Factory Management Solves Catch-22

In his book Catch 22, Joseph Heller wrote that you could get out of the army if you were crazy. But if you knew that you were crazy, than you couldn't really be crazy. Therefore, you couldn't really get out of the army. Ironically, this is a theory that applies not only to military life, but business as well. Just ask Jeff Berke, GM at CJS Industries (Topeka, KS).

CJS is a contract manufacturer, also known as a job shop that does 100% custom manufacturing. It manufactures metal parts, based on the customers' specifications. For example, CJS will take a piece of sheet metal, cut it to whatever size the customer requires, bend it in any way the customer instructs, and sometimes paint it to customers' desired color. Most of these parts are components that typically go into the manufacturing of another item. Berke says, "It's next to impossible to guess what the next guy's going to order." Despite sporadic customer orders, the company grew 70% - going from as Berke puts it, "a small- to a mid-sized company within a few years." He attributes the growth to the way CJS handled customers. "For being a contract manufacturer, we were able to react quickly to our customers. When they needed something, we were on it immediately," Berke explains.

But there was a catch. Sure, reacting quickly to customers improved customer satisfaction and increased the CJS customer base. Overall it caused a surge in business. But, as business grew, it became too much for CJS to handle. The company was using manual methods for everything and could no longer react quickly to its customers. Berke explains, "We set up a manual system in accounting and we set up another one to get the order to the shop." Sometimes, if a customer called and changed the due date or quantity of an order, it would get changed in one place but not the other. CJS employees would have to track down paperwork in five or six places to effect that change.

A Few Modules To Get Started With
The manual method caused delayed shipments, errors, and customer dissatisfaction. Therefore, CJS needed to automate its processes - quick. The company contacted TIW Corp. (Easton, PA). TIW introduced CJS to its Workshop factory management system, designed specifically for midsized, order-driven manufacturers. CJS installed the WS, Order, Bill of Material, and Plan modules to get started.

WS is the module responsible for the system manager functions, including creating and setting defaults for new companies, establishing links to accounting programs, allowing form and report modifications, and building part number files. The Order module creates orders for initiating jobs, providing instructions for building parts, tracking the process, and reporting on the details. The Bill of Material module performs four functions: bills of material processing, finished goods configuration, material planning, and item costing. Lastly, the Plan module looks at sales orders, purchase orders, inventory levels, and work orders to determine supply and demand.

When those components were up and running, CJS purchased two more modules from TIW: Route and Sales-Order-Configuration. The Route module creates instructions for manufacturing an item (which the scheduler then uses to develop a production plan), defines which route is preferred by an item being manufactured (so that costed bills can be calculated and new orders can be assigned a route), and determines which materials are required for each step in a route.

Ship Products In One Day
According to Berke, the major benefit is the way CJS can now handle inventory and e-procurement. CJS is using the TIW modules to track capacity, plan for inventory, and move away from "just in case" inventory. The company now orders raw materials only after it receives a purchase order. "We don't have the space nor do we want to tie the money up in inventory, because it's next to impossible to guess what the next guy's going to order," explains Berke. "Plus, our customers' purchase orders have varying due dates. Some want their order in a couple days. Some want it in a couple weeks." And now that procurement has been automated, Berke says CJS can get materials and usually ship within a day or two.

But that wasn't always the case. He said there were times when CJS promised a customer a specific due date, but then did not deliver, due to in-house procurement. "For example," he explains. "If somebody orders a part, it's pretty easy to remember that it takes 12-gauge (a type of steel) to make that part. But what often slipped through the cracks was that the part also required several different kinds of fasteners to assemble it. In the past, employees assumed that there were piles of those fasteners lying around somewhere. But most times, there weren't, and most times, the customer's order was on hold until we received those fasteners. Now through the TIW system, we get reminders of the little things that we need to buy." Additionally, TIW has helped CJS automate outside production. "We farm out a lot of machine work and painting. With TIW we can track which outside production company has the part and when the part has to come back to us for invoicing."

To avoid those growth-prohibiting, catch-22 situations in the future, Berke says CJS wants to offer existing customers purchasing capabilities on its Web site.

"We'd be crazy not to," he says. CJS also wants to start collecting data from the shop floor, using bar code technology with current job sheets... and is hoping TIW can help them with this, too.