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Shop Floor Management

We ask the questions

By Gretchen Salois

February 2019 - No matter the scale of their operations, fabricators managing part volumes—small to large—are adjusting to technological advancements, shorter lead-time demands and labor shortages. Experts talk with FFJournal about the issues their customers are talking about, what questions manufacturers should ask, and what the shop floor’s future holds.

PARTICIPANTS:

AMS Controls, Andy Allman, president

ECi Software Solutions, Jeff Ralyea, president, manufacturing division

Epicor Software Corp.Christine Hansen, senior manager product marketing

Global Shop Solutions, Nick Knight, senior director, customer services 

IQMS, Steve Bieszczat, chief marketing officer

KeyedIn Solutions Inc.Dave Lechleitner, director of solutions and product marketing

Lantek, Kevin Must, marketing manager

Plex Systems, Richard Murray, chief product officer

Shoptech Software, Paul Ventura, senior vice president of marketing

SYSPROPaulo de Matos, chief product officer

Q: What are the current weaknesses or problems of fabrication operations?

de Matos: During the last decade, the focus on material use, improving materials management and the ability to integrate ‘shop floor to top floor’ was the primary concern when fully integrating the shop floor into their data systems. Today, customers are saying they want to integrate to their suppliers and customers. The idea that companies don’t compete individually but rather supply chain versus supply chain, is gaining acceptance.

In the past, the buyer had to contact organizations [requesting] a price. Now, suppliers can log into a portal and self-service those requests. The buyer can look and say I’m going to select a supplier. It’s that integration where customers want to take advantage of automation and optimization.

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Allman: Our customers often deal with the lack of qualified workers, in-plant maintenance and adequate engineering support. Plus, the trend toward small batches and higher customization where most production is make-to-order (no inventory buffers to help with peak demand) makes managing an efficient shop floor challenging. Often manufacturers rely on ‘heroes,’ meaning the one or two key employees who are trained and dependable. When there is such a high level of reliance on one or two employees able to execute tasks, production faces the danger of delays.

Customers also want improved shop floor visibility, including real-time data as opposed to day-old reports, as well as the ability to easily drag and drop scheduling. Change is a constant with our customers; they need a way to maintain a schedule that automatically updates as changes are made.

Ventura: ERP technology has changed exponentially over the last five years and the cloud is the impetus for that. The cloud has taken this industry in an entirely different direction, whether fabrication, machine shop, tool and die, tool machine shop—from small mom-and-pop shops running Quickbooks to the large, high-volume companies; the cloud offers game-changing options. IT costs are reduced, no expensive server, no SQL licenses, no IT staff needed to update software, no firewall software needed, all backups and restores are taken care of. We take all of that off their plate and handle it for them.

Murray: The most innovative manufacturers are leveraging the cloud for their core systems—also known as the system of record. This foundation allows companies to easily connect new devices, but more importantly, gain access to additional information that can be analyzed, parsed and leveraged to make better business decisions. This kind of visibility empowers shop floor leaders and top floor executives to respond to changes quickly and thoughtfully.

Lechleitner: Over the last 30 years, manufacturers are still focused on how to get more work out the door with limited people and machine resources and still maintain preferred supplier status with customers.

Technology has evolved dramatically just in the past three to five years that now allow ERP systems built on that latest technology to integrate seamlessly with machine controls through the use of leading edge APIs and other tools. With the advent of the IoT, cloud and other disruptive technologies, we are now able to gather even more data directly from the machine and communicate in real time back to the ERP solution. We have almost eliminated the reliance on the machine operator to tell the system what they are doing, [the machine automatically knows].

This is critical for a number of reasons, including more accurate costing of the parts; and scheduling adjustments can happen in near real time based on the part’s performance in the machine.

Knight: By far the largest problems for our customers are increasing competition, visibility on the shop floor, and knowing their costs so they can deliver a quality part on time, every time.

Providing complete data transparency allows manufacturers to schedule better and know where a part is in the manufacturing process in real time. Employers and operators waste no time looking for jobs because everyone knows exactly what to work on and when to work on it.

Must: A major weakness that software can address and rectify is the visibility and sharing of information across all departments without the need for meetings. This access allows departments to operate with autonomy in making critical decisions to increase machine capacity, produce more efficient schedules, and accept more work—all leading to higher revenue and profits. Not only can departmental autonomy be achieved, but accountability can be tracked more easily throughout their entire manufacturing process.

Hansen: In the past, ERP has been viewed as a system of record, a set of financial controls and material requirements planning (MRP) production controls. Today, businesses rely on their ERP solution to be a platform that inspires workers with greater levels of connectivity and collaboration both internally and with business partners, especially customers.

