Being a vendor/supplier for the automotive industry requires a keen sense of time and timing. Because of the number of parts inherent in vehicles, and the strict production scheduling necessary for assembly, automotive customers require very narrow windows of delivery dates.
"When the customer truck arrives on your dock on the expected due date, your parts products had better be waiting there for loading. Otherwise, it will be up to you, and at your expense, to ensure the parts arrive in Detroit or any number of various subassembly plants before their expected need date. Otherwise, it is certain you will lose the customer very quickly," Hasty explains. For Best Foam, additional expedited shipping expenses due to missed delivery dates was something that was considered the cost of doing business, but still a substantial cost nonetheless.
"Getting our company on track in terms of on-time deliveries has been the greatest benefit of acquiring Global Shop," Hasty insists. "Our on-time delivery has improved from the mid-80's to 99%, and this is the rate that our customers really demand. This year we spent about $500 in expedited freight, while before Global Shop, we might have been spending $40,000 or $50,000 per year on expedited freight. For us, this is a substantial cost reduction through the use of Global Shop. Clearly, the big change has been in our ability to see problems in advance through Global Shop and not waiting until the last minute to see that we're going to miss a due date and then have to foot the shipping ourselves."
Advanced planning and scheduling, as well as the auto purchasing features of Global Shop, are the primary reasons for the on-time delivery performance turnaround at Best Foam. This is particularly true when it comes to receiving unique parts from their own vendors. According to Diane Hasty, vice president of finance and comptroller of Best Foam, " Some of our components are specialty foam items and our suppliers sometimes only run them every six weeks or so-they're not part of their normal run. So if we miss placing our purchase order for one of these specialty parts, it could be a very big problem. The Global Shop Auto Purchasing system is a great help in not allowing us to make this sort of oversight in materials inventory."
Reduced Labor Costs
Another cost reduction benefit Best Foam has found in using Global Shop has been in the area of labor costs. Through the lean efficiencies offered by the real-time integration of system-wide data, Global Shop is able to reduce labor overhead through both cost accounting of each job performance, as well as the front office administration of functions such as payroll and purchasing. According to Keith Hasty, "We had three times as many employees in our Chicago facility as we do now before we installed the Global Shop system. With Global Shop, we've been able to re-engineer our labor tasking and, therefore, our labor costs. In other words, we've been able to streamline our operations-Global Shop, in the engineering area, has made us focus on processes. We're looking at the processes, making sure we understand where the excess labor was in a job, and in this, Global Shop has eliminated a lot of that excess labor."
Once Best Foam is able to eliminate excess labor, they can then go back through the tracking in Global Shop to see the profitability of a job. In these reviews, crucial decisions are made with regards to the bottom line. Often, it will be apparent that labor costs cannot be reduced enough to make certain jobs profitable, and so these jobs are considered for elimination. "Before Global Shop, we didn't have a good handle on knowing, first, what the labor should be, and second, what our labor costs actually were," adds Keith Hasty.
Diane Hasty agrees, observing that, "With Global Shop we've been able to get our various processes organized and run in different matters with our engineering BOM's. We've been able to reduce our labor from about 150 people before Global Shop to about 110 people today in the plant after the installation of Global Shop."
Labor tasking has been streamlined through Best Foam Fabricators' implementation of Global Shop Solutions robust ERP software. Here, lean shop floor production utilizes computerized precision foam cutting and finished goods packing all in a single-flow system guided by Global Shop Solutions.
"When the customer truck arrives on your dock on the expected due date, your parts products had better be waiting there for loading. Otherwise, it will be up to you, and at your expense, to ensure the parts arrive in Detroit or any number of various subassembly plants before their expected need date. Otherwise, it is certain you will lose the customer very quickly," Hasty explains. For Best Foam, additional expedited shipping expenses due to missed delivery dates was something that was considered the cost of doing business, but still a substantial cost nonetheless.
"Getting our company on track in terms of on-time deliveries has been the greatest benefit of acquiring Global Shop," Hasty insists. "Our on-time delivery has improved from the mid-80's to 99%, and this is the rate that our customers really demand. This year we spent about $500 in expedited freight, while before Global Shop, we might have been spending $40,000 or $50,000 per year on expedited freight. For us, this is a substantial cost reduction through the use of Global Shop. Clearly, the big change has been in our ability to see problems in advance through Global Shop and not waiting until the last minute to see that we're going to miss a due date and then have to foot the shipping ourselves."
Advanced planning and scheduling, as well as the auto purchasing features of Global Shop, are the primary reasons for the on-time delivery performance turnaround at Best Foam. This is particularly true when it comes to receiving unique parts from their own vendors. According to Diane Hasty, vice president of finance and comptroller of Best Foam, " Some of our components are specialty foam items and our suppliers sometimes only run them every six weeks or so-they're not part of their normal run. So if we miss placing our purchase order for one of these specialty parts, it could be a very big problem. The Global Shop Auto Purchasing system is a great help in not allowing us to make this sort of oversight in materials inventory."
Reduced Labor Costs
Another cost reduction benefit Best Foam has found in using Global Shop has been in the area of labor costs. Through the lean efficiencies offered by the real-time integration of system-wide data, Global Shop is able to reduce labor overhead through both cost accounting of each job performance, as well as the front office administration of functions such as payroll and purchasing. According to Keith Hasty, "We had three times as many employees in our Chicago facility as we do now before we installed the Global Shop system. With Global Shop, we've been able to re-engineer our labor tasking and, therefore, our labor costs. In other words, we've been able to streamline our operations-Global Shop, in the engineering area, has made us focus on processes. We're looking at the processes, making sure we understand where the excess labor was in a job, and in this, Global Shop has eliminated a lot of that excess labor."
Once Best Foam is able to eliminate excess labor, they can then go back through the tracking in Global Shop to see the profitability of a job. In these reviews, crucial decisions are made with regards to the bottom line. Often, it will be apparent that labor costs cannot be reduced enough to make certain jobs profitable, and so these jobs are considered for elimination. "Before Global Shop, we didn't have a good handle on knowing, first, what the labor should be, and second, what our labor costs actually were," adds Keith Hasty.
Diane Hasty agrees, observing that, "With Global Shop we've been able to get our various processes organized and run in different matters with our engineering BOM's. We've been able to reduce our labor from about 150 people before Global Shop to about 110 people today in the plant after the installation of Global Shop."
Labor tasking has been streamlined through Best Foam Fabricators' implementation of Global Shop Solutions robust ERP software. Here, lean shop floor production utilizes computerized precision foam cutting and finished goods packing all in a single-flow system guided by Global Shop Solutions.
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