There are some things we all wish we could have 24 hours a day. Like a nice meal, or a quality TV program in the middle of the night. Much like the rest of the manufacturing world, Crown Equipment, the makers of the No. 1-brand electric lift trucks in the United States, is no exception. Employees at this company require access to plant inventory 24 hours a day, 7 days a week. But unlike their peers, Crown took the necessary steps to ensure these employees could access what they needed, no matter what time it was.
Crown is a corporation which has received more than 50 product design awards, been nationally recognized for their DP (Demonstrated Performance) QuickStart training program, and honored by the Environmental Protection Agency for their waste minimization efforts. This is a company with innovation and efficiency at the heart of its design and manufacturing philosophies.
There must be a better way
It became apparent to Crown that there must be a better way to manage indirect materials than what was currently in place.
"We really needed to get product to the operators on the machines,” said Brenda Hughes, supervisor and buyer for Crown Equipment. “We felt our replenishment was effective, but unavailability for all three shifts was hurting production."
Crown, being a forward-thinking organization, began to look at RFID (radio frequency identification) to help with its indirect material challenges. Being a manufacturer of lift trucks, RFID had certainly been on Crown's radar screen. The benefits to material handling and logistics operations have become more and more obvious. But with the growing industry buzz around RFID, Crown began to investigate the possibility of expanding its use to manage indirect materials and solving the challenge of providing 24-hour access.
Conceptually, Crown believed that with RFID its employees could simply walk in a tool crib, pick up their supplies, and get back to work. Was this possible? Their research uncovered the CribMaster Accu-Port, which is a commercial off-the-shelf (COTS) inventory management system geared specifically for managing indirect materials. CribMaster, from WinWare, has partnered with Symbol Technologies to provide the antennae and readers to power the Accu-Port and have designed a plug-and-play portal specifically for managing indirect materials.
The CribMaster system utilizes passive RFID technology and Gen2 passive tags. This system offered Crown many benefits:
Tag ... You’re it
Even with all these advantages, the common issue of tagging small, expendable items with RFID was still on the table. It is hard to imagine attaching a tag to a screwdriver or drill bit, but with WinWare's help, Crown discovered another way: tag the packaging , not the product.
Crown implemented a system where items are placed in bags with the corresponding label and RFID tag. A great advantage here is that once a worker takes an item and walks out of the crib, he or she simply removes it from the bag, places the bag in a “mailbox,” and that packaging can be used again and again. This not only minimizes the cost of tags, but also limits the effort of restocking.
Crown's employees could now find items and even move the entire crib with ease. All items have been tagged and stocked according to a coordinate system. Then, if for any reason the crib needs to be moved, the walls can be taken apart, shrink-wrapped, and moved with all products still attached. The dismantling and reassembly can be completed in one day. It doesn't get much easier than that.
With tagging taken care of and the mailbox system in place, restocking became easier than ever. At Crown, each crib monitors the movement of 200 to 300 items each day. In Crib 1, every one of these products is an expendable item, and therefore must be replaced. This process reduces restocking time and allows Crown employees to focus on other aspects of its indirect supply chain. With RFID, the employee can simply refill the bags and take as many as 30 items back into the crib at a time. Here, all 30 are recorded and assigned to the tag instantly.
ROI – The determining factor of success
In the end, having the CribMaster Accu-Port in just one operation area is benefiting Crown. Return on investment studies have proved a substantial impact, and this savings has allowed Crown to justify the system with reduced inventory usage alone. Using reportable purchasing information, Crown has acknowledged that since implementing the Accu-Port crib, its daily average inventory usage has been reduced by 21.65 percent. This has proved an ROI of less than four months.
Other soft cost reductions
The other reductions, not taken into consideration by Crown, are also substantial and can dramatically shorten the ROI even more. The other cost considerations are:
Continuous improvement initiatives
Some continuous improvement plans for Crown include expanding its RFID network. Brenda Hughes foresees nine to 10 Accu-Ports across her facilities by 2010. This consolidation will give her the ability to utilize bulk-buying incentives, while the mobility and easy "go-live" of the cribs will make this transition period run smoothly.
RFID ended up being a no-brainer for Crown. This company saved on tags and reduced restock time with the innovative identification scheme that tags the packages. Its employees could maximize the system's potential with ease. But more importantly, they could finally reach the tools they needed around the clock.
Crown has shown that RFID tagging and the CribMaster Accu-Port are the necessary means for solidifying its indirect material inventory management. Imagine the company’s savings once all of its five plants are up and running with RFID.
About the author:
Robert Holmes is the marketing director for WinWare Inc. To learn more about this company’s products, phone 888-419-1399, fax 770-419-1968 or visit www.cribmaster.com.