Order fulfillment velocity makes the difference
Haydon Corp. fulfills orders not within weeks, but within hours or days
Haydon Corp. was an early adopter of business software, and it continues to use its enterprise resource planning (ERP) platform comprehensively. The software, along with standard business practices baked into the company’s DNA, has helped the roll former maintain an extremely short order fulfillment cycle.
Differentiation can be an elusive goal, not just in metal fabrication but in any business, and this is especially true when it comes to product and process differentiation. A manufacturer may protect a product design with a patent, but what if delivery is an issue? A product may be extraordinarily innovative with impeccable quality, but if it’s not delivered when needed, customers may not appreciate all that innovation and product quality. Suddenly, product differentiation isn’t so meaningful.
But what about differentiating with quick, reliable delivery—or, more broadly, time? Differentiating a business with time is what a lot of continuous improvement is about. Lean manufacturing, Eli Goldratt’s theory of constraints, Rajan Suri’s quick-response manufacturing, Kevin Duggan’s operational excellence, and other improvement methods all tend to focus on time.
Any waste in a manufacturing step, from quoting and order entry to the final shipment of that order, lengthens the time it takes to turn raw material into a shipped product. Can’t find tools? Produce too much work-in-process (WIP)? Have a bottleneck in engineering or order entry? Don’t have the information you need to start an order?
All of these prolong the time it takes to fulfill an order. And a short order fulfillment cycle is central to Haydon Corp.’s story.
Evolution of a Roll Former
Haydon got its start about 60 years ago in the Bronx as Haydon Boiler & Tube. It began as a contract manufacturer, offering custom roll forming and fabrication. Eventually the company migrated across the river to New Jersey and began producing hydronic baseboard heating and lock-seam tubing. The firm soon evolved into the product-line manufacturer it is today, with several thousand SKUs for various metal framing components, hydronic baseboard heating units, and rooftop support systems.
Haydon has plenty of product innovation. For instance, its rooftop support system has roll formed metal components sitting on a block of flexible material made of recycled tires. This makes the unit strong enough to hold pipe and other structures in their place, but adaptable enough to withstand temperature swings (freezing and thawing) common on many rooftops. But again, if Haydon had problems delivering this innovative product, the market might not have embraced the technology the way it has.
Early Software Adopter
Haydon started making metal strut framing about 20 years ago, and today it’s the company’s primary product line. The roll former has grown between 5 and 10 percent annually during the past five years, and now employs 125 people in two plants, one in Wayne, N.J., and the other in Grand Prairie, Texas.
A shop may have advanced metal cutting and shaping machinery, but the company’s information management systems may not be so advanced. Many times the bills of materials, the sales documents, inspection data, and other job information are stored in basic databases, Excel worksheets, and filing cabinets.
A typical software transformation story goes something like this: A fab shop owner and other top managers realize just how long it takes for an order to wind its way through the front office. They see the challenges of miscommunication. Why wasn’t the material ordered for this job? Why was this cut out of the wrong material?
Then they implement a transformation that often involves a new enterprise resource planning (ERP) system—and the data-migration challenge begins. After years of data being entered by different people into different homegrown systems, all requiring slightly different formats, the headaches ensue. The organization implements portions of the ERP program first, perhaps in the accounting and purchasing departments, then migrates the system to production. Certain software modules, like scheduling, may never be used.
Haydon Corp. does not follow this stereotype. The reason for that, according to President and CEO Adam Woods, can be traced back to his predecessor, Doug Hillman.
“He saw the benefit of using computers and software to manage a business,” Woods said. “We were probably one of the first companies in our industry niche to shift from manual paper and pen to MRP [materials resource planning] software. We did that 20 years ago.”
At that time Hillman was company controller, and as such he soon realized just how dramatic an impact the computer would make, even in a traditional manufacturing niche.
“When he was controller he began using PCs rather than maintaining a manual ledger,” Woods said. “Given that experience, he understood and appreciated the amount of help that using computers could yield in a business environment. So he set up software platforms that were adequate to support what our business needs were.”