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Ralyea: To keep up with this competitive market, technology companies are scrambling to offer the biggest and best products and services. As history shows, technological advancements in the enterprise will continue to grow and, while the biggest and best products turn heads. A solid foundation is what really drives success and ROI.

Q: What might discourage companies from updating/automating software?

Knight: We see a clash between fabricators’ desire to integrate and automate their shop floor and the cost and commitment to change. Most manufacturers find change difficult and are scared to change because ‘we’ve always done it this way.’

Nearly every fabricator wants to deliver a quality part on-time, every time as fast and as automated as they can, but it comes down to their willingness to make investments and cultural changes.

Murray: No software solution should hold your company back from growing. On-demand scalability should be seamless, and this is best accomplished by multi-tenant solution providers that leverage the scale of provider-managed shared infrastructure while delivering individualized, segregated and secure applications to each company.

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Q: What features or capabilities have made the biggest difference in streamlining shop floor to front and back office?

Ventura: Hands down, apps on the smartphone have been a real game changer. The old way of labor reporting involved the worker walking over to a PC or clock on the wall, which wastes a ton of time and money. Now the employee can use the E2 apps on their smartphone to log time, report piece counts and scrap information without leaving the machine or work cell. Shops using these apps have reported a huge spike in productivity and, in turn, higher profit margins.

Inventory apps allow users to post material or perform cycle counts from their phone or tablet. When we first showed these at trade shows, people said they didn’t allow phones on the floor because ‘I don’t want my guys surfing the web when they should be working.’ So people started buying iPods to access the apps without worrying their workers were doing non-work-related surfing. It allows them to get more efficient work out of employees without sacrificing safeguards. E2 apps also have built in GEO fencing so employees can only enter information inside the shop. No one can log in into the system while they are driving into work; they have to be physically inside the shop for the apps to work.

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Q: What questions are customers asking? What questions should they be asking?

de Matos: We ask whether customers want their systems’ deployed in the cloud or on premise. We recognize that we’re dealing with multiple generations from [Baby Boomers and] Gen X to Millennials—if you want to access by mobile you can; if you want to log onto a website, that is also possible. We want to be flexible and make those choices available.

Lechleitner: Customers ask us whether the cloud is really safe. How can I ensure that my data is secure?

Knight: The most common FAQ we get is ‘how do I more with less?’ Many of our customers have a handful of integrations while others have dozens. Typically, the manufacturer that integrates and automates more are the best users and gain the most return out of the software. We are finding manufacturers want their human capital to be more productive and create, manage and make decisions whether on the shop floor or the back office. Let computers do what they do best and let humans do what they do best.

Murray: ERP implementations have been described as open-heart surgery, and this speaks to the vital role these systems play within an organization. Based on our experience implementing at plants around the world, here are the most common implementation mistakes manufacturers should work to avoid: Not having an executive sponsor; not recognizing an ERP implementation as a culture change; having unrealistic expectations and unclear objectives; keeping ERP siloed and not providing access to employees across the company; including the wrong leaders in the process; and losing focus of the most important measures of success.

Allman: Customers want to identify internal or external bottlenecks. They want to know if it is possible to produce more with their current staff. Do they have the opportunity or ability to sell the extra output? What’s the opportunity cost per minute of downtime?

OEE (Overall Equipment Effectiveness) plays a major role in helping manufacturers manage the efficiency of their machines. Compiling reports for OEE can prove challenging. Having a system that consistently monitors and reports on OEE, providing not just historical data but real-time metrics will help manufacturers understand the health of their production process.

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Must: Given the intricacies of these systems, it is important for companies to understand that [ERP] is not a plug-and-play type of system. Time must be taken to be sure parameters and data are properly transferred from existing systems to new systems. Some of the questions we hear most often include: How can my team use this most effectively? How can we get our employees to buy in to the importance of new technology? How do we portray the importance of this transition to stakeholders? How can one justify the cost for something as intangible as software? Are there security risks in transitioning to new, or cloud-based, software? How can we be sure that our information is protected?

Hansen: Our customers are asking how they can deliver an experience that drives improved loyalty from their own customers and attract talent to better serve those customers. They are interested in greater connectivity with devices to deliver more information and greater responsiveness while taking advantage of greater automation.

Ralyea: Customers always ask how our ERP will fit with their existing processes. Our counsel to them is that it is important to leverage the ERP to streamline and improve their processes rather than changing the ERP to fit existing and possibly outdated processes.

Knight: Predictive analytics for your manufacturing that identifies strengths, weaknesses, future bottlenecks and more. Imagine a world where your ERP software can tell you how well your machinists, purchasing or shipping department is doing as it compares results in real time against other companies that are just like you?

