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Having the right information at the right time

Information management central to fabricator’s operational strategy

Figure 1
Doug Brown, who took over as president of Advanced Metal Components in 2001, stands next to a product for Flex- Qube (www.flexqube.com), a new customer that designs modular carts that can be reconfigured for various material handling applications.

When Doug Brown stepped into his first business class in college, he knew he had done more than just change a major from engineering (see Figure 1). It wasn’t just to avoid struggling through courses on electromagnetism (which he did). This first day back at college didn’t really represent a new chapter in life. It was an entirely new book.

In 1995 a small plane flying out of Swainsboro, Ga.—between Macon and Savannah and not far from Vidalia-onion country—attempted to make an emergency landing near the Augusta, Ga., airport. It crashed into an adjacent office building, killing all four aboard, including Richard Brown, Advanced Metal Components’ president, founder, and father of a student who was then feverishly studying at Georgia Tech in Atlanta. The tragedy, which also claimed Don Braswell, AMC’s engineering director, might have shuttered the business. With a bigger-than-life personality, Richard had been a driving force. But the people at AMC pushed on.

In 1997 the company was in the middle of transition. It was then the shop made its first earnest effort in lean manufacturing and continuous improvement. After rearranging machines, then rearranging again, then improving its enterprise resource planning (ERP) and controlling inventory, and by working toward diversification but also taking care of key accounts, the 130-employee fabricator has since evolved.

Ironically, the shop floor actually looks a lot like it did in the 1980s, with a traditional departmental layout. But now when you ask a manager about inventory, he or she knows how much raw stock, work-in-process, and finished goods there are. And the manager knows when problems arise and fixes them quickly.

According to Doug Brown, the key has been having the right information at the right time, and getting that information boils down to having the right people and processes in place. It also required a shift in thinking about what constitutes a “productive” shop floor employee. To be productive, people don’t necessarily need to produce parts.

A Bit of History

In the 1970s Richard Brown worked for his uncle who owned a Glenville, Ga., manufacturer of blades and spare parts for outdoor power equipment. After running the stamping operation for a few years, he decided to strike out on his own. In 1977 he launched AMC (originally named Manufacturing Services Inc.) in a little space leased from an electroplating shop in Swainsboro—just he and his wife Regina, a shear, and a stamping press. The location made sense; he would stamp components, then carry them across the building to be electroplated.

A few years later he bought a property across town and gradually expanded throughout the 1980s, adding on to the building every other year. After a name change to Advanced Metal Components Inc. in 1986 and years of steady growth, the facility snaked around the property. It became clear that AMC needed to move to a larger place. In 1989 the company found one, a 60,000-square-foot spec building from the local development authority (see Figure 2). It was a shell with a dirt floor that AMC could customize to meet its needs.

There AMC has remained. The open space gave managers flexibility when it came to shop floor layout. In 1997 the company’s first major lean implementation resulted in specialized workcells dedicated to certain customers or product lines. It made sense at the time. After all, parts continually flowed from cutting to bending to welding: Why not place all of these processes closer to each other?

So they placed one laser next to three press brakes, next to one or two welding cells, and declared that the cell would produce only one product family. But, of course, AMC is a contract fabricator, with changing product mixes and demand levels, so managers found themselves needing to move machines periodically to meet changing demands from new and existing customers—more press brakes there with different tooling or tonnage, another welding cell here, one fewer welding cell there. It wasn’t easy to move all these machines, of course, and it became a bit of a wild-goose chase.

Today AMC’s floor looks more like it did in the 1980s, with the traditional departmental arrangement, although now with a more direct product flow in a rough U shape through the facility. Material comes in the rear receiving doors, goes into raw stock, and then to Amada and TRUMPF punching and laser cutting machines. From there parts flow to forming (including TRUMPF and Amada press brakes, a RAS Systems folding machine, and a Salvagnini panel bender), welding and grinding, then powder coating, kitting and assembly, packaging, and out the rear shipping doors.

Figure 2
After a decade of significant growth, AMC moved into this 60,000-sq.-ft. facility in 1989.

It goes to show that for job shops and contract fabricators, customer mix ultimately drives what works, and for AMC’s mix of customers, cells just didn’t work. But a close look at the shop floor reveals evidence of lean thinking is never too far away. For example, the company uses few fork trucks; instead, it transports most jobs between operations on wheeled carts (see Figure 3).

Inventory Control

Material has always been one of the most expensive line items on a metal fabricator’s financials. In this year’s Financial Ratios & Operational Benchmarking Survey from the Fabricators & Manufacturers Association International®, more than half of respondents reported that direct material costs were more than 32 percent of sales, and a fifth of respondents said material costs made up more than 41 percent of sales. Inventory can act as insurance to make sure AMC can meet immediate customer demand. But inventory can’t make payroll, and too much of it can put a serious damper on cash flow.

Like any fabricator, AMC’s profitability may take a hit, depending on order volume and the activity level from larger customers. But according to Brown, AMC has been able to weather the storm with a steady cash flow.

The shop has used enterprise resource planning (ERP) since 1985. According to Brown, AMC was one of Global Shop Solutions’ early customers. But as the years progressed, AMC didn’t add every new feature, including some that related to inventory control. The operation didn’t seem to be clicking. Machines churned out parts, but the company didn’t have a good handle on its inventory. Parts got lost and had to be remade, and overproduction was a significant source of waste.

This all changed four years ago. After much preparation, AMC initiated the lot-bin inventory control capability of its ERP system, and the situation changed almost immediately. Brown recalled the day it happened. “All of a sudden jobs started moving. It seemed that with a flip of a switch, the operation started to run cleanly. We started to make more money, and we weren’t losing parts and having to remake them. It had a huge impact, and it really took us from being worried about breaking even every month to consistently making money.”

