CNC Machine Shop Sees a 65% Reduction in Inbound Freight Costs with ERP Software

Nowak Machined Products (NMP) is a CNC machine shop that specializes in vertical and horizontal milling and CNC turning services. This family-owned business serves a variety of industries, including agriculture, automotive, recreational vehicles (motorcycles, ATVs and other utility vehicles), and raw materials handling.

Prior to implementing Global Shop Solutions ERP software, NMP used an outdated ERP software product to manage production. Unfortunately, the system was rife with shortcuts and errors that the data couldn’t be trusted. Based in part on sterling recommendations from several local companies, NMP chose Global Shop Solutions as its new ERP software.

Superb Traceability of Materials and Parts

One of the first areas NMP tackled with the new software was improving raw materials and parts tracking during the production process.

When receiving materials, Global Shop Solutions ERP software automatically assigns a lot number to every part. When machine operators machine a part, they issue the lot number to the work order, which shows when a box of parts has been machined. Once an operator finishes a box of parts, quality personnel perform the inspection and move the lot number from work in progress to finished goods. That way, managers can track when the box of parts went from machined parts to finished goods parts.

65% Reduction in Inbound Freight Charges

Many of NMP’s customers insist on full traceability of parts and materials that go into their products. But NMP’s management is so impressed with Global Shop Solutions ERP software’s ability to track parts and materials that they use the same process even with customers that don’t require a high level of traceability.

We track all materials and parts for every job because the information helps us in many ways. It’s such a good system and so easy to navigate that we use it throughout the shop. I especially like the ability to check inventory levels using mobile devices. I can log on to the system using my iPad and instantly access inventory levels from anywhere in the shop.

Kyle Baker, Global Shop Solutions Administrator at NMP

The superb tracking of material data also enables Baker to purchase to inventory rather than to the job. Received raw materials are assigned directly to lots in inventory and then assigned to jobs as needed. Purchased tooling is assigned directly to a bin and issued by whoever is changing the tool or running the raw part. Managing inventory in the system has virtually eliminated stockouts, which has reduced the cost of premium inbound shipping charges by 65%.

Improving Production Efficiency and Quality

Having employees log their time and report job performance data through the Shop Floor Data Collection stations screens has allowed NMP to become a more data-driven company. Managers can review a variety of standard and custom reports to monitor production, while quality personnel can easily track scrap, rework and other quality issues. As a result, managers in all areas of the business can make decisions based on hard evidence rather than guesswork.

On the quality side any time operators identify a suspect part, they immediately enter it into the system, which automatically creates a quality record. The supervisor then gives it a scrap code to identify what’s wrong with the part. Managers can then review the quality record and decide whether to rework, remake or totally scrap the part.

The ability to customize Global Shop Solutions has also helped to track and lower preventive maintenance costs.

“Previously, all maintenance was tracked by hand, on paper,” says Baker. “Now we create a work order in the system, issue all repair parts to the machine, and have employees log their time onto the work order. This provides a more accurate picture of how much we’re putting into each machine every year. This, in turn, allows us to identify machines that are costing too much to maintain and make better decisions about when to replace them.”

Managing at the Micro and Macro Levels

According to Baker, Global Shop Solutions ERP software provides a rich mix of micro and macro data that makes it easy to manage shop floor details as well as big-picture issues at the senior management level.

On the micro level, Jillian Nowak, a second-generation family member who works in the sales department, uses the software to manage her sales activity on a day-to-day basis.

“I use it for detailed sales analysis of individual customers and their sales history,” she says. “From one screen, I can get a quick snapshot of our business with each customer. I can run sales reports and review sales history or shipping reports to see the value of a specific customer.”

“I also use the CRM (customer relationship management) module,” continues Nowak, “which allows me to simplify the process of tracking my appointments, scheduling reminders for call-backs, and other sales activities. I can also add notes about customers to capture important details for our next conversation.”

At the macro level, senior executives use Global Shop Solutions ERP software Dashboards to analyze high-level production and sales data. In particular, they look for trends in products and product lines as well as increasing or decreasing sales by customer. Senior executives can now spend more time analyzing data and making decisions because they’re not wasting time hunting for the information.

To learn more about how Nowak Machined Parts uses ERP software to benefit their business, download their full case study.