June 12, 2014
O'Neal Manufacturing Services, a nationwide fabricator with 11 locations, makes smart use of data to refine capacity planning and sales forecasting.
As a steel distributor, O’Neal has offered value-added fabrication capabilities for years, but in 2011 the organization formally launched Birmingham, Ala.-based O’Neal Manufacturing Services, offering full-service contract fabrication with a national reach.
OMS—No. 2 on this year’s FAB 40—is coming off of a soft 2013 due largely to economic conditions, especially during the last two quarters of the year, with drops in agricultural equipment, construction, and railcars. But at this writing, several sectors seem to be on the rebound, especially in the construction sector. Meanwhile, agricultural equipment, after a slight rebound after last year’s slump, may be dropping a bit later this year. “This year our [revenue] projection is for us to be about right where we were in 2012,” said Matt Miller, OMS’marketing coordinator.
In 2013 OMS opened its 11th plant, an Oklahoma facility that previously housed an operation for O’Neal’s steel distribution business, to meet local customer demand. “Regionally, if you look at a map [of all OMS plants], it was pretty bare in the Oklahoma region,” Miller said, “so we’ll be looking to build up our customer base.”
Being such a large and spread-out organization has its benefits, especially when it comes to meeting capacity demands. For some of its work the company takes a dual PPAP (production part approval process) approach—that is, two facilities are approved to run the product to mitigate risk. If for whatever reason one plant can’t meet the delivery date, another plant steps up to do the job.
But OMS still is a custom fabricator and so must deal with all the variability that come with that environment. Managers are hoping to better predict all those variables with data. OMS’s recent software upgrades may show that data analytics has caught up with the complex world of contract manufacturing.
For instance, OMS has implemented sales and operations planning, or S&OP. The concept—and OMS’s custom data analytics software that syncs information with the company’s enterprise resource planning (ERP) platform—in part entails a rolling forecast based on the latest data and order histories. The system projects capacity requirements over the next year, which planners can compare with operational capacity charts to ensure OMS will be able to meet the requirements.
“This initiative allows us to have visibility of capacity requirements, to uncover where we might have shortfalls on equipment, and ultimately to be able to plan better,” Miller said. “And it will allow us to spend our money better out into the future.”
No prediction in business, including sales forecasts, is always accurate, but the initiative at least has given managers more information to work with. Over time the system will track trends, comparing forecasts with actual sales.
“It gives us the visibility to ask the questions,” Miller said. “We’ve talked with one of our customers that implemented S&OP, and their latest forecast was actually 91 percent accurate, which is phenomenal.”
The company has also deployed monitoring systems throughout its plants. The platform uses software called ShopLogix, which allows managers to see shop floor efficiencies on a real-time dashboard. It also provides a standard schedule for preventive maintenance and records unexpected downtimes.
Miller added that software and the data it gathers has helped OMS streamline and coordinate on a national scale. Monitoring software in one plant may show an overall equipment effectiveness (OEE) percentage at a certain work center performing a certain job. Another OMS plant may run a similar job on similar equipment and have a much higher OEE. Why? The data helps managers ask the right questions, uncover inefficiencies, and spread best practices throughout the company. For a fabricator with 1,400 employees spread across much of the country, that’s no small feat.
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