Hidaka Forges Automated Inventory Solution
Like most manufacturers, Hidaka USA Inc., a sheet metal fabrication company, conducts regular physical inventories of its raw materials, work in process, and finished goods. It had been using a paper-based, manual system that was time-consuming and vulnerable to mistakes, making it difficult for management to be confident they had the materials and finished goods needed to meet customer orders.
Since its founding in 1989, Hidaka USA Inc., a sheet metal fabrication company in Dublin, Ohio, has provided customers with quality prototypes, simple stampings, and complex assemblies.
AIM Computer Solutions Inc., based in Fraser, Michigan, provides business software solutions for automotive manufacturers to meet specific ERP needs.
Over the past 30 years, Hidaka has designed and manufactured steel and aluminum parts, including prototypes, simple stampings, and complex assemblies, for companies in a range of industries. In contrast to Hidaka’s high-tech production processes and equipment, however, its inventory system was largely manual.
Employees entered information onto paper inventory tags and then manually keyed it into the company’s ERP system. “If we couldn’t read someone’s handwriting, people ran through the plant trying to figure out the part number,” recalls Diane Rosso, director of administrations with the Dublin, Ohio company.
Along with these inefficiencies, “Our primary challenge was having accurate and timely inventory counts for making decisions,” Rosso says. The manual system provided too many opportunities for error.
In addition, it took several days for data to move from the inventory process into Hidaka’s ERP system, which resulted in information that was outdated before it was entered. Some inaccuracies didn’t surface until weeks after the manual inventory was completed.
When Hidaka was awarded an unusually large order from a customer, management knew it would need timely, accurate information to remain ahead of the project’s many facets. “That was our jumping-off point,” Rosso says.
A Matter of Trust
Hidaka turned to AIM Computer Systems Inc., an enterprise ERP technology solutions and business process improvement consulting provider. Hidaka had already implemented AIM’s ERP system and AIM was familiar with the inventory challenges Hidaka faced. “We had trust in them,” Rosso says.
Further boosting their trust, a newly hired AIM employee with a manufacturing background spent several days each week at Hidaka to assist with the implementation. He worked with Rosso and her colleagues to develop an implementation plan to ensure the system was running before Hidaka was scheduled to conduct its March inventory.
Hidaka implemented AIM’s Mobility Physical Inventory app. AIM Mobility is a series of manufacturing productivity apps that integrate with AIM’s ERP software. AIM Mobility apps run on Androidâ€based tablets. (The apps also work on Android phones, although the smaller screen size can make it difficult for a user to review all information.)
AIM’s mobile inventory solution also uses barcode scanners. Hidaka employees scan products’ inventory labels, eliminating the need to hand-write part numbers and quantities. And by leveraging wi-fi and Bluetooth technology, the AIM software, tablet, and scanner work together to communicate in real time. The solution’s automatic data collection capability boosts both the efficiency of the inventory process as well as the accuracy of the records.
Getting Everyone involved
Because the AIM physical inventory solution touches nearly every department, Rosso included employees from production, inventory, quality, accounting, and the plant floor and front office, among other functions, in the implementation, which lasted several months. Along with the software, Hidaka purchased laptops, tablets, and scanners.
Downloading the AIM mobile inventory app is similar to downloading any other app, explains Jeff Sawka, director of implementation services for AIM. Users typically have a slight learning curve, but most find they’re comfortable with the solution after about one hour of working with it, he adds.
Many quickly recognize the benefits, Sawka says. They can see the data was entered cleanly and quickly, eliminating the need to manually key it in.
Because the AIM system uses information gathered through barcodes, Hidaka employees now are also responsible for entering their production quantities into the AIM app. In the past, employees had to manually write on paper their production records, including the part and process numbers, quantities, and other information. “We went from being one day behind because we were entering information by hand on paper to real time,” Rosso adds.
Another benefit: managers can easily use the AIM app to find up-to-date information on the location of each part in the production process.
To conduct its first inventory using the AIM system, Hidaka borrowed eight tablets from AIM. Employees scanned serialized barcodes on the approximately 4,200 products on the production ï¬‚oor.
The AIM system is programmed to prevent typing errors and to provide real-time feedback about retired or ineligible products. The AIM inventory app also provides immediate information on product variances, so employees can double-check any that raise concerns while the inventory is underway.
AIM sells its apps as solutions. Once purchased, an app is available to employees throughout an organization. AIM also can provide consultants to assist with implementation and other projects.
With the AIM inventory app in place, Hidaka’s cost to conduct inventory dropped by about 30%. Previously, between 16 and 20 employees would work for about 320 labor hours to complete the inventory. This dropped to about 160 labor hours with AIM.
More importantly, Rosso and her team have greater confidence in the resulting data. Now, when a customer asks if Hidaka can fill an order, employees can quickly check the system to identify the materials available and determine how they can meet a customer’s request.
More accurate inventory data also helps Hidaka purchase raw materials more effectively. With its previous system, the company may have run through its supply of raw material but not immediately realized it because information was days behind.
The AIM Mobility Physical Inventory app, in combination with the AIM ERP system, automatically checks that each product’s item number, its progress through the manufacturing process, and the quantity available, all conform to the written records.
“The person scanning the item on the floor is confirming that the lot exists,” Sawka says. It soon becomes clear that items that were not scanned represent over-statements of inventory, and items that are scanned but not recognized are additions or gains to the records on the books. “You get both losses and gains, as well as a confirmation of what’s on the books,” he adds.
Because conducting inventories with the AIM solution is easier and less time-consuming than a manual process, companies often conduct them more often. Some organizations move to monthly or even weekly inventories, at least for parts of their production process.
Just as important, organizations using AIM’s inventory app can be more certain of the quantities they have on hand. “That drives the integrity of the production schedule,” Sawka says. Solid inventory numbers help companies place more accurate orders with vendors. That’s key with materials such as steel, which typically have a long lead time.
The information the AIM solution provides also improves production scheduling. Companies can better plan how they’ll use raw materials and other resources when they have an accurate idea of how much they have.
With the AIM inventory app in place, “We are more prepared to tackle any project,” Rosso says.
Casebook Study: Taking Stock
When Hidaka USA received an unusually large customer order, the management team knew its manual, paper-based physical inventory process wouldn’t provide the timely and accurate information needed to ensure the order was met.
Hidaka implemented the Mobility Physical Inventory app from AIM Computer Solutions. The app, which runs on Android-based tablets, automates the inventory process, improves visibility, and provides more accurate and timely information.
- The direct labor hours needed to conduct inventory counts dropped from 320 to 160.
- The cost to conduct physical inventories fell by 30%.
- Hidaka’s inventory process is now automated, timely, and less prone to error.
- Production scheduling and material ordering are more effective and accurate.
- Hidaka can better manage large or time-sensitive orders.
Diane Rosso, Hidaka’s director of administrations, and her team are looking at using the solution to help predict maintenance needs for die molds and to track the time required to run different machines along with the level of downtime experienced. Hidaka also continues to work with the system to better predict when to place material orders and how much to order. “We can better match how production wants to run the parts to be as efficient as possible,” Rosso says.