The company started using bar codes on all material and at inventory locations (see Figure 4). It also hired several employees—what the company calls MTSs, or material transaction specialists—who don’t operate machines but instead perform the transactions that track material. The company has found that knowing where material is, and how much is available, is just as important as fabricating that material into things of value.

Brown admitted he had a difficult time swallowing this idea. Hiring a few people just to track inventory seemed like he was adding unneeded indirect labor. Why employ somebody on the shop floor if he can’t weld or run a machine?

But the move has paid off significantly. A press brake operator may turn into the most productive forming technician in the world, but if his parts don’t flow through the shop and out the door any faster, overall lead-times don’t change, and so the customers don’t notice. But combine machine expertise with people who track material, and managers know where everything stands. They at last know what they have, why the overall lead-time is what it is, and have a baseline measurement for improvement.

For key customers the company manages a kanban replenishment system. For years the company instituted a replenishment point just before powder coating. When the customer called for an order, technicians pulled parts out of the inventory location and hung them on the powder coat line. Workers then powder-coated parts, took them right off the line, and packed them into returnable containers, reducing parts handling.

At the time, having a kanban replenishment point before painting made sense for many products. Painted parts have more cost associated with them and are difficult to handle without scratching them. But this system also created welding bottlenecks. AMC employs highly skilled welders, and bogging them down with work to build both inventory as well as items due immediately didn’t make sense. So now the principal replenishment point for most of the company’s consistent repeat orders is just before welding.

Figure 3
Wheeled carts stage low-volume jobs for AMC’s forming department. The company uses few fork trucks.

Shop Floor Experience

From welding, parts flow to coating, assembly, kitting, and packaging (see Figure 5). The shop uses automated shrink-wrap systems, both a standard vertical system as well as a horizontal system, which can stretch shrink-wrap under pallets.

Brown sees the value in those shrink-wrapping machines, not just from a productivity standpoint, but from the worker’s standpoint as well, mainly because he has experience with the job. Applying shrink-wrap manually to a heavy load is neither ergonomic nor safe.

“I remember how much of a pain it was,” he said.

Working at his father’s business had always been the plan, but after the plane crash in 1995, things took a dramatic turn. He took a break from Georgia Tech and went to work at AMC, operating turret punch presses, applying shrink-wrap in the shipping department, and basically learning the ways of the shop floor. After taking a semester off he returned to Georgia Tech and changed his major to business management.

Gradually Brown’s perspective changed. Some of his most distinct memories of the shop relate to machinery and the technical wizardry of it all. He recalls seeing the first turret punch press equipment being installed. To a 10-year-old, the machine was a mountain.

That awe continues to this day, but it has taken a different angle. He admires the new press brake automation, both the robotic variety, with integrated cameras and other sensors that show the robot how a part is oriented, as well as some of the new automated tool-change capabilities on manual brakes. The awe comes not from how quickly these machines produce parts (and the productivity is jaw-dropping), but from their setup reduction potential. The shop hasn’t taken the plunge to full-blown bending automation yet, but it has purchased several new press brakes. Offline programming and advanced controls have reduced changeovers to about 10 to 15 minutes.

Why Communication Matters

Dealing with demand variability may be one of the most challenging tasks a contract fabricator must face, and AMC balances various elements to manage it. First, Brown said, comes communication, especially with the company’s key customers. For its top account, AMC employs an individual who works inside the customer’s plant (just recently the rep started working with another customer in the area). The representative knows the customer’s assembly line, monitors orders that arrive at the plant, and ensures the line stays running.

Mistakes are rare, Brown said, but they do happen, and AMC’s representative at the customer plant can catch those mistakes before they cause any manufacturing disruption. He sees the assembly line in action daily; knows its challenges; and suggests ways that AMC could help, be it small design-for-manufacturability changes or anything else.

Brown added that managers monitor the product life cycle for all customers and ask whether any product changes are on the horizon. It’s not perfect, because no one can predict the future, but it helps give AMC the intelligence it needs to mitigate the risk of holding inventory.

Strength in Family

Soft-spoken, Brown explained how different he is from his father. “He had a big personality,” he said. “He could have been a successful politician if he wanted to be. Connecting with people was his gift.”

Figure 4
At this replenishment inventory location before welding, formed components are stored in labeled and bar-coded locations.

His father was an engine for early growth at AMC. A talented engineer, he loved people, machinery, and technology, but “when it came to the finance and business side, my father sometimes complained that he didn’t know enough,” Brown said. “He knew the engineering side, but when it came to the financial side, it wasn’t in his wheelhouse. He used to say that he wished he had more of a background in finance, accounting, and management.”

That drove Brown to major in business management at Georgia Tech, which in turn led to working at AMC as head of the engineering and sales departments.

Several years later, in 2001, Brown moved into the leadership role as president of the company.

On the wall in AMC’s lobby are posted several notes from local business leaders, as well as one from the office of Georgia’s governor, sending their regrets about the tragic event during the summer of 1995. It’s obvious that those at AMC do not forget and, for the past two decades, have persevered. In a way, it shows how strong a family business can be.

Figure 5
The kits of parts, ultimately to become an equipment enclosure, are shrink-wrapped and ready to be shipped to a customer.

About the Author
The Fabricator

Tim Heston

Senior Editor

2135 Point Blvd

Elgin, IL 60123

815-381-1314

Tim Heston, The Fabricator's senior editor, has covered the metal fabrication industry since 1998, starting his career at the American Welding Society's Welding Journal. Since then he has covered the full range of metal fabrication processes, from stamping, bending, and cutting to grinding and polishing. He joined The Fabricator's staff in October 2007.