30 September 2008: Newcastle-on-Tyne-based Advanced Cutting Tools Ltd (ACT) is realising improved efficiencies and significant savings with the installation of a SupplyPro tool vending machine from Tooling Intelligence. Founded in 2006 by tooling and distribution specialist Michael Richardson and his father, ACT has quickly established itself as much more than a competitive source for top quality cutting tools and industrial supplies.
“We focus on providing technical services, rather than simple merchandising,” explains Richardson. “Our aim is to provide real value to our customers by reducing their operating costs, while maintaining or increasing their manufacturing throughput.
“When we started the company, we recognised that vending systems would need to be an integral part of our offer. From my experience of the metal cutting sector, I knew that SupplyPro delivered the versatility and levels of control that would provide a strong foundation for success. We therefore quickly established contact with Tooling Intelligence, and shortly afterwards installed our first machine at a customer’s site.
“SupplyPro units offer many advantages over other types of dispenser. They can be configured to suit different product variants and allow users to choose the most appropriate access security levels for their needs – from trust to absolute control, if need be.”
According to Richardson, dependability is the system’s principal strength – one reason that several well-known tooling manufacturers rely on SupplyPro equipment to service many of their key accounts. Versatility is another important factor, with the control module’s intuitive touch screen operation being complemented by a wide variety of operator recognition options, including barcode and Radio Frequency Identification (RFID). Crucially, the system also enables costs to be reported to an extensive range of customer specified allocation codes, such as works order, job number, production batch number, specific operator, production cell or individual machine tool. Furthermore, all transactions are time and date recorded, enabling comparisons between shifts or operators to be easily assessed.
“Unlike most OEM supplied vending machines, which typically download information at fixed times, the web-based SupplyPro software provides an up-to-date view of all the customer’s consumables,” Richardson explains. “The difference is that rather than making regular visits to customers’ sites with stock that may or may not be required, we can access the system remotely and only take the items needed to replenish the storage unit, precisely when they’re needed. As a result, we can both minimise travelling costs and reduce the time taken on site to service each system. It’s the difference between a two or three hour ‘just in case’ visit and a half hour one to restock the system on a ‘just in time’ basis.”
The SupplyPro system also copes very effectively with sudden peaks in usage. With a less capable system, a standard report may be produced daily at say 3pm, indicating that the machine will require refilling within the next 36 hours. However, a spate of tool breakages during the subsequent night shift might actually result in a stock-out situation before the scheduled replenishment takes place.
“With the SupplyPro system, every item is specified with a ‘critical’ stock level as well as a ‘regular’ restock figure, allowing any abnormal usage to be identified and addressed,” adds Richardson. “The moment the stock falls to the critical figure, an alert is sent to my Blackberry, enabling immediate action to be taken.”
A further justification for using independent vending suppliers is the system’s ability to accommodate a wide variety of other essential or high value items – such as power or hand tools, welding consumables, maintenance spares or personal protection equipment.
“Installations can easily be configured to take account of issues such as gauge recalibration dates, preventing access to items until they have been re-authorised for use,” explains Richardson. “The fact that SupplyPro controls all of the gauging equipment for one of the world’s best known computer chip manufacturer is testament to the system’s reliability. What’s more, its versatility means that it can be used for booking out specific tools or equipment to operators, ensuring they are recorded back into stock at the end of shift or on completion of the job – with any overdue items immediately triggering an email or SMS reminder.”
Richardson maintains that the system can be applied effectively to any critical stock control application, and observes that one customer even employs his vending equipment to manage items such as stationery and machine tool maintenance parts.
“Once a vending system has been installed on site, users often report a marked change of attitude within their workforce,” he continues. “Operators soon realise that items will always be there when they require them, so they only take what they really need, rather than squirreling away items ‘just in case’, further building confidence in the system and the accuracy of its reporting.”
Richardson claims that SupplyPro holds the key to enabling him to do what he does best. Real time analysis of transactions delivers a precise picture of his customer’s operations, enabling him to quickly focus attention on both the most used tools and those representing the highest spend. It also enables usage patterns to be identified with complete traceability to job, operator, shift, works order, machine and even operation number, if required.
This is the trigger for ACT to assess alternative tool types and grades of products from across a number of tool manufacturers’ catalogues – in order to identify the most cost-effective solution for a particular task. The system also enables the results of back-to-back trials using different cutters to be assessed quickly and impartially.
“It’s about price-performance, not unit cost,” notes Richardson. “There’s simply no point in recommending an insert or drill that’s 25% cheaper if it wears out twice as quickly as the one it’s replacing. Our ability to offer end users substantial savings can be judged by the fact that within two months of installing the SupplyPro system for our second customer, we had identified several thousand pounds worth of sustainable cost reductions, simply through selective tool and insert substitution. By gaining control and real time visibility of their tool usage, we normally expect to save customers at least 15% of their overall consumable tooling spend, while safeguarding our own margins.”
“These are not the only benefits for customers,” comments Mike Swaffield, managing director of Tooling Intelligence. “The direct cost savings are just the tip of the iceberg, with other less obvious benefits – such as the ability to rationalise purchasing and stores systems, reduce paperwork and streamline payment procedures – typically accounting for at least the same again. The SupplyPro system is much more than an electronic safe, it is a true business improvement tool, whether supplied direct or through distributors and tooling manufacturers.
“Tooling Intelligence adds further value by providing comprehensive backup in terms of operator training, specifying, configuring, installing, supporting and maintaining customers’ systems. As a result, users can choose how much or how little day-to-day involvement they want in the control of their tooling and consumable spend – by either dealing direct or through distributors like ACT. Both options offer attractive cost benefits and the decision will normally hinge on the trade-off between convenience and the ability to exercise direct control on an end user’s own supplier base.”
With an entry-level system representing an investment of around £8000, Swaffield maintains that any company spending more than £50,000 per annum on tooling or other industrial consumables could expect to achieve a payback in less than 12 months. In today’s economic climate, these figures are difficult to ignore – especially as the SupplyPro system focuses attention on the areas likely to achieve the greatest savings first.
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