Sep 07, 2006

Improving the Inventory Process

With one of the widest product portfolios in the water metering industry, AMCO Water Metering Systems’ manual inventory management processes were slowing down its warehouse and distribution operations, even as the company continued to grow. Workers used paper forms to record product moves and take annual physical inventories, then later entered the data on stationary computer terminals.

But the company found a technology solution to help its distribution operations keep pace with the company’s growth. AMCO has cut the time it takes to complete its physical inventory process in half and significantly improved inventory accuracy and warehouse efficiency using a wireless data collection solution that communicates in real time with its MAPICS enterprise resource planning system.

Revamped processes

The company, based in Ocala, Fla., manufactures and distributes high-accuracy metering products to the North American utility, submetering and industrial markets. The company recently revamped its procurement processes, switching from offshore to domestic parts suppliers for some components to provide more flexibility in its supply chain.

Workers at its 100,000-sq-ft manufacturing and distribution facility in Ocala, however, were bogged down with a paper-based, manual inventory management process. All inventory moves were written down and key entered into MAPICS on stationary desktop PCs, a time-consuming process that made it difficult to manage the company’s inventory of parts and finished products. Annual physical inventories took two days to complete with a large staff. Cycle counting was nearly impossible because of the manual data entry process.

“In our warehouse, in order to make any adds or moves, staff had to go back to a PC for the data entry. We were looking for something they could do for remote connectivity,” said Doug Brucker, information technology manager at AMCO. “That was the primary reason we were looking for an automated solution. We also needed to improve our physical inventory process. Workers used to count everything in the warehouse, write it on a piece of paper, bring it back to the office and then hand key everything into the system. It took at least two days with twice as many people.”

Solution found

AMCO found a solution to its data entry woes with QuikTrac I-Series v. 5.1 data collection software from Integrated Barcoding Systems (IBS). Brucker discovered the company at a MAPICS user conference, and found that QuikTrac was the only solution that offered real-time integration with MAPICS. Working together with the IBS team, Brucker was able to quickly get the project underway.

“They put together a project plan along with cost estimates; we submitted it to management, and they said, ‘Go for it,’” Brucker explained. The selection and implementation process took approximately one month, and Brucker said the actual installation progressed rapidly. “IBS said they’d have it up and running in five days, and they did that.”

Now, using wireless data collection terminals, physical inventories take half the time with fewer workers involved, and regular cycle counting has improved warehouse accuracy and performance. By eliminating paper forms and manual data entry, both shipping and receiving processes are more efficient as well.

“Before QuikTrac, we used 70 people to do the physical inventory in three days,” Brucker said. “After QuickTrac was deployed, we used 40 people over only one and a half days. We could have done it with even fewer people, but since it was the first time using the system, we had extra people on hand in case there were any difficulties.”

Although AMCO did not have a wireless inventory management system in place, the company was already using some handheld data collection devices from Symbol Technologies in its assembly operation. AMCO used the bar code scanners to track its finished water meters (all of which are tagged with a bar code that includes item and serial numbers) through production and match them to customer orders.

“We do testing of all water meters,” Brucker said. “They were doing that manually before I got here, so we put in a wireless LAN and handheld computers so they could use the devices to gather that data. Because we had that hardware, I preferred to keep that same equipment across the board.”

AMCO deployed additional mobile devices to its existing Cisco Systems wireless LAN infrastructure for the QuikTrac system. IBS provided a one-day training seminar for warehouse staff that hadn’t previously used the devices.

“It took them a while to get used to the handhelds,” Brucker said. “They had not been using them previously. After the training, they were able to pick it up and run with it.”

Multiple uses

Using label printers from Zebra Technologies, AMCO has deployed bar-coded location labels throughout its warehouse. Workers scan the location labels with the mobile computers and key enter quantities during inventory moves. Warehouse employees also use the devices for cycle counting and annual physical inventories.

“If they were doing something like year-end counts before, this process took literally days before they could record the actual data into the system,” said Ray Toren, sales and service consultant at IBS. “This was time that they couldn’t be doing production. They had to stop everything to do counts.”

“Now we’re much faster,” Brucker said. “It takes about half as long and with fewer people. With the QuikTrac software, we can just enter the quantity of each part number and send that into the MAPICS system wirelessly in the warehouse, as opposed to writing all that data down. Once all of that is completed, we can go back through and do spot checks.

“We’re doing cycle counting now that we know we’re maintaining our inventory much better. Before, we weren’t necessarily doing cycle counting because of the aggravation of writing down the item numbers, writing down the quantities, and then going back to a terminal and typing it all in. The warehouse is doing a much better job cycle counting and maintaining an accurate inventory.”

“Where they really felt the bang for the buck was with the physical inventory,” Toren added. “This process now takes hours instead of days.”

About the author

Brian Albright is principal of Albright Communications. He can be reached at 614/237-6707 or by e-mail at [email protected].