Implement Pallet Changers With a Customer-Centric Approach

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In the mid 1980’s, my company purchased its first CNC machining center. This was a big step for our organization for many reasons, one of which being our lack of production capability because we ran a manual shop. We did have some manual production equipment, such as turret lathes that allowed for higher turned volumes, but nothing for milling machines. Being a manual milling shop, we were limited to the volumes of parts we could produce quickly and on time to meet the customers’ needs.

When we did receive our first CNC mill, my thoughts went towards being able to be more competitive and capable in the machining market. It felt like we had purchased the main ingredient to becoming a globally capable machine shop. I was wrong! 

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As I watched production on the machining center, I became aware of an enormous problem that prevents CNC machining centers from realizing their greater potential: the continuous manual loading of the CNC machine tool while it sat idle, which severely slowed down productivity. This CNC machine tool investment seemed to have not had the major impact that I thought. Manual loading was slowing everything down. It felt like a fire drill was being performed with each loading cycle. Operators simply rushed to load the machine to keep up production, and one could quickly see this pathway was unacceptable. We had to find a different way of doing things.

At this point, we looked and found pallet systems to be the important key to moving on to the next level of manufacturing. The implementation of pallet systems was a game changer, but we did it from an operations perspective, which I believe was wrong.

Today, I believe we need to make these decisions from a customer’s perspective. The keys to a good customer relationship are:

1. Quality
2. Delivery
3. Service
4. Price

If these are met, then we are working to meet the customers’ needs first, and not that of operations. Let’s look at pallet systems from this perspective:

• Quality. If you have worked in a machine shop for any length of time, you realize that most of the errors come when we set up a CNC machining center. Qualifying a setup from scratch every time we want to run a repeat part is time consuming, and because each setup is new, there is always a good chance something will be overlooked and can cause quality problems. Pallet systems reduce setups because the setups are already in place, and therefore reduce the chances of quality problems. Also, without a pallet system, an operator is constantly loading under pressure to keep up production. All sorts of loading errors can happen when there is pressure. Pallet systems reduce this stress and allow the operator to calmly load parts and ensure the loading is right. Without the time stress, operators can calmly measure parts and ensure they are to specification. Pallet systems, therefore, increase quality, and customers can come to depend on the vendor for consistent parts.
• Delivery. Customers are always looking for fast deliveries. Pallet systems increase productivity by decreasing the waste of manual part change times. With pallet systems, many part-to-part changes are less than 30 seconds, and this really allows for greater throughput. Pallet systems also enable overnight production. They are key to keeping customers happy with consistent, on-time deliveries.
• Service. Customers are always making changes in requirements and needs. Pallet systems allow vendors to quickly transition to those changes. Holes are moved or features are changed. Pallet systems make sure we make only the right amount of parts needed for a current delivery, and they autmotically move on to the next part needed to meet current deliveries. Without pallet systems, there can be a tendency for operations to try and amortize a setup over longer runs in order to minimize setup cost. This inventory is usually made because the customer has placed an order with extended deliveries. Customers are always irritated to find this inventory when part specifications change. Yes, the customer committed to making these parts, but things change, and being able to pivot with these changes without the customer having to pay for this inventory is key to customer loyalty. Pallets increase the confidence that changes can be made easily and, therefore, the vendor is of service and the customer is not saddled with extra expenses due to change.
• Price. This is the last element. Pallet systems make sure that the vendor is price-competitive, and therefore the customer is confident about being competitive in the marketplace. The values of the first three items of quality, delivery and service in many cases overshadow price, since if the first three are not present then the price of a CNC milled component is much higher than just the transactional price on the invoice. It amazes me how many companies buy on the transactional invoice price when the actual price is much higher due to problems with quality, delivery and service. Pallets can help make the total price lower.

Pallet systems have always been viewed from the operations perspective. Companies make numerous calculations to justify them. The key to why you should buy a pallet system should be seen from the customer’s perspective, since in the end the customer is the one paying the bill. The loyalty and longevity of a customer relationship is, in my opinion, the greatest key to purchasing a pallet system.