Getting A Handle On Operational Data

A few years ago fitting manufacturer Tylok International, Inc. (Euclid, Ohio) was in the midst of computer system confusion. In 1996, when the company hired Mike Palinkas as the systems manager, Tylok was running three separate networks with three different operating systems. The company was having a lot of problems doing this and decided it was time to change. So the company looked at software demonstrations from six vendors. Tylok eventually decided to install 17 networked PCs with Windows 95 software plus Visual EstiTrack, a shop management program from Henning Industrial Software (Hudson, Ohio). The fact that Tylok's facility was located close to the software vendor's headquarters helped relieve some worries that accompanied this task, but the system's capability was the decisive factor.

"When Henning presented its demonstration, we decided that it wasn't worth an extra $25,000 to purchase a high-end package," Mr. Palinkas says. "We felt Henning's software had everything we were looking for, and the price was within our budget."

With approximately 4,000 standard part numbers, getting inventory under control was no small task for Mr. Palinkas. Before using Visual EstiTrack software, categorizing part inventory numbers had been troublesome. When he first joined the company, Mr. Palinkas found that, because finished stock items could not be distinguished from partial assemblies, inside sales reps often promised customers unrealistic delivery dates. So Mr. Palinkas wanted to arrange his inventory differently under a new system that assigned a separate inventory number, part family name and completion-status code to each part.

Tylok's fittings are manufactured in four basic shapes. A nut and two collets (also called "ferrules") complete each unit. Because one type of nut and collet is used for all four types of bodies, these parts are needed in larger quantities. Once all the pieces are machined, they must be assembled prior to delivery. Under the old inventory system, distinguishing between incomplete units and those ready to ship had frequently produced problems. With the new software system, however, inventory was split into "assembled inventory," "unassembled inventory" and "work in process."

"When we search a specific part number to ship a 10,000-piece order, all three classifications come up, and our salespeople know exactly what is going on. If the finished goods inventory shows zero, but 10,000 pieces are listed that need assembly, we know that we can't promise overnight delivery," Mr. Palinkas explains.

The new inventory system incorporates a minimum-quantity safety level in the finished goods category. If inventory drops below this minimum, it's automatically recorded on a reorder report. Henning helped design a report for Tylok that shows both the number of finished pieces and those awaiting assembly. The purpose is to determine what is needed for the minimum inventory and what needs to be assembled or machined.

The minimum stock levels and order numbers indicated on the reports are important to determine which machines will be used to manufacture the necessary parts. In its three departments, Tylok has numerous bar machines, chucker machines, CNC lathes and Bridgeports. Although cycle times for parts made on CNC machines are typically longer than those made on screw machines, CNC machines have significantly shorter setup times, so the shop uses its CNC machines for short runs.

To run the same part for example, setup on a CNC machine can be completed in only 2 hours, compared to as many as 16 hours of setup time required for a screw machine. But once the number of required parts exceeds 1,500, the job is sent to Tylok's screw machine department.

The other factor that determines which machines are used is the part's shape. Forged fittings in elbow, "T" or cross shapes, for example, require the use of chucker machines.

The staff at Tylok is currently trying to fine-tune manufacturing methods for producing a new line of fittings that are completely interchangeable with competing products. Mr. Palinkas is adding the new parts to his inventory and developing a monthly report to compare sales of new and old fittings—as well as to determine the total value of each type of part in stock.

"We are trying to get the new product on the shelf and into our inventory, but approximately 700 standard sizes are involved," Mr. Palinkas says. "That's a lot of parts, even if we only run a shop order for 3,000 of each." The products are only produced in stainless steel, but the company will make the parts from 12 different materials.

The Visual EstiTrack training manual includes two appendices. The first explains the process that Tylok uses to select its distributor codes (the company sells through more than 100 distributors). Each distributor is assigned a specific code for administrative purposes. The second appendix explains how to create inventory numbers for new parts or new sizes of existing parts. Because guidelines were laid out when the inventory system was organized, Mr. Palinkas follows these to add new product lines to his system. These appendices were added to a 100-page training manual that Mr. Palinkas developed with Billie Henning of Henning.

"Henning has a standard manual that goes into descriptions of each field, but I needed a manual that could fit into the way we do business—so we wrote one," Mr. Palinkas says.

Tylok first went online with Visual EstiTrack in August 1999. In March 2000, company personnel started using the software's time clock to record payroll time. Operators no longer had to turn in their job tickets at the office for data entry. Instead, the lead person in each department enters the group's time, assigning it directly to each job.

By controlling the pace of implementation, Mr. Palinkas has been able not only to maintain control of Tylok's operations, but also to actually improve them by adding functions to the system that were not previously available. Two such functions are quote tracking and part cost tracking. With labor and material costs accurately represented, the shop now can determine its distributor discounts without the risk of losing money. Under the old system, when distributors buying in volume requested larger discounts, there were sometimes questions about whether the company could meet the request and still make a fair profit.