Fletcher Wood Makes a Case for ERP Software

By Jonah Coleman | Posted: 12/05/2013 3:24PM

 

During the mid 2000’s, Fletcher Wood Products had an information problem. In some areas, we had enough data being collected but the only access to it was through a text-driven, DOS-based database program. In other areas we were in the same boat as everyone else (and many still are today): information locked up in spreadsheets, printed papers, and key personnel’s brains.

Fletcher Wood Products was started in 1961 as a building-cabinets-out-of-the-garage operation. Today we are primarily a commercial shop with revenues of $1.5 to $2 million specializing in plastic laminate cabinetry, solid surface counters, and monumental work such as reception desks. We sell mainly within the state of Iowa, but routinely ship to neighboring states. Occasionally we do work at longer distances.

The owners encourage entrepreneurial risk taking. We have always been on the front end of technology; we purchased a CNC in 1996 and wrote our own software to nest and generate machine code for our then-preferred cabinet design software package (Cabnetware). We used our software to generate labels, track purchasing, and track the labor we spent on jobs.

Looking to solve the previously mentioned information problem, we looked into the ERP (Enterprise Resource Planning) software packages on the market. We dropped our own nesting and code generating software by purchasing Vero Software’s S2M Center. The new software simultaneously gave us better yields/performance and freed us up from having to fix and maintain an in-house software package. That freedom wouldn’t last, however- because we were unable to find any ERP packages that met the needs of a company our size, we decided to write our own.

The one thing we did not want to have was a significant amount of time spent entering information into our computers, and that was exactly what the ERP packages we could find required. Many of them basically required a full time person to do nothing but keep the computer up to date on activities and requirements. Because the vast majority of our work was first entered into design software, we thought we could do better; we wrote “Enterprise Manager”- our in-house ERP software project. We also moved to a design software package from which we are able to extract more information and automate more processes- Vero Software’s Cabinet Vision.

Instead of a person entering requirements, our software generates a work order directly from the code we generate to run our CNC machine. The work order has information on the CNC sheets needed, the joinery on each part, the banding on each part, the final assemblies created from the parts, and more.

At each stage the operations on the shop floor drive the data- nobody has to constantly update the computer. When the CNC operator is ready to cut a sheet he transmits the code from our software to the machine- at that point the inventory is charged to the job, barcoded labels are printed for each part/offcut which indicate what edges need banding/joinery, and we are able to track progress. When the edge banding operator is done with a part he scans it. When the assembler is ready to begin a new work order, he scans a part and can view a complete bill of materials, allowing them to be gathered before assembly begins. He gets a 4x6 label for each cabinet that lists that cabinet’s materials- door sizes, drawer box sizes, lock key #’s, drawer guide model #’s, etc. Any special notes placed on the parts or assemblies in our design software are included- communicating them to the assembler at the time when they are most relevant.

We again scan the assembly when it is completed, allowing us to immediately charge the inventory for that assembly to the job and to track status. Lastly, we scan our products as we load them onto a truck for shipment to a job site.

As a result of recording these shop floor activities (which adds very minimal overhead- the activities themselves were going to occur either way) we now have incredible insight into the production flow in our facility. Because Enterprise Manager knows all the work that we have to complete, what materials are required to complete the work, how much labor will be required to complete the work, and how far along the work is at any given time it is able to show us a larger picture than we were able to see with our old systems. It is also able to assist us in ways that were not possible before- for instance, it can efficiently order inventory in a just in time manner, show where constraints will cause holes in our schedule, and much more.

The keys to our system are driving the data with shop floor recording, and presentation of the information to the right people at the right time. Whenever a user opens our software, they are first taken to the “Home” screen, which is a list of items which require the user’s attention. For example, a person in a project management type role might want to see a list of jobs that need reviewed, notes from the shop floor about products made or delivered (perhaps they had some damage), parts which have been scanned on the shop floor as being damaged and needing re-cut, work orders that are over-due, etc.

Having such information available on a moment’s notice has changed our business, permanently. We don’t have to guess when a particular product will be complete- we can simply pull up the manufacturing planner and see. We can rapidly see the outcome if we changed the order of our work- we can predict periods where we will have low activity, and take action before we get to it. We have great insight into which vendors perform best for us, and in what manner we can secure the lowest costs. When a contractor tells us he did not receive a particular item, we are able to tell him with great confidence whether he did or did not- we know whether it was fabricated, and we know whether (and what time/by whom even!) it was put on a truck.

To the surprise of many, we have shared our software freely. Currently there are over a dozen companies using it in various respects- some with revenues less than $250,000 per year and some greater than $6 million. Having to keep it working for companies other than our own has turned out to greatly benefit us in a number of ways- we get better software because the bugs are found sooner, we get more innovative software because we get ideas and suggestions from a diverse base, and we are more able to rapidly adapt to job or market conditions because our software already supports multiple methods of doing things and because we are constantly exposed to new ideas from the base of users. For these reasons we have been willing to allow outsiders to use our software at no charge.

The greatest payoff for our efforts came during the great recession, when our sales level dropped by 25% for two years in a row. Our information systems allowed us to order in a very just in time manner, minimizing the amount of cash required to run our operations. Our forecasting abilities allowed us to make intelligent large purchases for favorable terms, again saving money and helping cash flow. While other companies hunkered down, we actually increased the time and money we invested in information systems- and they pay back has been incredible. As the slowdown eased, we saw our profitability rise dramatically.

We believe information systems are going to be the next determinant of which companies succeed and which fail. Just as you could not effectively compete today in the commercial millwork industry without automation, you will soon not be able to compete effectively without information systems allowing immediate response to changing time frames, requirements, and rapid turn-around times. We are well-positioned today, and expect that our willingness to continue to change will serve us well in the future.

Jonah Coleman has been in the woodworking business since 2007 and is currently the project manaager at Fletcher Wood.


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