Connecting With Customers
When Danny Hogge installed his first computer-based shop control system several years ago, he hardly imagined he'd soon be giving customers direct access to it via the Internet. As it turned out, it wasn't such a big leap after all, just a few logical steps down the road to where PC-based information technology is taking all businesses, and the metalworking business in particular.
But this shop is moving faster than most. The business, Hogge Precision Parts Company (Hartsville, South Carolina), got its start in 1989 when Mr. Hogge left another venture to open his own shop to do high-precision screw machine work. Capacity was gradually added over time, as was a CNC department. The business has grown over 30 percent in the last two years alone. It now stands at 66 people, with some departments operating around the clock.
The initial computerization of this shop had modest, though vitally important, aspirations—to regain control of an enterprise that had outgrown its administrative capacity. But once the shop got a handle on the information, other possibilities emerged, including the ability to let customers interact directly with the shop's management system. Here's how the shop moved so far so fast.
Hogge Precision is in many ways the typical job shop. For the most part their equipment defines their customer base. As they continue to build closer customer relationships, however, it increasingly works the other way around. The core of the business is making screw machine parts on one of 12 Brown & Sharpe Ultramatics, eight New Britain six-spindle machines and two chuckers, or two Warner & Swasey lathes. A secondary department includes centerless grinders, thread rollers, hand lathes, mills, drills and deburring equipment. At the request of key customers, Hogge added CNC equipment five years ago, which now includes Mori Seiki 40-taper and 50-taper vertical machining centers and two Mori Seiki 8-inch chuck turning centers. Hogge Precision does nothing but production work on this equipment, with screw machine lot sizes ranging up to about 50,000 pieces. CNC lots are generally in the 25- to 50-piece range, and occasionally as high as 2,000 pieces.
As the shop grew, they were able to maintain their standards for high quality machining, but found it increasingly difficult just to manage the flow of jobs and material. An information bottleneck developed that Mr. Hogge freely admits was none other than himself. "Everything was coming through me," he says, "and it was about to kill me." That's not to say his health was in jeopardy, but the well-being of the shop was showing serious signs of strain. With material inventory often out of sync with the production schedule, it was not uncommon to find a long screw machine setup complete, only to wait for bar stock. Then when the stock came in, everyone was scrambling to get the order out. "I don't mind working 'til 10 o'clock at night once in a while," says Mr. Hogge, "but it seemed like we were doing it every night."
So two years ago, the company installed a PC-based job management system from JobBOSS/Exact Software (Minneapolis, Minnesota). The system provides a means to capture and integrate all the pertinent information associated with a job, and to distribute that information to the appropriate people at the appropriate times, and in the proper context. Moreover, it provides a means to automate much of the manipulation of information that previously was done manually, and to provide access to information via reports that simply wasn't at all practical to extract through manual means.
With this approach, the shop control system became the "expert" with which employees could interact to find routine job information, rather than Mr. Hogge. Or as he puts it, the system provided a means to "spread the knowledge around," and with it, the administrative task as well.
Standardizing The Documentation Process
Following a job helps explain how it all works. When a part is set up initially, Mr. Hogge must establish the basic job information—process routing, setup times, cycle times, shop rate, labor and so on—that is captured in the form of a system template. Thereafter, it's a clerical job to enter subsequent reorders of the part. All the office personnel have to do is pull up the part number, enter a quantity and due date, and the new job is posted on the system. If there are multiple releases, each delivery gets is own job number, which Mr. Hogge feels is the most flexible method, particularly as order quantities and ship dates shift with customer needs.
Typically, Mr. Hogge takes a quick look at the job, sometimes to "tweak in the material," he says, which mostly means making a judgment of how much to run at a time for anticipated repeat orders. He can "pick" material (meaning, allocate stock already in inventory to the job) or "buy," in which case it will be added to a general shop material procurement report.
This information helps Mr. Hogge make better decisions. Consider, for example, an annual contract for a part with 12 releases. The part requires a primary process on a screw machine and then some secondary operations. The primary requires a long setup; the secondary operations don't. So they probably want to run several months' worth of the first operation, but perhaps not finish all the parts at once. How many should they run? A realistic picture of available material on hand, or how much will be required, has a major bearing on that decision. So does unscheduled machine time. And he can check either in seconds. Moreover, changes can be executed quickly. Change the quantity of a job, or the due date, and the pick or buy requirements are updated automatically.