Bieszczat: The people we talk to are trying to resolve how to handle success and growth. Success has led to increased demand from their customers for more products and they’re trying to manage that.

Using IoT and digital transformation and predicting software, users can track whether a machine is lagging behind or how many cycles a tool can run before part quality suffers. There is no human interaction. [By] automating things, you’ve reduced the process to one man looking at four different machines instead of two to three workers waiting around in case they are needed. Increased regulatory standards, such as government regulations or customer standards (automotive customers adhere to their own requirements, for example), are also programmed into the ERP system.

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Q: How is job shop management changing? What factors are driving this change?

de Matos: The market increasingly expects mass customizations. Making the best use of raw material is the driving force behind this change. Planning and scheduling cycles depend on different customizations and numerous complex algorithms are used. SYSPRO has facilitated whatever nesting software a fabricator may already be using, whether it is part of the machine itself included by the supplier, or, if not, we can integrate our software with their machine to manage the raw material usage and nesting optimizations.

Ventura: The No. 1 thing customers seek is an integrated system between the front office and the shop floor. They want to streamline the entire business from quoting, scheduling, material management, quality control, shipping and integrated financials—that’s what gets them most excited.

The workforce is also changing. Customers tell us they must take care of their current employees by paying them well and offering great benefits or risk losing them to competitors. They are also tasked with enticing the next generations of employees by offering the freedom and flexibilities that Millennials are looking for. The manufacturing sector, especially the fabricators of today, offer a great living for people of all ages.

Must: Two main factors drive technology forward in manufacturing: the shrinking labor force and data use and consumption. With the amount of unfilled jobs in manufacturing, it is crucial for companies to look toward automated processes in order to stay competitive. These automated processes allow for humans’ roles to shift from repetitive to value-added tasks within the company, such as process improvement analysis, while providing transparency and autonomy between departments.

Lechleitner: The days of a one-size-fits-all ERP solution are quickly going the way of the dinosaur. Every manufacturer is looking for those things to differentiate themselves from their competitors. As a result, the need for open ERP architecture that can seamlessly integrate with machine controls or other applications allowing manufacturers a way to easily build exactly the solution they need is going to be critical.

Data analytics and business intelligence built into every aspect of the ERP solution will also be critical. The use of data to make better-educated business decisions is more important than ever before. Predictive analytics will quickly become the norm, whereby the ERP solution will be able to use data in such a way that it can communicate proactively back to the consumer of the data what may happen today versus simply looking at what did happen.

Traditionally, ERP was a 10- to 15-year commitment. Now, the ‘useful life’ of an ERP solution is often five years or less (if the vendor isn’t keeping up and making a significant investment).

Murray: Despite the general reduction in regulations across the rest of the economy, manufacturers still must comply with rigid industry and customer requirements, ranging from quality needs to delivery standards. One significant benefit from cloud ERP is automating and managing the documentation inherent to these processes. Paperless workflows are more efficient, transparent and auditable.

As small- and mid-sized fabricators and formers seek to serve larger organizations, the burden of documentation will only increase. In recognition of this, many OEMs require robust business systems. Investing in a modern system of record streamlines resources and allows suppliers to focus on continuous improvement efforts instead of managing data entry.

Allman: Customers want control over production and to increase efficiency and streamline processes. Change is constant. A system that helps manage that change efficiently and communicate the change down to all involved personnel in real time is key. Our customers need to track coil usage and scrap reduction; as material costs play a major part in metal manufacturing, reducing cost and improving coil usage can make a significant impact.

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Q: Once the data is collected, what is the next step? How do customers use that data to make shop management improvements?

Ventura: The biggest mistake anyone can make—I’m speaking about our customers or anyone using any kind of software—is not investing in training. If I buy an airplane, I need to know how to fly it. The biggest mistake people can make is to buy a system and not train their employees properly. Whether [using] virtual training or [bringing in] a consultant, the better your people are trained, the more your company will get out of it. Time and time again, people buy these systems and two to five years later they’re still using only half the system.

Bieszczat: Tracking production step by step, both the actual making of the part, as well as tracking whether it stuck to the planned schedule—was the part completed, did it take an hour as planned—when it came off the machine did it meet quality standards? Did the user schedule downtime and how does downtime impact the overall production schedule downstream? When something does go wrong, how are schedules readjusted? Monitoring production allows the user to know where a part is—according to the schedule. It’s not an open-loop system; it’s a closed loop of planning, execution, recording and re-planning in case something goes wrong.

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Q: What is your short-term versus long-term prediction on where ERP needs to go in order to keep pace with the challenges customers face?

