Digitizing Your Job Shop for Increased Production and Profitability

Q: My shop already uses manufacturing software, but it is a bit old. Is implementing new manufacturing software worth the investment?

A: Most metal finishing shops today use software to run their shop floor and business office. But far too many plant managers will say that their software is a drag on profits and a daily punch in the gut to employee morale. Some even say that their software sucks most of the joy out of their workday. 

Why is this? Sometimes it is because the software is dated: old, slow, bad interfaces and illogical or redundant procedures. More often, it is because the software was written for other types of business, so the programmers knew nothing about how to run a metal finishing shop. In both cases, the software is usually a drag on workflow, profits and employee morale. Too often, the software has been made for manufacturers who write up two or three orders a day.

But things are looking up. Over the last few years, new software tools have been developed, and finishing shop packages are finally being released that are fast, easy to use, and tailored for metal finishing shops.

So how has software changed and how can it help a shop run more smoothly? There are many ways, but here are a few examples: 

Software is now reliable while totally online so there is no need for on-site servers with backups that crash or slow down and need IT personnel to fix.

New user interfaces match the consumer-grade usability of modern applications such as Facebook and Google, so employee training takes minutes, not hours.

New software tools allow for fast development of easy-to-use software specifically tailored for niche industries like plating and painting job shops. For example:

• Racking modules built to match your reality
• Automated job costing algorithms built to mirror automated lines, batch ovens, batch booths
• Automated quoting to match the true job cost
• Drag and drop scheduling to facilitate high-powered plant production

Most importantly, deployments of modern, industry-tuned software takes weeks, not months.

Diving in

Let’s dig a little deeper into the problems that often arise in a typical shop. For simplicity, let’s break up this discussion into two categories — production and the front office.

Shop floor labor is typically the highest cost item on the P&L statement. These people should be doing what they do best: plating, painting, and other parts processing. Yet here is a list of non-value add things they are often asked to do:

• Tagging the job when it is received
• Finding where the order is in the shop
• Confirming the parts are ready to process
• Confirming the order is correct and the print matches the paperwork
• Figuring out proper processing parameters and special instructions
• Deciding which rack and hook to use
• Documenting what was done to the parts
• Documenting that the order is complete in their station
• Bringing the parts to shipping
• Finding the order to give or ship to the customer

Most software offers no help in increasing the efficiency or accuracy of these tasks that are done dozens or hundreds of times per day in a typical metal finishing job shop. Notice that none of these tasks include actual parts processing. Moreover, orders must be processed through other areas of a business, such as order entry, scheduling, material handling, shipping, invoicing, cash receipts and sales. Plating shop software often bogs down these areas too. At Steelhead, we categorize this non-value add task time as dead time.

This dead time can be as much as 40 minutes per job. For shops running 50 jobs a day, at $100/hour shop rate, this could mean that as much as $700k is overhead cost associated with this dead time.

Plant software that can efficiently communicate in real time to show the employee where, what, how (pictures, text, video instruction), when to execute a job, and then automatically track the job characteristics in the background is a game changer. This facilitates efficient and lean operations in a high-mix environment; practically eliminating the dead time on jobs to drive maximum production throughput.

Next, let’s discuss front office operations where sales and scheduling drive the bus. Without a high degree of execution here, the company will not prosper.

Every significantly sized company in this industry invests heavily in scheduling. Historically, this investment is comprised of time and talent. sales, customer service, operations, production supervisors, and company Leadership typically weighs in on scheduling decisions. This exercise can be very distracting, time consuming, and expensive. With modern technology, real-time status of the entire plant can be available and actionable at a moment’s notice.

It is worth stating that batching is a phenomenon that is required to hit efficiency and profitability targets. Great batching of work can lengthen lead times to days that decreases customer satisfaction. Scheduling requires a fine balance of efficiency and customer satisfaction.

Plant software that is purpose-built for metal coating job shops can reduce the cost of scheduling and increase effectiveness. To schedule properly, a few things are critical:

• Tooling required (racks, hooks, etc.)
• Finish
• Spec
• Part count
• Task time
• Customer expected delivery date
• Part current location
• Line/station current and scheduled burden

With this data presented to the scheduler in a highly sortable fashion, with drag and drop scheduling, not only does it reduce the time and talent required to schedule, but the results are astounding as the plant scheduler can test and iterate in real-time with the plant’s next moves. It’s a bit like playing a chess game, where you can hit “undo” if needed.

The last piece of the front office is sales. In moving a plant digital, the sales team inevitably becomes number ninjas. With time and materials of each step in the process being automatically tracked digitally, auto-calculated margin reports arm the sales team to eradicate the negative profit margin jobs, and to better understand their true costs of goods sold; raising prices wherever needed. This has astounding effects for the sales team to consistently hit their target profit margin for consistent, scalable growth with consistently satisfied customers. Quote turnaround time can also be improved by auto calculating part prices based on part parameters, to streamline the quoting process and turn it more from an art to a science.

With efficient operations reducing dead time, scheduling efficiently with a modern drag-and-drop platform, and the sales team ensuring each job is profitable, the throughput and efficiency of the metal coating job shop machine is unstoppable.