically reduced when parts don’t sit in QA and are shipped immediately to your vendors for processing. That gives you more room to maintain the margins on your jobs and keep the money in your pocket.

2. Spindles run far more often when parts aren’t sitting in a queue in QA waiting for a buy-off. This translates to higher throughput which means more dollars being generated off your equipment.

3. Better on-time delivery performance to your customers. Every company wants this! By speeding up the flow of product through the QA department and the facility in general, you will be able to improve your lead times and be on-time more often for clients.

4. When you are on-time, or ahead of schedule, you don’t need to scramble at the last minute to ship overnight or drive your parts to the customer. You can ship using less expensive methods, like UPS ground, spending less money on shipping, or paying your employees to drive parts around. They have far better things to do.

5. When all of those benefits are counted up, the net result will be considerably higher margins on your jobs. Multiplied by many jobs over the year means more profit for the company to reinvest in growth or increasing shareholder value.

Example:

Let’s run a quick simulation of how these ideas can dramatically improve margins at your company. Let’s take a sample job worth $2000. If everything goes smoothly and no excess waiting, or expediting was necessary, you perhaps have $1600 in cost and make $400 in profit - a 20% margin. If you need to expedite finishing for $150, pay $100 in overtime costs and also need to use UPS red shipping to send it to the vendor, and to your customer, with a $50 charge each time, that totals up to $350 of unnecessary costs; reducing your margin to $50 or barely breaking even, rather than making 20% profit - a significant reduction. By eliminating those extra costs, multiplied by dozens or hundreds of jobs per year, a shop can add many thousands of dollars of profit to the bottom line. The ROI of reducing the bottleneck in QA is significant! Some of these changes can be helped by the ERP/QMS system, but many of them are simply changes in process that can be made by any company after careful consideration and planning to mitigate the risks.

How can ProShop help vs other ERPs?

Besides the ability to print a router with the QA room listed as a process, there is little a traditional ERP system can do to help with this process. All inspection processes are managed offline with paper, spreadsheets, or other 3rd party software. ProShop has a complete paperless QMS system integrated into the ERP and can completely manage all inspection processes for first part buy-off, in-process inspections, final inspection, and more. It can automatically prepare final inspection paperwork such as AS9102 forms, auto-filling the fields from many other places within the ERP, leveraging data that is collected earlier in the value stream. Our training module and company positions module can help track the training proficiency of your inspectors and machinists so it’s clear who is qualified to perform inspections. Our inspection dashboard will show you what priorities and shipping date targets are for the jobs that do need to flow through the QA department The right work is done in the right order, and it’s as quick and efficient as possible, reducing time through inspection, helping your company get the product to your customers on-time at the highest quality and margins possible.[/vc_column_text][/vc_column][/vc_row]

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Author: Paul Van Metre

[/vc_column_text][vc_column_text]IMTS 2018 just recently finished. It was a record-breaking event with over 129,000 attendees.  The energy was palpable – things were hoppin’!

It was our first time exhibiting in our own booth.  In 2016 we had a banner and one computer station in the Mastercam booth (we’re their only ERP partner) but 2018 was really our first time exhibiting.  We had some very good press leading up to the show.  The two most popular podcasts about machining had both recently announced that their shops were using ProShop and were loving it.  We had a few short articles or press releases in a few of the industry magazines, and ProShop was ranked as the #1 highest rated manufacturing ERP system on Software Advice.  We had a few things going for us.  As it was our first year, we didn’t get first dibs on a booth as you can imagine.  We ended up with a 10x10 in the lower level of the East hall. Not prime real estate!

But we couldn’t have anticipated or prepared for the sheer volume of traffic we got during the show.  Our booth was literally packed with people, often flowing out into the aisle, for a good 80% of every day.  We squeezed 3 demo stations into that tiny booth and were often using all three, and other ProShop team members were talking with others in the aisle, or doing a demo on a laptop or tablet.

We have known for a few years now that ProShop is a very different kind of product than the legacy manufacturing ERP packages out there.  But this show opened our eyes even more.  This one story sums up the feeling in the industry about shop management software.

I was walking up to the main concourse to watch the live taping of the MakingChips podcast. Jim Carr, host of the show (and ProShop customer), was talking with a listener. As soon as I walked up, Jim said "And you need to talk with this guy!"  The gentleman (Mike) turned around, looked at the logo on my shirt, and said:

“I came to IMTS because of ProShop!”

Mike had recently bought Hill Manufacturing, a 40 person job shop in Oklahoma. He explained that they really needed a better ERP system, but he wasn't planning on coming to the show. But after hearing the episode of MakingChips, where Jim and his son Ryan talk about implementing ProShop at Carr Machine, he bought a ticket to fly up for just one day.  He had arrived that morning and was leaving that evening. He told me as he listened to that episode, he kept nodding his head at everything we were saying.  He had the same problems in his shop and he needed the same solutions. His primary agenda was to come to the ProShop booth and learn firsthand how it could help his shop.  It made my day! (And he subsequently became a customer)

The reason that we believe this is so significant, is that it underscores how shops are so eager - even desperate - to find an effective shop management software solution. There are thousands of shops who have settled for what they think is the least bad solution. They are beaten down by the daily frustrations and inefficiency of it all; and they don’t know what to do about it. They’ve looked over and over again and have never seen anything better - so there is no reason to switch. So, when they hear about something that might be different, they are on a mission to learn more.  And they move fast!  We’ve had companies who weren’t even in the market for ERP software, sign up for ProShop on the spot, after seeing a demo for only 30 minutes at a show.  We joked about coining the term “Spontaneous ERP Switching” – or SES. It’s contagious and spreading fast! 😊

Given the number of orders and follow up demos we’ve seen just in the first couple weeks after IMTS, there is clearly something happening here. It’s common knowledge that the legacy systems on the market leave so many gaps on really important aspects of running a shop every day. From work instructions, to inspection, equipment calibration, cutting tool management and so much more.  This is the exact reason we built ProShop in the first place.  When our shop was looking for software, we were completely underwhelmed by the offerings.  But rather than choose the least bad option, we decided to build something ourselves. It was built on the shop floor of our machine shop, Pro CNC, over 17 years.  If you have a problem, we likely had the same problem and solved it with ProShop. If you’re wishing you had a better system, we’d be honored to give you a demo of ProShop and let you ask every question you can think of. Click here to book a demo time slot that works for you.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_single_image image="5577" img_size="full" onclick="custom_link" link="https://proshoperp.com/roi-calculator/"][/vc_column][/vc_row]

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