Getting leaner with ERP systems

WM Plastics is a 35-year veteran of custom molding for telecom, consumer goods, and business machine customers. When the company began planning its move to a 65,000-sq-ft facility in 2001, managers decided to take a look at the software systems that ran the company. What they found was a $50 accounting package running a $20 million operation, and not too well at that. Two years later, after a switch to an ERP (enterprise resource planning) system, efficiencies are up in areas from customer service and production scheduling to plant management and material resource planning.

The journey WM Plastics took in switching from simple accounting software to a customized ERP system (The Manufacturing Manager, or TMM, from DTR Software International) exemplifies a trend among molding operations toward lean manufacturing. Investing in and implementing such systems are one of the cornerstones of the lean manufacturing philosophy.

According to Frank Macino, VP of engineering at WM, it comes down to serving the customer. “To be competitive, we need systems and technology that provide customers with the best service,” he says. “If we don’t serve them, someone else will. Buying the software doesn’t make you money. We make money by producing parts and shipping them in a timely manner to customers. Technology is a nonvalue-added item. The value comes in how you use the technology to serve the customers.”

From the time WM cut a PO to the time the company went live with the new system, a short four months elapsed. “That’s rather quick in terms of an average, but we had a choice to go live either before the move or after, and we decided to go before the move,” he says. “Our troops were elated to get a new system.” For one, the old software was supposed to be plastic specific, but fell short in terms of benefits. Also, the system used to crash frequently, and it was difficult to extract data.

Cautious Choices, Big Benefits
In the process of selecting software, WM created a cross-functional team that grilled every supplier under consideration. “We had gotten burned seven years ago,” says Macino, “and wouldn’t make the same mistake twice.” For the most part, the team said the same things to each vendor: Here’s what I do on a day-to-day basis. How do I do those things using your software? How easy or difficult is it to do them? For example, in the area of plant management, how do we schedule all of the machines?

The DTR package was selected and immediately after WM installed the software, managers held several meetings on the floor. They asked technicians what information was needed to do their jobs, and then asked them how they got that information. “I was amazed at how hard it was,” he says. “Now we put reports together and put that information in their hands at the beginning of the shift.”

Macino believes the changes that took place after implementing the ERP system have all been good. “Our customer service team takes orders, and frequently needs to check up on orders as well as move due dates around. Our old software made it difficult to do this. With TMM, for the first time, we truly have an accurate production schedule. If a customer calls to check on an order, customer service will get accurate information out quickly, with no call backs.”

Production scheduling has also gotten easier. Plant managers drag and drop orders around the schedule to maximize efficiency. A bar represents each job, creating a visual grid. “This makes scheduling jobs faster and more efficient for us. Now we can look at the schedule and match up jobs that make sense—for example, in terms of materials, jobs that are all clear, all whites, or all blacks on the same presses mean less downtime.”

A production schedule report is printed up every morning so the foreman can see press-by-press activity and when jobs will finish. Materials staging and mold staging for the next job are also listed. WM personnel can customize the information that appears in each job bar with items such as PO number, tool number, part number, and so forth.

“This is graphic as opposed to verbal scheduling,” says Macino. “We set up color codes. Any job due in seven days or less is yellow. Three days or less is red.” The color codes help to avoid pulling the mold too quickly before production is finished, or too late, so that there is no overrun and no underrun. “Perhaps the best part is that our people are not hunting for information. Material handlers, setup technicians, anyone who needs to know can access this information.”

Another area in which WM has seen efficiencies is MRP, or material resource planning. In the past, the company had a monstrous Excel spreadsheet created by one employee who spent three quarters of every day maintaining it. Now, he manages by exception. He looks at the situation five to six weeks out and asks what materials he will run out of in that time frame. That sets his priorities for the day—he examines what materials are required, and then the system calculates what is needed for each job. This alone has saved 3 or four 4 hours a day, and jobs are no longer late because materials aren’t in the plant yet.

The Payoff
Macino estimates an ROI for the system at less than two years. “Think about all the soft costs. What does it cost you to run out of material, be late on the order, or spend 3 hours on a spreadsheet? What does it cost you to overrun or underrun?”
Accurate reject reporting and a graphical interface allow WM to pinpoint problematic jobs. Managers review job costing reports and try to find the ones that are not running up to par.

WM plans to put in monitoring systems on the presses to track production and rejects, and to take out the reporting element. One more step is bar coding to make it easier to track inventory and reduce manual transactions. “We can do this with our current system,” he says.

Selecting the Right ERP system