Midrange Stuff, OS/400 Edition

The IT departments of most companies are always busy, but at times their efforts aren't focused on areas where the biggest contributions can be made. The top management at PK U.S.A. recently called upon its IT department to get more strategically involved, and that's when their OS/400-based ERP system came to life.

PK U.S.A. manufacturers metal automotive body parts, chassis components, and plastic injection molded parts in an ultramodern, 317,978 square foot facility in Shelbyville, Indiana. The car you own could very well have pieces made by PK U.S.A., given that it's a tier-1 and tier-2 trading partner in the supply chains of industry big wheels like Nissan, Isuzu, Suburu, Mitsubishi, Honda, Saturn, and others.

By necessity the industry is fixated on controlling cost. Forced into heightened levels of efficiency by their clients, companies are pushing to finding new ways to get more out of existing resources. Randy Burket, manager of information services and technology at PK U.S.A., says, "They come back asking for money, and we try to make up that lost revenue in productivity and being in a constant state of improvement."

When Burket was hired two years ago, upper management asked him to get the IT department more strategically aligned and to find ways in which IT could improve manufacturing efficiency. Until then, Burket's team of four employees, which includes three programmer/analysts and a network engineer, had seen their role more as a tactical one--keeping the system accessible and performance acceptable at the 360-plus-person, 24/7 facility. PK U.S.A.'s system environment consists of an IBM iSeries Model 820-2435 and 11 Microsoft Windows NT servers, all networked through Windows 2000 Server.

"I made a commitment to evolve IS into more of a strategic partner in the business, and to really begin mining the strength of the ERP technology we'd had in place for years, technology that we hadn't been fully exploiting," Burket says.

For years PK U.S.A. licensed an integrated ERP solution called CMS/400 from Toronto-based CMS Manufacturing Systems. The company had purchased the system in 1996, but, for many reasons, never fully deployed it. Spreadsheets prevailed in some areas, largely because of a malady common to many companies: cultural resistance to change. "You would be amazed at what you can do with a spreadsheet," says Burket.

While others in the manufacturing resource planning space often focus on large manufacturing companies, CMS Manufacturing Systems defines its niche market as small and midsized manufacturers. CMS/400 provides ERP and supply chain management for manufacturers embedded in tight supply-chain relationships, which are common to makers of automotive parts, electronic components, consumer goods, and metal fabricated/plastic molded products.

Because the lifeblood of PK U.S.A's business is on the manufacturing floor, Burket decided nine months ago to work more closely with the manufacturing department to uncover ways to improve processes with the ERP system. "They know manufacturing, and we know our software and what it's capable of in areas so critical to automotive suppliers--namely, just-in-time production and cost control--so, strategically, it makes sense to combine the expertise of the two departments," Burket says.

The company decided to focus on automotive assembly areas. Each of PK U.S.A.'s automated assembly areas is dedicated to a major customer. The auto industry, more than others, has set very narrow windows for the shipment and receipt of parts. Interruptions in production caused by depleted raw materials or other inaccuracies can cause delays and be very expensive to participants in the supply chain. "We have never missed a shipment, but there have been several instances where we have had to expedite shipments and pay high airfreight charges."

Burket also notes that responsiveness and accuracy are very important, such as "making sure that what we send our customers is exactly what they ordered, and that they get the proper documentation," Burket says. "If it's not right, or not delivered in a timely manner, you can actually shut their assembly plant down. That's a bad thing, by the way. In automotive, that's about as bad as it gets."

Thus far, PK U.S.A. has used CMS/400 to scan metal coils and track them through the stamping process, so they would know where the coils are being consumed. As the stamped parts move to one of the automated assembly areas, where robots perform bending, welding, or assembly operations, Burket identified a gap in the tracking process. "We lost sight of the part and the assembly until it moved out of the assembly area into machining. I wanted to be able to scan parts in and out of a resource or to track it through a particular location on the shop floor."

Given these findings, work in process and resource allocation were the areas Burket chose to attack first. He installed a module that let workers on the shop floor access barcode labels for continuous tracking. Now barcoded containers are scanned as they move through the stamping process. Manufacturing managers using CMS/400 are able to identify the specific location of every part throughout the shop floor. "This has greatly improved workflow on the floor," he says. "We can see where things are."

Improved work-in-process itself qualifies as a work in process, however, as it is deployed only in stamping. "We'll add it to assembly and plastics this year."

Visual desktop tools in the product let PK U.S.A.'s department and executive-level managers monitor the productivity of each shop floor resource in real time. According to Burket, "If a resource is not performing to the operational, material, or labor throughput efficiency goals we've set, management knows immediately." Historical data is also available for comparison.

So far, six months have been spent in tying CMS/400 5.0 more deeply into the company's manufacturing process. Have the benefits been worth the effort? "It's helped us reduce the amount of raw material in-house at any given point by 50 to 60 percent from the past year," Burket says.

PK U.S.A's IT department now spends about half of its time supporting infrastructure and the other half on new projects. "We will integrate three more CMS/400 modules this year, including MRP [manufacturing resource planning]. For us, scheduling and forecasting are the key pieces within MRP," he says. He also plans to migrate the Inovis EDI/XML supply chain system from a Windows NT server to the iSeries and integrate it with CMS/400. "That single point of failure on the PC is kind of an ugly thing for us," he says. "I don't like having a critical business process based on a PC."

PK U.S.A.'s IT department plans to work CMS/400 harder over the coming months to better control raw material, labor, and equipment resources. "We are trying to plan farther ahead. Once we get all these modules installed and start using them the way they are intended, it should reduce the amount of busy work that the office people have to do," Burket says. "These people can be adding value in other ways. A lot of the things we do are paperwork-intensive. If we let the computer do its job, then we don't have those issues anymore."

Robert Gast writes about a variety of IT subjects for Guild Companies publications. E-mail: evantgroup@aol.com.