As a young engineer, starting out developing software solutions for manufacturing, I did get quickly involved in pretty much all aspects of production at the Japanese company for whom I was working. The software programs that I wrote were often used at the senior management “communications” meeting which took place on a Monday morning. Monday morning then, was a scramble for managers to get in early and review the data for the previous week, mainly in terms of quality, achievement, and materials. There was no Excel in production in those days, the data was all gathered by hand, word of mouth, in people’s heads, “managed” by production assistants who created the many overhead projector slides. In the meeting itself, it was almost never good news. Either there was a quality issue, or the completion target was not achieved, or some materials were late coming in from the suppliers which threatened the operation. My memories are of heated exchanges, arguments and discussions, all done over a hot projector. Things would be worse when there was market feedback of defects. It started out being rare, but as product technology progressed, the frequency of issues in the market increased. Overall however, the production operation worked well, run by many people who I always respected, were excellent in their fields, and still call friends today.
Except in one case.
There was a stock-check. Hated by everyone, since the whole plant had to be stopped, and all materials counted. The only computer system available was a home grown MRP system, which was actually quite effective (until 2000!) but, like all MRPs, did not have a great visibility of the actual operation on the shop-floor. All materials had to be counted manually. Everyone had to take part, the secretaries, the finance guys, purchasing, development, engineering, warehouse, quality, the whole lot. Worse still, this was done on Saturday and Sunday. Yippee……!
We still have not come to the worst bit. Monday morning, 6am, production managers and the finance director adding up the numbers, bits of paper everywhere, incessant typing, gasps and groans, the warehouse manager looking pale.
We still have not come to the worst bit. Monday morning, still, 08:30, the start of the communications meeting. Due procedure was followed, quality results, performance, and then, materials. I had not been through a stock check before, I had no idea what was coming. The numbers went up on the OHP, and, silence. To be fair, there were a lot of numbers, the first comment, other than the odd gasp, came after about a minute from the Managing Director, who asked “What is the scale of these numbers?” Thinking they were clever, the materials guys had expressed the quantities in units of a million, quite appropriate for the amount of materials that were being used, but, the scale was also applied by the finance guys to the amount of money that was being asked to have “written off” as “lost materials”. It was in the millions; millions of valuable (in those days) UK pounds. The next hour and a half of pure hell, which could be heard about half a mile away at the other end of the long production corridor, can best politely be summarised as the repetition of a simple question and answer, “What have you done with all those <expletive> materials”, and the answer, “We don’t <expletive> know”. The value that had to be written off was double the value of the profit that the operation had been on target to achieve that year. For many in that meeting, those who survived in the company, and for those who didn’t, life changed on that day.
This story, recalled from almost exactly 30 years ago, continues to happen to this day. As quickly as effort has been made, ERP systems improved, warehouse management systems coming in, the goalposts have moved, much faster machines, much smaller materials, a much higher product mix. I thought that even so, this situation surely cannot still be going on, but I was wrong.
The trouble is that in the electronics manufacturing industry, ERP kind of “gives up” on materials, everything is fine until it reaches the door to the shop-floor, after that, it is guesswork. Shop-floor based systems for material control also came along to help with the problem, but with traditional MES, the value added by these systems are often lost in the additional operational burdens that they impose.
The Valor MSS Material Management solution is different. Taking information directly from processes for the usage and spoilage, adding “Just In Time” materials logistics and warehouse management is a great solution, capable of feeding back materials information to ERP and maintaining a near perfect inventory, avoiding the lazy practices that lead to serious material attrition and obsolescence. I would say to the supply chain management, that though this initiative for materials excellence is being brought up from the shop-floor, who traditionally are the “bad guys” of materials handling, it is really a serious opportunity, unless of course you really like to suffer the materials write-off discussion in your communication meetings….