By Duane Lundell


An integrated software system allows a woodworking mill to redeploy workforce in a more productive manner.

 

A new enterprise resource planning (ERP) system saves Albertson Stores Mill $400,000 annually in labor costs and freight charges. The system handles every aspect of our manufacturing operations including estimating, order entry, scheduling, time keeping, job costing, purchasing, woodworking tool inventory and financials.

     
 
Albertson Stores Mill makes all of the wooden fixtures, including counters, cabinets and shelves, for Albertson’s Inc.’s 2,400 retail stores.  
     

        Because the modules all work from the same database, it is no longer necessary for our personnel to re-enter information when transferring it from one application to another. As a result, we have redeployed four office workers, saving $200,000. Instead of a quarterly manual inventory the software keeps track of inventory on a daily basis, saving us $150,000 that was spent annually taking inventory. The new system saves us another $50,000 on air freight annually because the mill almost never misses a ship date. Since installing the system, we have also been able to reduce prices because it is no longer necessary to build in an allowance for material cost inaccuracies.

Albertson Stores Mill (formerly American Stores Mills) is a division of Albertsons Inc., one of the largest retail food-drug chains in the United States. Albertson’s merged with American Stores Co. on June 23, 1999, and acquired Albertson Stores Mill simultaneously. Based in Boise, ID, Albertsons currently operates more than 2,400 retail stores –– a number that is growing rapidly. In 1998, the company opened 132 stores and remodeled more than 50 others.

Albertson Stores Mill manufactures all the wooden fixtures for the parent company's stores, including check stands, the shelves and cupboards of the pharmacy, the counters and cabinets of the photo department, the bakery cases, the produce tables, and even the decor on the walls. We have 130 regular employees but can have as many as 200 people working there during busy periods.

Our employees use a variety of computer-controlled woodworking tools, including three Holzma CNC panel saws, three Busellato CNC machining centers, a Weinig moulder, and two Brandt edgebanders. To keep up with Albertsons rapid growth, the mill operates 24 hours a day, seven days a week.

Fast Growth

The previous manufacturing system, designed when we were not as busy, did not provide the timely information needed to handle our new level of operations. It consisted of several different stand-alone DOS and Windows-based spreadsheet and database applications. Each handled a single function, such as purchasing or scheduling. Although we tried to develop interfaces to transfer data automatically between applications, the incompatibilities of DOS and Windows limited our success. Most of the time, data that was already in one application had to be re-entered into another.

Aside from the labor involved, there were other drawbacks to the lack of integration between the different applications. They were not updated on a daily basis, so we lacked the up-to-date information needed to make decisions. For example, because it took up to a week to enter information from the labor tracking application into the scheduling program, jobs that we had recently completed still showed up on the schedule.

Also, while the mill typically tries to have a four- to six-week turnaround on regular orders, it could take two weeks to get all the information to purchasing after the order was processed. With two weeks needed to obtain the materials, that left little time for actual construction. This was a costly problem because there is only a short window at the stores in which a contractor is available to install the fixtures. If we did not complete a job in time to ship it by truck, it had to be shipped by air.

For these reasons, Albertson Stores Mill decided to replace the piece-meal system with one in which all functions are integrated. After making a list of 15 selection criteria, we started to search the Internet. After finding 10 programs that met our basic requirements, we narrowed the choices to three, and invited those vendors to come in and give demonstrations.

     
 
The new ERP System from Lilly software has allowed Albertson Stores Mill to reduce its prices because it is no longer necessary to build in an allowance for material cost inaccuracies.  
     

        The system that seemed best suited to the mill's needs was Visual Manufacturing from Lilly Software Assoc. Inc. This program offered well-integrated modules to handle every aspect of our data management needs and was built from scratch to operate on Windows. Another point in Lillys favor were reports from other customers that the company's service and support were excellent.

An Integrated Process

Now when we get a purchase order the information is immediately entered into the systems sales order module, which derives all the material requirements and makes them available to the systems MRP module.

Once or twice a day, a purchasing agent checks the MRP module, where the new material requirements are highlighted. By tabbing over to the inventory module, the agent can see exactly which amounts of residual materials are already at the mill. Visual groups common materials that are required for multiple jobs so that they can be purchased in a single step for better quantity discounts.

The job then moves to scheduling. The software provides the option of either scheduling forward from the current date, or backwards from the due date. Both types of schedules take receipt of purchased materials into account. We get a “want” date from the customer, which is usually four weeks into the future, and have the software schedule backward from that date.

The scheduling module takes into consideration the mills three departments: cutting and detailing, assembly and painting. It is also aware of how much time each department needs for a certain type of job. We take advantage of the softwares finite scheduling capability to determine when the job will be completed, assuming that it runs after jobs that are currently in the schedule. The schedule is recalculated every day.

The mill generally processes jobs in the order that they are received, but when there is a rush job it is a simple matter to change the schedule to accommodate it. The user simply opens the softwares scheduling window and changes the want date for the job. The software sorts the jobs by want date.

Because we did not want to change too many things at once, we still use a manual timecard system to keep track of labor. Employees enter information such as work order number, labor card number, and time spent on a process onto the cards. A clerical employee enters the information into Visual every day so that by 1 a.m., we know exactly how labor is being allotted. The system has the capability of capturing labor data by means of a bar code reader, and we plan on implementing that in the future.

We also track the progress of jobs by means of a customized window. It is a slightly condensed version of the system's standard manufacturing window, which brings together all of the information needed to understand the status of a job in a single screen. This screen shows what materials are in the shop, what operations have been completed and when the remaining operations are scheduled.

The mills custom window shows where jobs are based and which department has marked them “completed.” For example, if assembly has marked a job complete they know that it is in the paint department. We can tell how much longer it will be there by looking at how much labor in the paint department has already been attributed to the job. This window, basically a query to the MRP module, is run every morning. If there is a question about a job, the user can go back to the softwares standard manufacturing window and drill down to get more details.

     
 
The ERP system tracks the process of a job by showing what materials are in the shop, what operations have been completed, and when the remaining operations are scheduled.  
     

        Price Reduction

When we were using multiple, stand-alone programs, changes to material and labor prices could take two to three weeks to show up. Quotes were sometimes made using six-month-old information, and since it was not possible to guarantee that prices were updated fast enough, the mill added 5 percent to its quotes to account for price fluctuation.

Now when a price changes, each application has that information so everyone is aware of the change immediately. As a result, we have been able to eliminate the 5-percent charge, making our prices more competitive and helping to win new projects.

We have experienced other benefits from the new system that are harder to quantify. For example, employees routinely save several hours per week not looking for a part that has not arrived. With the new systems receiving and tracking functions, people know exactly whether a part has arrived and where it is located. The system also gives us a better understanding of where waste is occurring. When the software indicates that an area has an excessive amount, someone goes and talks to the operator and finds out why.

Overall, the implementation of Visual Manufacturing has improved the efficiency of Albertson Stores Mill, resulting in many direct cost savings. By improving communication between different aspects of operations management, this woodworking tool has made it possible for us to handle the parent company's explosive growth.

Duane Lundell is plant manager of Albertson Store Mills, Payson, UT.

For more information about Visual, contact Lilly Software Assoc. Inc. at 603-926-9696; www.lillysoftware.com.

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