Murray: For organizations of all sizes, cloud ERP systems should be evaluated for business operations as well as their ability to extend all the way to the shop floor. For smaller organizations, the benefits cloud ERP provides includes applications for finance and human capital management. Larger organizations will gain these advantages, but will additionally benefit from a cloud system that integrates easily with other systems the company may already leverage, regardless of whether they are on premise or in the cloud. At the end of the day, manufacturers should more seriously consider systems that have been custom-built for their industry’s unique needs instead of spending time trying to customize systems that reached maturity serving other sectors.

Bieszczat: We’re adding more flexibility for inspection setup in our latest release, a direct request from customers. We’re also doubling down on our investments in RealTime Production Monitoring. We recently did a survey in conjunction with Decision Analyst and found 85 percent of our customers rely on RealTime Monitoring to gain new insights into their operations. We’re also continuing to strengthen our production floor scheduling in our latest release, all based on customer’s needs. The bottom line is that our customers are showing us what they need to grow faster than median manufacturing growth today.

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Q: What do users do with all the accrued data?

Must: Manufacturers use and consume a tremendous amount of data daily between all departments. By implementing software such as manufacturing execution systems (MES) and ERP, data can be accessed across all departments according to roles and permissions.

Having software that integrates from your CAD/CAM system to your ERP system allows quick and easy access to pertinent information. This digital thread allows machine operators to receive updated programs for hot parts or jobs, estimators can quickly and accurately quote, and purchasers can be notified when materials or other consumables need to be purchased.

Not only does it produce urgent notifications, it also allows process improvement specialists to view and analyze real-time and historical data of all manufacturing processes. This creates an interoperable transparency, allowing manufacturers to pinpoint bottlenecks and offer solutions quickly without the need for meetings.

Hansen: Enterprise connectivity with ERP is real and available to businesses whether they are trying to achieve a greater customer digital experience with an online commerce solution, connect to equipment on the production floor, or provide employees mobile devices for personal flexibility and business clarity—wherever work takes them.

Ralyea: Customers are demanding more visual tools out on the shop floor, and we have addressed that demand by implementing dashboards and grids that tell shop floor employees what their priorities are and where they are in the manufacturing process.

de Matos: In the metal fabrication sector, there may be parts of the production process where you might have to outsource some specialty treatments—like engraving or coating, for example—that you cannot complete in-house. Our software manages these outsourced activities as well as raw materials that you would not ordinarily stock. We can showcase those capabilities in software without using multiple systems, offering a single operational system.

MES functionality compared to ERP functionality differs in that MES software can update all the ERP subsystems in real time without any manual data entry. We know we use 2 ft. of 1-in.-diameter bar, we know we have a man at the machine for an hour and the labor cost is $15 for that hour, and we know that it ran on time. That means the job is running on schedule and likely to be complete tomorrow at noon as planned. We call that ‘back flushing’ because it’s all closed loop and the software updates consumptions and costs automatically.

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Q: What drives your technology forward?

Allman: Most features come from customer requests. Our ultimate goal is to look beyond the feature request to understand the underlying business needs or issues that prompted the request. By doing so we have often successfully worked with the customer to find even better solutions; [capabilities such as] using the latest web technology and cloud services, growing use of low-cost consumer tech in factory settings, such as displays or wallboards on large LCD screens, tablets, digital devices, to put information where it can do the most good.

Lechleitner: It is critical that shop management and owners are able to proactively make sense of the increased volume of data. ERP systems are quickly evolving from being just simply a system of record to providing predictive and proactive insight into the key issues on the shop floor. Business intelligence and analytical tools are now a critical component of any good ERP solution.

Knight: Customers can submit ideas through Global Shop Solutions’ ERP and allow the community to vote the ideas up, down or add to them. It has worked out brilliantly and been the source of many recent innovations.

Bieszczat: The flexibility to enter a last-minute job into the system and immediately know how long it would take to get it done by the end of the week is important. The IQMS tells the user if they have the raw material available, and if labor and machinery are all capable of handling the job by the date entered. The machine will calculate how a last-minute job will affect overall operations and other jobs, and how that job will impact other delivery dates. If the software determines the change is acceptable, it’ll rejigger it so that it fits into the overall flow of the production floor without disrupting other processes.

Murray: Looking forward, metal fabricators and formers should expect from their ERP vendor connected solutions in the age of Industry 4.0. The Industrial Internet of Things (IIoT) provides manufacturers unprecedented opportunity to connect their operations and tap into the underlying insights. Plex aims to make IIoT adoption as simple as adding a smart device to your own home. Its IIoT platform will help customers connect manufacturing equipment and sensors to the cloud, manage high-volume data streams, and analyze in-motion equipment data to optimize performance, reduce costs, and ensure uptime. FFJ

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