Software Solution Proves Enterprising for High-Production Custom Woodworking Company
Southern California-based His Life Woodworks improved its productivity and profitability by integrating its design, production, accounting and human resources software programs into one system.
A few years ago, Owner/President John Johnson needed an enterprising solution to improve the productivity and profitability of His Life Woodworks, the Southern California-based high-production, custom cabinet shop he began in 1978.
But, what he sought was unavailable. So Johnson's company improvised, fine-tuned and - by working with software vendor Planit Solutions - developed a system that would integrate the design, estimating, material management, production, human resources/payroll and accounting programs.
"I wanted to build our information structure first, even before we invested in CNC equipment," Johnson says. "[The information system] would make our ability to manage jobs better, which was critical, even before automation."
Two factors helped drive that decision, Johnson says. "One was [controlling] cost. I needed to find an integrated system which could allow us to see where - and on which projects - we were making money. Getting feedback like that on the job has [since] empowered us - and has given us the ability to make changes where they need to be made, whether it's the design of a cabinet or the process.
"Two, we needed to organize jobs [on the shop floor]. Through our experience, we found that while we identified ourselves primarily as a cabinet shop, we spent [as much] time on the accessories and embellishments," Johnson adds.
In addition to high-end cabinetry, His Life Woodworks manufactures entertainment centers, workstations, libraries, closets and bars, primarily for residential use. Ninety percent of the jobs involve solid wood or veneers, typically alder, red oak, birch and maple, with some requests for cherry, mahogany and paint-grade materials. The remaining 10 percent of the jobs are manufactured from melamine panels.
"Because of our diversity, we [can do] a wide range of jobs. We probably have 100 jobs running through the shop at a time, from one end of the process to the other," says Gary Brim, partner/vice president of manufacturing.
The company's products are sold exclusively in the South Bay, CA, area, strictly by referral. Approximately 60 percent of the business is from new construction commissions, often initiated by the architect, builder or owner of a $1 million to $5 million home.
Typically, after the initial query is made, the company's full-time designers/project managers meet with the customers to discuss their specific needs. Using Cabinet Vision's Solid estimating and CAD program, a design is generated and sent to the customer for approval.
Once approved, the information is e-mailed to Brim at the plant. Brim verifies the information, then downloads it directly into the Planit Enterprise software program for production scheduling and material purchasing.
"Our cutoff date is Wednesday, 10:00 a.m. By Friday, Gary will have all the jobs into scheduling," Johnson explains. "We use the same program also to schedule our drivers." The average turnaround time is one to two weeks for unfinished cabinetry and furniture, and four to five weeks for finished projects, depending on the complexity of the job.
In addition to project forecasting, Enterprise software also enables the company to track work in process and labor allocation per project.
"We also are able to track all of the costs per project," Johnson says. "When it comes to bidding future projects, we have been able to use the information we have received and adjusted our bids accordingly. We track the time it takes to mill, assemble, finish and final assemble all of our projects. We don't have to rely on a month-end statement to know how we are doing. This has put us in the driver's seat far more than we could have imagined."
Once a job is entered into the computer system, the information is downloaded directly from Enterprise to the shop floor. Five strategically-located computers on the shop floor enable employees to link to the program.
The computers on the shop floor function like a time clock, but with expanded capabilities. Prior to starting a job, each employee enters his ID number, the department, function and job order of the particular project. This enables His Life Woodworks to not only identify which employees worked on each portion of the project, but to track where a particular project is in the system, as well as the actual vs. estimated time needed for each job.
"We can also do more specific tracking," says Chris Chapman, controller. "Because this is tied into our human resources database, we can, based on an employee's wage, further calculate the actual labor costs.
"With actual labor and material costs data now accessible, we can figure out the actual profit," Chapman adds. "We also can give production GÃâ¡ÃÂ¿goals' based, not only on the estimated figures, but also on the recent GÃâ¡ÃÂ¿history' of that type of job."
Other factors also have contributed to increased productivity within the shop. According to Brim, productivity has shown marked improvement in the last two years, in part, due to the reconfiguring of the plant following the company's move into its current 28,000-square-foot facility in December 2003. Equipment is laid out in cells, with the entire production process now under one roof.
All projects begin in the milling area, where panels are cut to size on an SCMI Sigma 65 beam saw. Jobs requiring routing, drilling, dadoing or other specialty work are sent to the Komo Mach VR510 CNC router, which the company purchased a couple of years ago.
The use of CNC equipment has enabled the company to reduce the number of employees in the cutting area from four to three. "Our output increased 20 percent, with 25 percent less people," Johnson says. "Plus, our accuracy has improved."
Employees are cross-trained on the machines, including the CNC equipment. Not only does this alleviate potential bottlenecks, but it also allows for some job diversity within the individual departments, Brim adds.
Other equipment in the shop includes a Timesavers sander and a Delta RT40 saw. A newly-acquired Brandt Profiline single-sided edgebander will be installed shortly to replace an older edgebanding machine.
According to Brim, the company also is looking to purchase a new flatline finishing system, which would speed production and help the company further comply with Southern California's recent VOC finishing reductions that went into effect on July 1, 2005.
Currently, HVLP spray guns are used to apply water-based and specialty finishes. "Our specialty finishing is what helps set us apart," Johnson says.
"We have a reputation for producing furniture-quality finishes, and we want to keep that reputation intact," Brim adds.
The Enterprise software enables the company to maintain detailed records of actual vs. estimated material usage, on items such as finishes, panels, hardware, etc.
"It has really helped streamline our inventory control," says Bill Rios, purchasing manager. "We maintain an inventory of one- to two-week's stock on basic materials like melamine panels, and a one- to two-month's supply on the specialty mouldings."
Prior to the software, Rios says, "Everything was done manually. We had to hand copy the purchase orders; everything was written on paper and you had to track down where in the system everything was.
"With the new system, the records maintained include when [an item was] purchased, from where, what's backordered - you can do a whole purchasing history," Rios adds.
The software also tracks purchase orders, with regards to which are open and which are closed, and links into QuickBooks' accounting capabilities.
"What's great about this is, from an accounting standpoint, I can see that the P.O. price matches the invoice, providing checks and balances," Chapman says.
Other benefits of the software include improved allocation of customers' job deposits and notification reports for when to bill customers during the production cycle. "Accounting now ties into the production schedule, so [Enterprise] can send out an alert on when to bill the customer. It has really streamlined the process between production and accounting," Chapman says.
"It enables us to analyze all the data to make any strategic decisions," Brim adds.
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