Magazine Article | August 23, 2007

Inventory Tracking Saves $2 Million In Productivity

Source: Field Technologies Magazine
Integrated Solutions, September 2007

ABB is a global leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. The ABB Robotics Division in Auburn Hills, MI manufactures custom automation systems and also does refurbishment work. In each of these functions, it utilizes thousands of parts. While the individual parts may have relatively low costs — most are worth less than $25 — stockouts can have serious consequences to ABB Robotics' operations. "Even a missing bolt can stop a project dead in its tracks," says Charlie Newman, the division's material control manager.

ABB used to store parts in various unsecured cribs throughout the plant. Once the crib received inventory, ABB had no visibility into what parts were available to use on a particular project or where individual items were located. With no way to know exactly what was in the facility, ABB often placed multiple orders for the same parts. In addition, materials that were left over at the end of a project would remain in a crib even if no one planned to use them in the foreseeable future. ABB recognized that its asset and inventory control model was resulting in significantly higher carrying costs and potentially putting its projects at risk.

The Robotics Division decided to make major changes to how it managed its parts inventory. It needed accurate, real-time visibility into the inventory held in the parts cribs. It also needed to be able to give its suppliers access to the inventory information so they could perform planning and replenishment activities on ABB's behalf. ABB chose SeeControl to provide the technology to meet its needs. ABB uses SeeControl VTSs (Virtual Tracking Scanners) to record inventory receipts in the cribs and usage on a particular project. The scanning process captures not only what was used but who took the inventory, when it left the crib, what project it was being used for, and what its value was. When vendors deliver replenishment stock, they scan in their inventory. They also perform periodic inventory audits and can remove inventory that is not moving and purge it from the system. This information moves instantly from the scanning devices to the SeeControl On Demand software service via cellular wireless technology. ABB now has the accurate, timely information it needs to work collaboratively with its suppliers and make intelligent inventory decisions. ABB has also gained flexibility to address change, while effectively managing costs. The system has saved ABB personnel significant amounts of time in inventory tracking, assembling materials for projects, and purchasing. The company estimates these productivity savings at more than $2 million annually.