Once Mr. Hogge is satisfied, the job is released, which updates all files in the system. Rather than Mr. Hogge having to do all the material management himself, the procurement is handled by his son, Dan Jr., who generates a material requirements report, and buys only what is needed.
Once the material is available, they print out the traveler, which is attached to the part print, and all goes to setup. When the job is complete, packing slip and invoice are generated automatically and expertly. "If it's wrong, it's because I, an experienced person, made the mistake, not a shipping clerk," says Danny Sr.
But the information doesn't just help with job planning and documentation. It also helps with the shop's execution. Every PC in the company is networked, and six shopfloor computers give department managers full access to all manufacturing information. For one thing, it allows all production people to post their own time to each job number—directly entering workcenter, setup time, runtime, good/bad part counts and so on—which provides a much more accurate and timely picture of what's really happening on the shop floor. But perhaps more important, department managers and workers can determine for themselves what jobs to run next, what the due date is, whether the material is on hand, and what the specific job requirements may be.
Plugging In Customers
Clearly, having such information at your fingertips is an advantage to internal operations. But it's also an extremely valuable tool for providing better customer service. When a customer calls to ask about a job status, a projected delivery date, or a quantity on hand, it's a simple matter to query the system for an immediate and credible answer. No more callbacks after running out to the shop to find out what's really going on.
If the objective here is to get customers the information they need, the Hogges reasoned, why not plug them directly into the source? If customers had access, they could look up a job as easily as a shop employee. So that's what Hogge Precision decided to do.
Actually, the notion started with a customer who had voiced a desire for electronic data interchange (EDI)—the ability to request quotes, make orders and check delivery in a paperless environment. Hogge Precision began simply, doing such things as e-mailing quotes to customers. Then the use of e-mail rapidly expanded, for both internal and external communications. "We have customers," says Mr. Hogge, "that after we get (an annual contract), we never see them face to face for the rest of the year." Moreover, Mr. Hogge soon came to realize that once the shop's employees were plugged in to good information, there was no reason why customers shouldn't correspond directly with department managers rather than having all communications flow through him. So the shop encouraged customers to do so, often getting quicker answers, and giving the shop's managers a better feel for customer requirements in the bargain.
Dan Jr. also became adept at pulling data out of the shop control system and flowing it into Microsoft Access to create customized reports, sometimes for internal use and sometimes to serve customer information requests. Then, recognizing that the shop control system database was relatively open and easy to access, Dan wrote a program that would allow the data to be accessed remotely via a modem link. Using a standard Windows-based application called pcANYWHERE (from Symantec), a customer could dial into Hogge's system and, after entering a password, could access all information pertaining to that company's active jobs.
But there were three major limitations to the approach: They couldn't print out what they'd found. Only one person could be in the system at a time. And it required a long distance call. It would be much better, Dan knew, if the access could be provided via the Internet, which would alleviate all these shortcomings.
And so Dan approached JobBOSS/Exact to see how they could build a Web-compatible interface to the system. The vendor sent a software engineer to the shop, and they jointly figured out how to get Dan's Access program interacting with Web browsers. (JobBOSS/Exact has since introduced a standard module for this purpose called SupplyBOSS.) Shortly thereafter they had it—as long as the customers have access to the Web, and passwords, they could access their account information with a standard Microsoft or Netscape browser.
So far, only one customer is up on the system. But it is Hogge Precision's largest account, with a great deal of activity, and that customer is in the system almost daily. "They check open orders, job status, outside work (mainly jobs sent out to platers) and past due jobs," says Danny Sr.
With all the advantages of direct access, Mr. Hogge believes more are sure to follow. "With our capabilities, a lot of the time we have a better handle on customers' part usage history than they do. And they know it." That allows the shop to anticipate customers' real needs, and to provide much greater service to them. In one case, Hogge Precision has an annual contract to keep a customer constantly at the 3-week inventory level on screw machine parts. Once a week the customer faxes over an inventory report. Mr. Hogge compares the customer inventory to the annual usage pattern, and then makes the determination on his own of how many parts to ship. "The customer's inventory is reduced, and they never run out of anything," he says. "What we are doing for this customer is keeping their inventory down with virtually no effort on their part."
That's value that goes way beyond price and delivery. And it's service that makes a small shop seem very large to its customers. Hogge has done it all with a relatively modest investment in information technology, but with a big insight into the future of customer-supplier relationships.