Tooling Management Saves Aerospace Manufacturer $1.5 Million
This shop realized that it needed an inventory management system to tighten up its tool purchasing practices and MRO management.
When Moeller Manufacturing Co.’s tooling inventory eclipsed its actual day-to-day manufacturing needs, it became apparent that it was not only generating major overhead, it was also hurting productivity across the company’s network. In order to stay competitive, Moeller, headquartered in Wixom, Michigan, needed to improve its supply chain and inventory management processes.
The company called on MSC Industrial Supply Co., a distributor of metalworking and MRO supplies, to provide solutions for regaining control over consumable inventory spending and improve overall productivity. A combination of MSC’s industrial experience paired with its ControlPoint inventory management system enabled the aerospace manufacturer to save $1.5 million in reduced tooling costs.
Having grown several times over in the past eight years to employ 600 people in four factories, Moeller has established a good reputation supplying machined turbine engine components to OEMs in the aerospace and industrial turbine industry as well as producing critical machined components for commercial and military aerospace programs. The company’s parts can be found in most commercial airline fleets and many U.S. military jet fighters. GE, Boeing, Rolls Royce, Pratt & Whitney and Siemens are just a few of Moeller’s top customers. But such rapid expansion is bound to bring on some growing pains.
Historically, Moeller had virtually no formal process for tracking the whereabouts and use of tools such as inserts and end mills. Instead, machinists simply went to the tool crib and chose tools they thought might be necessary for a given task. Without an automated tracking system to record such activity, increases in business levels and number of employees created major inefficiencies. For example, Fred Pringle from Moeller’s EDM department had to count—by hand—more than 1,000 items every few days in his role as a general inventory checkpoint. This took away from the time he could spend on more critical duties.
Due to these inefficiencies, the company was often ordering more tools than it actually needed, causing perishable tooling spending to soar out of control. Moeller realized it needed the counsel of an outside company that understood the demands of the aerospace industry and could offer value beyond just a vending machine. That’s when they got in touch with MSC.
To help build the right supply infrastructure, MSC began by installing Moeller’s first vending unit in the Wixom facility’s lathe department in 2012. The system, which held just 21 tools, brought Moeller a $27,000 savings in three months. Six months later, another three vending units were added in different locations, delivering an additional $35,000 in tool savings within another three months.
But the company’s success with MSC hasn’t been strictly cost-based, as Moeller Application Engineer for Special Projects Andrew Kramer explains. “Knowing that we can now go to a vending unit—always located at the point of use for a designated activity—and get exactly what we need, versus the previous downtime we incurred to visit the tool crib and estimate what we needed, has been night and day.”
Moeller built on this success by using MSC’s ControlPoint inventory management solution, which pairs vending units with eProcurement inventory management software and onsite services. Previously, Moeller was tying up more than four percent of its sales in perishable tooling because there was just no visibility of inventory levels and purchasing cycles. A little over a year after implementing ControlPoint, that number has been reduced to one percent.
The digital usage and tracking reports generated by the ControlPoint system have enabled Moeller to get a tight grip on true cost per part as well. That knowledge also improves accuracy when quoting work, since ControlPoint tells employees exactly what tools they have used in the past to make a specific part. “We are now so much better able to zero in on our estimating efforts,” Mr. Kramer says. “Because of the depth and breadth of our various ControlPoint solution reports, we can confidently determine how many tools are needed to perform the various machining operations.”
In addition to saving hundreds of thousands of dollars in inventory-related overhead, the improvements have greatly reduced associated labor to manage the movement of tooling throughout the company’s operations. “Now, virtually all of our tooling inventory is on the shop floor, readily available to our machine operators when and where needed,” says Kenneth Riffenburg, purchasing supervisor. “We are making smart purchases because we have been able to contain and control our inventory.”
Today, Moeller has 21 MSC vending machines in its facilities. Mr. Pringle, for one, is pleased. He explains that he can simply walk up to a vending system in his EDM area, scan his badge, and receive the tool he needs. All those 1,000 items he used to count by hand are now stored, secured and barcoded to Moeller’s tooling sheets for the production of a particular part, thanks to the customized software.
With MSC’s assistance, Moeller has altered its inventory management approach and methodology for many valuable and critical cutting tools as well as larger-size items, including MRO supplies such as respirator masks and janitorial equipment. MSC’s ControlPoint inventory management solution saves Moeller time, has dramatically improved its ordering and quoting accuracy and made its bottom line significantly healthier. The company doesn’t order in bulk much anymore; they buy only what they need.
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