Leveraging Benchmarking

Our annual Top Shops benchmarking survey enables you to 1) see how your business and machining metrics stack up against others, and 2) review the equipment and practices that leading shops are applying.

We’ve gotten positive feedback from a number of shop owners and managers who value these surveys. One such person is Paul Hayes, who says he used Top Shops benchmarking data to help guide positive change at Able Tool after being promoted to company president a couple of years ago. In fact, the Cincinnati, Ohio shop recently received a manufacturing award from Cincy - The Magazine for Business Professionals in honor of its successful continuous improvement efforts. The strides Able Tool has taken to improve its operation yielded a 5.2-percent increase in gross profits last year, and the company expects a 10-percent increase this year.

During a recent visit to the nearby shop, Mr. Hayes explained that both the company’s sales and its overall shopfloor performance were stagnant at the time he moved from general manager to president. Employees seemed disengaged and management was so busy with day-to-day duties that it couldn’t focus on the big picture. He knew a culture change was needed to enable the business to prosper and grow.

Mr. Hayes and his management team tapped a few sources in their initial efforts to turn things around. First, they solicited feedback from shopfloor employees about the process inefficiencies they encountered each day and what tools might increase efficiency. Second, they tapped the expertise of TechSolve, a Cincinnati-based organization that provides consulting and R&D services to the manufacturing community. Third, they reviewed Top Shops benchmarking data to learn about the shopfloor concepts, processes and equipment other shops were leveraging. Mr. Hayes says he appreciates the Top Shops program because the best-practices intelligence it offers can be particularly challenging for small shops like Able Tool to access.

In reviewing the Top Shops data, Mr. Hayes noted that the vast majority of leading shops had a formal continuous improvement program. That justified Able Tool’s decision to establish one. Similarly, a high percentage of successful shops applied 5S organization measures. Able Tool has since worked to implement 5S throughout its facility. In particular, the shop’s efforts to “standardize” (one of the five Ss) have yielded significant process improvements.

For example, the shop conducted an insert tooling study and found that it used 19 different face mills. Effective purchasing and inventory control for such a high number of similar cutters is virtually impossible. Therefore, it worked with tooling supplier Iscar to develop a standard face mill package that would be used throughout the shop. Not only did this minimize tool management headaches, but it enabled the shop to standardize certain cutting routines across multiple machines while simplifying programming.

Along those lines, benchmarking data showed that a high percentage of successful shops used tool vending systems. Able Tool has since installed a tool vending system from MSC that removes the burden of maintaining tool inventory from the shop’s employees and gives them direct access to tools they need. It also connects directly with the shop’s ERP system to automatically and accurately track each job’s tooling costs. Able Tool can now keep a smaller, more standardized tooling inventory on hand, too. Plus, its previous 25-by-50-foot tool crib has been replaced by one small aisle with the compact vending machine.

Freeing-up floor space in such a way is important because the shop often machines large workpieces and needs room to stage WIP or completed parts for inspection, assembly and so on. Interestingly enough, Mr. Hayes found that the benchmarking data validated the shop’s focus on large-scale machining using big HMCs and boring mills. Significantly fewer shops use HMCs compared with VMCs, meaning there is a smaller pool of companies that offer similar capabilities. That said, the shop still sees a steady amount of small-sized work. To become as effective running those jobs as leading shops have, it has invested in more capable equipment including four- and five-axis machines fitted with probes to enable in-process inspection and tool measurement.

Today, the shop also does a better job of measuring metrics and communicating them with shopfloor employees. Mr. Hayes says one of the most important metrics it tracks is the actual time it takes to complete a job versus the quoted time. When he began looking closely at this a couple years ago, the shop’s average rate was 78 percent. Since creating a monthly bonus plan to incentivize employees to hit their delivery time goals, the average rate has improved to 104 percent.

Able Tool has shown that benchmarking should be part of every shop’s continuous improvement efforts. We hope that our Top Shops benchmarking survey will help you in much the same way. If it has, please contact me so I can learn more.