December, 1998 Management Strategies Management Strategies: If it doesn't make chips, it still can make sense Charles Allen, President Allen Precision Industries, Asheboro, N.C. There must be a way to convince job shop owners that software is a vital, realistic tool, for which they can make a real life application in what they do right now. Many shop owners still do not believe that, instead choosing to believe the old adage "If it doesn't make chips, it doesn't make sense." When we began researching software for Allen Precision Industries, it didn't take much to convince me that I needed to save time and that, for example, estimating software would help me to do so. On the other hand, when my retired dad heard that I planned to spend thousands of dollars on an estimating package, he reminded me that I already knew how to estimate: "You do that all day long, son; what's wrong with you?" Dad didn't know how right he was: it did take "all day long" to do it, and that was the problem. To most shop owners over 50, "chips" signify money, production, or a process which they know will yield a return. Even today, after 20 years of running the business, I get ribbed constantly by my dad for having too much CNC and not enough knowledge. In the opinion of many of his generation, knowledge was skill - the ability to take something in the hand - nothing - and to make something out of it. I try to explain that with the arrival of computer controls, CAD/CAM and computer programming in every area of the business and the plant, not only have we sped up and improved the processes, we've embedded a certain knowledge of the process into the computers, adding consistency, and established compatibility. And by so doing, we've spread the knowledge that he and his peers had, to everyone in the plant who understands the basic processes. What we still hear from many shops, believe it or not, even regarding CAD/CAM systems, is the old line: "That's not making me money." This is quite frustrating, when we know that by looking at the end result, software can be a better means to an end. Software improves the end process, gets products made more consistently, faster, and with repeatable, higher accuracy. For many it is hard to believe that whole segments of the manufacturing industry still resist all but a bare minimum of software automation. Members of NTMA (National Tooling & Machining Association) are an exception. Nearly all of them invest heavily in technology, including software. What makes them different? The threat they face is real and immediate. Asian tool and die shops already control 40% of the world's tooling and machining business, and have proclaimed publicly that they intend to own 80% by 2007 (Fortune, June 1997). Could job shops be next? Can we challenge shops to be proactive, without being forced to adapt? Consider the current trend toward higher speed spindles. Many companies already see these as the next level of improvements beyond CAD/CAM and CNC. Yet along with this higher speed come new challenges demanding improved methods, even in programming. To benefit from the high speed spindle's subsequent faster processing speeds, many CAD/CAM systems no longer produce consistently effective output. This creates a new demand for improved CAD/CAM processes. Our own plant has gone through iterations of this, and is again doing so, particularly regarding estimating and shop management software. We've experienced the cycle where everything was done in longhand, on paper. We've collected time cards, summarized the information, and at some point, sometimes weeks after the completed job shipped, we realized we didn't make any money. That has changed since we began bar code data collection of employee activities. Several times a minute we now have an accurate picture of where every job is and who is working on what. It is possible to know when something is not proceeding as planned. We have the confidence that we will know when we have a problem, and that at least we will have an opportunity to find and correct it quickly. In fact, we do identify problems much quicker today and we are able to do this during the process, not after the process. I look at the process in our shop, and from that perspective try to understand the "it doesn't make chips" mentality. While we successfully sell the same types of software tools that we use, too many other shops which face identical challenges as ours simply will not admit that there may be a better way. Why won't shop owners — who agree to the logic that having information quicker through better shop management — agree to try it in their own shops? Shouldn't this be strictly an education process, to let them see the reality of how much more they can do with their time, their people, and their skills? CAD/CAM, shop management and estimating software are as vital as any other tool we use to make products. Unfortunately, it is not just a simple matter of saying that software is a tool, and we have to educate people to understand that. The industry trade magazines have been publishing examples of software success stories for years. Manufacturing software is not a tool in the conventional sense. We teach business application software to students in schools. We even teach some manufacturing software in schools. But most of these are single processes: word processing, spreadsheets, CAD/CAM. The use of much of the manufacturing software that is slow to be accepted cannot be taught in one or two semesters. Accounting practices cannot be taught in a single semester either, yet it is accepted as necessary to run the business. Shop control and estimating software fall into the same category. At Allen Precision Industries, we have found we can't operate competitively and profitably without them. And we accept there will be a learning curve that demands our time and patience. That's the educational process this industry needs to face. Our shop is going through it again. We are teaching the computer-aided estimating process to another shop employee with 18 years of experience in machine shop practices. Getting him to translate that experience has been a challenge, not due to his resistance, but rather getting him to think not from a single machine perspective, but with a complete shop overview. We're using the estimating software to do this because it is like a roadmap with which you can consider every detail of every shop operation, as well as the outside services that parts might need, such as heat treatment or special coatings. Therein, I believe, lies the problem of education — at least for computer-aided estimating. Let me continue with the estimating example. Unlike when I estimated manually with my books and my formulas and my routing sheets, too many people see the estimating process only as "guesstimating," because it is really that to which they frequently resort. That is not what true computer-aided estimating does. The involved process I once did manually, software can do many times faster and consistently. And when inevitable customer changes occur, in quantity, material, or size, software again does it much quicker than I could manually. Since there is so much to teach and so little time with which to teach potential manufacturing software users, where do we go from here? It is expensive for the software vendor to support sales personnel. And it is time-consuming for manufacturers to sit and listen to three or four competing sales presentations. So, in typical American fashion, we've shortened the process and we sell the sizzle, not the steak. Some software companies have done an excellent job of making the sizzle truly represent the steak. For others, the sizzle is far better than the steak. It's no longer a matter of resisting technology. It's becoming a matter of survival. Software is a competitive tool that can improve productivity and increase profits. Now, how do we get this message effectively, from where we are today, to those shops to whom it makes no sense? Education is the answer, but vendor neutrality would never be trusted. Isn't it time for the industry to invest in its future by convincing every shop owner that if it doesn't make chips, it still makes sense. Charles Allen is president of Allen Precision Industries (Asheboro, N.C.). The Manufacturing Report © Copyright 1997, 1998 by Lionheart Publishing, Inc. All rights reserved. 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