Along with upgrading equipment on the floor to use CNCs and PLCs, Hillman also implemented ERP to drive most of the business processes, from selling, engineering, and ordering to shipping. And the business didn’t start using the system incrementally. “We jumped in with both feet and started using the full suite of tools that were available at the time,” he said.
Moving to the Cloud
When Woods joined the company in 2007, Haydon was already using all modules of its ERP platform, Macola. And about three years ago the company transferred its ERP from in-house services to the cloud, a transition that happened over a weekend. The company also continues to use all aspects of the software, Woods said, from purchasing and order entry to scheduling and production management. Today Haydon uses the latest version of the ERP software, Macola 10.
How did transferring to the cloud—and software implementation in general—go so smoothly at Haydon? Woods attributed this to two key factors. First, the company has standards in place for data entry and documented business processes, including accurate inventory counts and BOMs. This prevents the data from getting sloppy.
Woods pointed back to Hillman and the way he valued process standardization. “He was such a progressive person. We’ve been doing it for so long now. It’s part of our DNA. It’s just how we operate the business on a daily basis.”
Second, those standard business processes have tangible results. Orders that need to be completed don’t go missing or sit for days on somebody’s desk in the front office. When jobs hit the floor, they aren’t delayed because of missing material. There’s no chaos.
Today everyone associated with moving an order through the shop sees a dashboard displaying only the information that matters to that area. Accounting’s dashboard looks different from the one in customer service, which looks different in accounts receivable and accounts payable.
This streamlines work flow. In fact, Woods used “flow” to describe both work in the front office as well as parts on the floor. The company builds strategic levels of inventory for core products, based on sales forecasts. It partially builds the baseline components for some product families, stores that part or assembly as WIP, then pulls that WIP from inventory once a custom order is triggered. Completely make-to-order items are, of course, started only after an order is triggered.
The plant also has manufacturing cells in place for product families. Work flows from the roll former, often with inline secondary operations like punching and welding, to downstream packaging. Work comes off a roll forming line and immediately gets packaged for shipment.
Still, such shop floor velocity wouldn’t have the impact it does if it took forever for an order to make its way through the front office.
Woods described the front-office work flow as follows: “When a new sales order is entered, if we don’t have sufficient inventory of raw stock or purchased items, the inventory control manager receives an alert automatically and is prompted to create the work orders necessary to fulfill the customer order. Once generated [and needed material is in stock], work orders are immediately sent electronically to the appropriate plant manager, and the order goes out to our shop floor control system. Orders are printed and sent to the operators on the floor, giving them their operating instructions.”
These days it’s common to see shops move toward becoming paperless. Over the past year Haydon has moved toward being totally paperless for front-office functions. Invoices are emailed, not printed and mailed or faxed. Invoices received are scanned in as PDFs and routed digitally through the office for the needed approvals and payments.
But Woods doesn’t see the shop going paperless anytime soon, simply because of the nature of Haydon’s work. One big benefit of going paperless is to streamline changes and have “one version of the truth,” eliminating the potential for old work orders or job travelers floating around the shop floor.
Although Haydon is a make-to-order operation, it isn’t a job shop. It has consistent product lines, and while product design options are always in flux during quoting, once an order is entered, it’s rarely changed.
Another factor is the speed of order fulfillment. The less time it takes to fulfill an order, the less chance there is that order will change midstream. “We’re expected to turn quotes around in one business day or less,” Woods said. “Typically, our order fulfillment process is between 24 and 48 hours. The velocity of our business is one of our most important strategic assets.”
He added that velocity has been Haydon’s key differentiator. If it took longer for Haydon to turn a request for quote into a delivered order, the company probably wouldn’t be where it is today.
Images courtesy of Haydon Corp., 800-242-9366, www.haydoncorp.com.
Exact, 800-468-0834, www.macola.com
The FABRICATOR is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The FABRICATOR has served the industry since 1971.