When Rick Mostert, owner of FC WoodWorks in Winnipeg, Manitoba, Canada, was looking for a software program to run his business in 1998, he discovered Trakware. "It was a program that was way beyond my capabilities and means, but I had the forethought to grow into it," says Mostert. "I didn't want a program that I grew into, only to find out that I've grown out of it."
The initial cost of the program equaled the salaries of at least two employees, and at the time, Mostert's sales were at only about $300,000 annually, so it was not something Mostert approached lightly. However, the program ultimately increased his earnings to a point that allowed for significant growth.
"It helped me grow faster than I would have expected, but with a lot more control, and it's helping me continue that way."
Although FC started in a garage as a one-man operation in 1989 doing residential work, it now does custom commercial architectural millwork using a variety of materials. Today, the shop has 19 employees and recently expanded to 11,000 square feet. Besides completely reconfiguring the shop setup for better flow, Mostert also purchased a tarp building to hold raw materials to keep from taking up valuable shop floor space.
For Mostert, knowing and controlling your costs translates to lean manufacturing. (Lean manufacturing is a process that works to improve flow, cut inventory, optimize material use, space and labor to increase productivity, flexibility and profits.)
"We know where our costs are, where our efficiencies are and where we need to improve, because Trakware tells us that," says Mostert. "Where do we excel in the type of work we do?"
The base information that Trakware starts with is from the estimate of a job. There is an estimating module with the software, though Mostert didn't start with it. Instead, Mostert uses a spreadsheet where he inputs the estimate data.
The software starts with the product that the shop is going to build, taking it from a concept to a deliverable product. What goes into a product usually includes raw materials of various kinds, engineered parts and finished goods. Then there's the labor and overhead, all of which affect the profitability of every project.
Data that the software needs to process jobs is entered in the computer, from employee pay rates to material prices and overhead. "Trakware knows how much this part is costing," says Mostert. "That cost will transfer all the way through." As a result, Mostert has a good idea of how much profit he'll make on each job.
How it works
One of the nicest parts of the software, says Mostert, is that it tracks inventory, letting you know when to order material, when you last purchased material and at what price range.
"It gives you a benchmark to order materials at if it's not a commodity item. You know when you're getting a deal and when you're not getting a deal. From that vantage point it's a money maker," says Mostert.
Materials are tracked through purchase orders tagged with a purchase order number and job number. Mostert also has the system set up to take a percentage of the job and allocate it to supplies, such as hardware and screws. "You could do it by factoring every screw, but it becomes cost-prohibitive," he says.
The job itself is broken down into work order stages. Work orders or stages include purchasing, shop drawings, cutting, edging, machining, assembly, wrap and load, delivery and installation. Errors and rework, claims and changes by the customer are also factored into the report. Jobs or work that is outsourced, like installation, are treated as buy-outs, because they're work that's outsourced.
"You outsource in a way that enhances your company depending on the work load and the type of work you're doing. The type of work you're doing does evolve and change," says Mostert.
Everything in the shop works off a touch screen, set up near the foreman's office, where employees clock into work orders. Each type of work order has a number associated with it shop drawings, for example, is 01. Each project and employee has a number. Trakware calculates the time an employee spends on a work order, along with his pay rate, and can tell the owner whether the shop is doing the job cost effectively.
Once the job is complete, the program generates a packing slip and an invoice. Then all the information is tied into accounts payable, accounts receivable and general ledger.
"It tells me exactly what my material costs are, exactly what my labor costs are and exactly what the overhead associated with those costs are, and it breaks out the buy-out items," says Mostert. "You know exactly what your profit was with that job. You get a project income statement and a monthly income statement."
How the shop works
Drawings are done using Microvellum software, which also does the optimization. It is used in conjunction with the new Altendorf F45 computerized sliding table saw. It is also capable of working with any CNC machines that Mostert is considering for the future.
Raw material is brought into the shop from a holding building as it is needed to keep from tieing up floor space. Most parts are cut at the computerized sliding table saw, although some pieces are cut at a Powermatic table saw with an extended table.
A cut list is sent to the Altendorf that shows the optimal cutting pattern to maximize yield. There are two options to consider when cutting, best yield of material or less labor. The operator can use the pattern or decide on a different pattern. "What choice you make depends on the material costs and the labor costs," says Mostert. "You weigh the two against each and look at the waste factor."
FC uses a lot of its off-cuts in wall or floor cleats, protective shipping materials, cabinet kicks, wall nailers and for cribbing and studding in custom pieces. "By the end of the day, the waste is minimal," says Mostert, while larger pieces of useable waste can be donated to an adopt-a-shop program at a local school.
Parts are edgebanded at a Brandt edgebander and bored, drilled and doweled at the Masterwood CNC machine. Although parts usually go to the boring machine first, sometimes they are edgebanded first if the project requires it. Everything is constructed using dowels, including the drawers.
Parts are assembled with glue and dowels using a hand-held pneumatic glue inserter and the parts are then put into the Ritter case clamp. There are also two areas in the shop devoted to custom work like reception desks. There are two sizes of Quality vacuum bags to glue up laminates when needed for custom-curved jobs. Mostert chose the vacuum bag approach for glue-ups because it offered more versatility.
The next step
Mostert has just begun using the estimating module of Trakware, so that he will no longer have to enter jobs on a separate spreadsheet. Estimating has just been handed over to the shop's former project manager. "We have to actually develop and tailor it specifically to what we want, but Trakware has given us the tools to do it," he says. Now you're creating the product, or deliverables, as you're estimating.
"The nice thing about this system is we can backtrack and compare what we estimated with what it actually costs," says Mostert. "We can also determine, if things get tight or the economy suffers, what our bottom line is to bring in work and not lose money."
Mostert wants to continue growing and expanding the business, but he wants to maintain the same level of profitability.
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