Original Date: 10/27/2003
Revision Date: 01/18/2007
Best Practice : Tool Crib/Purchasing
Auto-Valve, Inc. converged its tool crib replenishment and purchasing functions into one function utilizing Dayton Supply and Tool Company’s integrated Cribware software. This process allowed the number of purchase orders to be cut in half, and tooling and supply costs to be reduced approximately 25%.
Prior to implementing AS 9100, Auto-Valve, Inc. (AVI) had more than 350 suppliers, resulting in an average of 1,200 purchase orders being processed annually with seven days processing time per purchase order. Between 1997 and 2000, supply costs rose with increases of about 16% (Figure 2-1). Dedicated purchasing, inventory management, and scheduling positions were required to complete each task. The system failed to provide performance metrics and track price variations. Because of its size, AVI lacked technical support from tooling manufacturers.
During mid-2000, AVI entered into an integrated supply agreement with Dayton Supply and Tool Company (DST), which included the installation and maintenance of Cribware software to control inventory supply and document the tooling requirements associated with specific jobs. DST provided the software, user training, and system implementation, and worked with AVI to update its existing tooling database, barcode the tooling inventory, and streamline its purchasing process.
Since implementation of the Cribware software, AVI’s vendor base has narrowed to 91 suppliers. The company now processes an average of 600 purchase orders annually (Figure 2-2). The software also provides vendor performance metrics and a supplier database, and affords AVI the opportunity to negotiate fixed prices at the beginning of the year. There is no longer the need for dedicated purchasing, inventory, and scheduling positions, thus only one detailed invoice is received each month. AVI leverages its relationship with DST to receive manufacturer technical support and new product demonstrations. This process allowed the number of purchase orders to be cut in half, and tooling and supply costs to be reduced approximately 25%.
DST’s Cribware software provided tool-tracking capability and enabled AVI to identify usage by department, task, and work center. This led to a significantly reduced expendable cost per manufacturing hour and improved job estimating capability. The integrated software platform and purchasing agreement resulted in significant savings for AVI.
Figure 2-1. Tool Crib/Purchasing – Previous Conditions
Figure 2-2. Tool Crib/Purchasing – Current Conditions
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