Michelman, Inc. was founded in 1949 in Cincinnati, Ohio as a manufacturer of chemicals and coatings. Since its beginnings, Michelman has expanded into five locations worldwide and is continually adding customers. Michelman’s capabilities for research and development, along with leading-edge technology, provide opportunity for continual business growth.
Although Michelman’s production technology is leading edge, prior to JD Edwards and RF-SMART, their supply-chain technology was not. Michelman used manual processes that led to significant lag time between inventory movement and system updates. There was no real-time visibility, which opened the door to inventory shortages and over-stocking. Michelman knew they needed to gain greater operational efficiency and visibility and decrease manual processes in order to manage their business growth.
Michelman decided to do away with outdated inventory movement processes and upgrade to JD Edwards 9.0 and implement RF-SMART. “Once we were able to re-implement our JD Edwards software, we could take advantage of the best practices around the world and part of those best practices is data collection and RF-SMART,” said IT Business Analyst with Michelman, Steve Mowchan.
Many of Michelman’s pain points were quickly eliminated through the RF-SMART implementation. Using RF-SMART on handheld devices, end-users can easily scan product information for picking, putaway, inventory transfer, ship confirmation, and inventory lookup. This information is immediately updated in JD Edwards, completely eliminating the inventory status lag-time previously experienced by Michelman.
The capability for real-time inventory updates has also created efficiencies in several areas of the warehouse. Through work order material issue and completion functionality, RF-SMART takes raw materials, used for the work order, immediately out of the inventory log. This functionality guards against surprise raw materials shortages and the need to over-stock. Michelman also uses RF-SMART’s sales order picking and transfer functionality to automatically transfer their picks to the ship dock location. Additionally, Michelman is able to do receipts at the receiving dock, so inventory counts are updated without delay.
Real-time inventory picking validations have increased Michelman’s batch accuracy. Prior to scanning and validation with RF-SMART, entire batches would go bad when a Michelman employee chose the wrong product. Now, there are no concerns about employees misreading a product number, because RF-SMART compares picks to the work order and errors are flagged immediately.
RF-SMART has allowed Michelman to grow their business without increasing their workforce. Michelman no longer spends hours searching for inventory in multiple locations of the warehouse, thanks to RF-SMART’s functionality for accurate and real-time data. “Michelman has experienced double-digit growth over the past few years, and in the 15 months [since implementing RF-SMART] we have not added any shipping or receiving personnel or material handlers…We have not added bodies because we’ve been able to recoup a lot of the time we spent looking for stuff, now doing stuff.”
Due to the significant labor hour savings, Michelman has now freed up man hours to be used for cycle counts. Using the cycle count process, with RF-SMART functionality, Michelman was able to complete their annual physical inventory in one day instead of two. Considering the cost-savings from shutting down operations for one less day during the physical inventory, as well as the hundreds of labor hours saved, this one feature has already saved Michelman hundreds of thousands of dollars.
“That’s going to be a cost justification over and over, because of all the time that we had to shut down the manufacturing facilities, and plenty of salaried personnel and hourly personnel were using a day or two days worth of work counting,” said Steve. Their future hope is to do regular cycle counts and completely eliminate annual physical inventories.