continued...

Can you track your indirect expenses?

Ponce uses the illustration above to describe the lack of inventory visibility that exists in many manufacturing facilities throughout North America. He says the problem exists because companies simply lack the systems and processes to track indirect expenses more closely. "Typically, in our industry, supply chain management begins at the purchasing agent's desk when he places the order and ends at the receiving dock when they receive the merchandise. What happens in the middle is an unknown," he says.

AutoCrib and its distributors, like MTS, help manufacturers control their tooling costs by installing software-powered automated point-of-use dispensing machines on the plant floor. The point-of-use dispensing system works on multiple levels. Putting frequently consumed items closer to work centers eliminates the need for plant employees to travel to and from far-flung tool cribs to stock up on supplies. Since the dispensing machines are powered by inventory management software, manufacturers have real-time access to better tool consumption data. Plus, employees who know their tool usage is being monitored are more frugal with their tool usage.

"We try to follow Lean manufacturing principles. In a Lean system, as one-item drops out during a project, something drops in to replace it. That's a philosophy we try to espouse with our customers. It minimizes their inventory and also assures that they don't run out. We're constantly monitoring consumption," says Ponce.