H&R Faces Foreign Competition Head-on |
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By maintaining a product quality level foreign competition finds hard to achieve, small American shops are proving they can win new markets for their goods. H&R Mfg. and Supply, Inc., a workholding tool producer located deep in the piney woods of East Texas, lives this philosophy every day. In fact, it is the uncompromising faith in their skills and lean business model that has given H&R the edge they need to face foreign competition head-on.
Side by side with H&R for over 15 years, Global Shop Solutions' One-System ERP (Enterprise Resource Planning) software is the system they rely on for the cost-cutting efficiencies that feed margins. H&R's initial foray into ERP began as a growing need for shop control. Today, H&R incorporates Global Shop as the foundation of their ERP approach in building their workholding jaws, chucks, right angle drives, steady rests, V-blocs, adapters and thrust bearings.
"My dad, Harvey Hivnor, started the business in 1980," recalls Derek Hivnor, H&R Vice President and General Manager. "It's a family-run company, and I've grown up here and have been in the business all my life. Early on, we were using an accounting system to run the shop, and then in the 1990's, with about 170 machines out on the floor, we started to realize we needed a strong ERP software system. That's when we talked to Global Shop, bought and implemented the system."
The formula of high quality plus price value is where H&R has staked their claim on the workholding tool marketplace. Hivnor states that efficiency through costing and productivity is responsible for H&R remaining a powerful competitor in their industry.
According to Hivnor, "Global Shop is one system that does everything. We mainly got it as a shop floor control system, and we have implemented more and more functionality as time has passed and Global Shop has increased their capabilities. From payroll to accounting to shop floor control, it focuses everything for us in such a way that we no longer need multiple systems to keep track of the numbers." Tracking is particularly challenging when employees' second language is English. Global Shop provides H&R operators with the option of logging into jobs using a Spanish-language screen. The whole function of routing and data collection is facilitated through user-friendly Graphical User Interface (GUI) terminals placed throughout the H&R shop floor.
"We have installed the Global Shop GUI system," observes Hivnor, "and that has been absolutely phenomenal for us. In the past, our employees were not held accountable for everything they were doing. Now, with Global Shop's GUI, we are pro-actively managing problems. All employees are held accountable for what they are doing, how they are doing it, and it gives the managers a better way to manage the business itself."
"Also, the GUI system has helped a lot in terms of the English-to-Spanish conversion. Many of my employees are not fluid in English, and the Global Shop GUI system displays in Spanish and helps them clocking in and out. For the front office people, the GUI has helped in the transition to a more sophisticated ERP software program. Our average seniority here is about 15 years, so we have a few 'old timers' who didn't grow up in the computer age of machine shops. With the GUI, they also find the system easier and easier to use."
Today, manufacturers must track complete information folios associated with their product production. The stakes are too high to leave cost accounting to chance, and with Global Shop software, H&R has found the means to stay competitive against foreign manufacturers offering lesser quality products at lower price points. Again, managing shop floor efficiency through empirical data is where H&R finds the key differentiating aspect of their production.
"Now, we are getting good information and our costing is more in tune with the reality of our production time," said Hivnor. We just had a price decrease, and the only way we could achieve that was by having the Global Shop system in place and managing every detail and getting more costs out of the product."
When looking for the competitive edge that will achieve profit through cost reduction, lean methodology mandates you look at every aspect of your business for waste reduction measures. One key indirect cost often identified through lean examinations involves the processing of tooling orders, and the down/transit times for operator acquisition of tools. When operators take valuable time searching a shop floor for tools, or waiting for the tool-crib to find and distribute tools to them, relative production costs needlessly rise. This was the case with H&R, and it was the driving force behind Global Shop's creation of a wireless self-service tool crib for their shop.
When the operator goes to the vending machine for a tool, he can find all of the technical data of the tool by scanning one of the bar code receivers on the bar code. If that is the desired tool, the operator then can choose the 2nd bar code receiver and put in his badge number, the job number, the sequence on the router and the part he wants. From then on, the system takes over. It should be noted that the system allows for double duty on the big screen by showing weekly performances of jobs processed throughout the shop.
As Hivnor said, "Because Global Shop is so completely integrated, we are able to do many things we could not do before using separate software applications. For example, we have gone to a wireless service in our tool crib. I can safely say that the Global Shop Wireless system has taken my costs down by about a third of what they were before we integrated. Now, I have someone in charge of the tooling area in my business."
Hivnor points out that H&R costing has improved so much so that they have a much clearer, accurate and real-time picture of what can be done to keep their quality without sacrificing their margins. Specifically, with Global Shop the company has been able to get a tighter grasp on overhead rates in order to provide accurate quotes and assess actual-versus-estimate outcomes. "With the time-clocking capability of our Global Shop system, as well as the wireless connections in the tool room and tool vending machines, we are now charging those disposal goods to the jobs themselves. So, we have now what is really a true cost, rather than a more arbitrary standard overhead cost," Hivnor said.
"Quality is absolutely important to us in the way we do business, and using the Global Shop Router System, we have first piece inspection all the way through the router documentation. Because of this, we can make sure that the quality is there, and every piece in every lot meets the test of being the highest caliber. It is something we strive for as a United States' manufacturer, and the quality must always be there and at a value pricing. As far as helping us track quality, Global Shop keeps everything in line in the router, including material data collection, all within one neat system."
"I use Supply and Demand the most,I can see it all there, and so the Supply and Demand screen helps minimize the number of places I have to go to get information," said Hivnor. "I do a lot of the payroll and sales management functions there as well. I also look at the sales data and job costing, and this is where Global Shop helps me the most, in keeping track of the information for a sort of combined analysis approach."
As Hivnor said, "We installed the Advanced Planning and Scheduling system and it has been a great help to us. Also, Global Shop is an important tool for keeping track of the orders, and the various reports we use, they all help tell you where you are and where you need to be. In fact, we use Crystal Reports everyday. I might add that for tracking and shipping information, we are linked up with UPS to send confirmation on each one, so that means less paperwork for us. We also barcode and scan everything. This helps limit the many human errors that we once had."
For more information contact:
H&R Mfg. & Supply, Inc.
12400 Rose Rd.
Willis, TX 77378
800-749-0629
936-856-5529
Global Shop Solutions, Inc.
975 Evergreen Circle
The Woodlands, TX 77380
800-364-5958
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Global Shop provides H&R operators with the option of logging into jobs using a Spanish-language screen. The function of routing and data collection is facilitated with user-friendly Graphical User Interface (GUI) terminals placed throughout the H&R shop floor.
Derek Hivnor, H&R VP and General Manager, with H&R's Global Shop wireless self-service tool crib.
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