Value Tree
Ferguson offers industry leading Indirect/MRO Material Management Solutions focused on generating significant cost savings for our customers.
Our Value Proposition:
Leading with best-in-class associates and proven processes, Ferguson will deliver the lowest "total cost" solution. These solutions will generate significant cost savings in both the near and long term through our ability to provide the most competitive product pricing leverage, leading lean process design capabilities, and technical tool application capabilities.
For our customers this means:
- Enhanced Profitability through cost reduction and productivity improvement
- Enhanced Up time due to world-class material availability
- The ability to focus resources on core business processes
- A focus on continuous improvement driven by data, systems, and processes
Value Tree Assets
Cost Savings
Ferguson Integrated Services delivers significant cost savings to our customers both in the short term and over the life of the program. Our approach focuses on three primary areas: Lean Process Design, Supply Chain Management, and Productivity Projects. Each of these areas has defined methodologies, standardized processes and reporting formats and documented successes. The collective effort drives a lower Total Cost of Ownership for the indirect material process.
- Lean Processes
- Reduced cost through Lean
- Process Design
- Effective point-of-use
- Manpower requirements
- Cost Savings
- Looking at "total cost"
- Targets established
- Tracking and reporting in a standardized format
- Project logs monitoring progress and managing "road blocks"
- Standardization
- Volume leverage through standardization and consolidation
Data Collection & Reporting
If your intention is to control and be able to report costs and generate greater efficiencies, you need to know where your dollars are spent. Ferguson has developed systems that track expenditures by multiple methods. Any transaction processed through our system is captured at the product, cost center, commodity and end-user levels. Essentially, we can tell you how many you used, where and when you used them, who used them, who paid for them, how much you paid, what you paid in the past and how much you saved through Ferguson. The compilation of this data allows the accurate measurement of trends, progress and results. Such key performance indicators allow us to work with our customers to develop business plans that define a course of action and ultimately achieve results.
Administrative Ownership
Ferguson Integrated Services (FIS) has been a consistent leader in bringing new and innovative approaches to the integrated supply industry.
Ferguson was one of the first companies to be established as a "pure" integrator, focusing solely on integrated supply to avoid the distractions of participating simultaneously in traditional distribution.
When engaged as a full service integrator, Ferguson will own the supply chain process. For our customers, we:
- Perform receiving/inspection tasks
- Reconcile freight charges
- Eliminate clerical functions
- Eliminate thousands of invoices
- Provide a single audit trail
- Track performance to agreed goals
Storeroom & Materials Management
Kanban | Dispensing Machines | Min/Max
Proven Programs to Reduce Stock Levels 60%
While Improving Service Support to Over 99%
Objective:
Provide companies with an on-site stores program designed to increase on-shelf availability to almost 100% while decreasing inventory investment and floor space requirements significantly.
Service Offering:
- Help plants design a stores system which will work effectively with the way they operate.
- Ensure software can support the new process or offer alternative choices which can.
- Help build the data accuracy and support tables needed to transfer historic information and begin using the new system.
- Train plant management and support people to operate the new system and how to modify or expand its capabilities as required. Help define performance goals and reporting processes to manage with.
- If the Virtual Store Room approach is selected, help management understand its operation and the best ways to expand and develop it to achieve optimal results.
Ferguson Experience:
Over the last five years, Ferguson has developed and managed a number of plant store rooms including hundreds of self-service, "virtual store rooms" in 30+ manufacturing facilities. In many cases, the systems it has created and installed have improved inventory completeness and availability dramatically (in one plant, one time buys have been reduced over 60% and availability of store room items has reached over 99%) while reducing the total amount of material needed on site (in the same facility, inventory turns have increased from under 4 to over 30 times per year).
- By reducing the number of specials or one-time purchases, Ferguson has reduced the complexity of the logistics process as well as its cost.
- By improving inventory availability, content and turns, it has reduced wastage and excess stocking.
- By creating a system which provides superior support to its users, it has eliminated the back door selling and supply systems which undermine product price savings.
For more information, contact us at integrated@ferguson.com.
Kanban Process
Kanban System - Background
The Kanban process for replenishment was pioneered by Toyota for production materials in the 1950's and has broad application throughout the world for work in process inventory management, supplier replenishment, and workflow management. Kanban itself means "card" and the Kanban "card" is the key to the process. Each Kanban serves as a pull signal for the next lot of material to move down the pipeline or process.
FIS was among the first in the United States to offer a true Kanban system for use with industrial supplies in the late 1980's. Under this approach, most material used by the Customer is stored in Kanban lots, which are physically located in each manufacturing cell or set up area. These Kanban lots when consumed will be the pull mechanism for replenishment of material. This material will be picked, packed, and shipped to each appropriate setup area within the Customer's facility. Each inventory point will have approximately 2-4 weeks of inventory based on the Customer's requirements.
Application
Kanban has almost universal applicability. It can be used in a central crib environment or in a point-of-use inventory concept. Our Kanban process can be used in a lower volume, high tool mix job shop environment as well as a focused production shop. The Kanban process with its ease of use and self-correcting methodology is also a particularly good fit where there is no one individual responsible for the "inventory system".
Process Overview
The above is a graphical representation of the flow of material and information in the Kanban Tool Management System. On the top of this diagram you will see that tools are removed from the setup bins for consumption on a regular basis. In line with our goals of streamlining the administrative activities required to keep tools supplied, no counting of tools or processing of issue transactions occurs as tools are removed from the bin. The only rule that the tool retriever must remember is that when the lot is opened, the Kanban card associated with that lot must be placed in the collection tray in the crib. Then, at a specified time every day, the Kanban cards are gathered. The six digit Kanban card number displayed on each card is then communicated to FIS via bar-code. This bar code triggers creation of a replacement lot, Kanban card, and receipt ticket, as well as the "picking" of the replacement tool in the FIS warehouse. The replacement lot of material is then delivered to the Customer. A team member verifies that the quantity matches the receipt ticket quantity and then delivers the lot of material to the setup area as directed by the Kanban card (i.e. it specifies cell/area number, bin location). The receipt ticket is then processed. Processing of both usage and receipt cards can be done centrally utilizing a PC and bar code reader through our web site.
FIS has over 175 successful Kanban Tool Management systems installed at numerous customers nation-wide.
Advanced Features
The FIS Kanban system offers several other features. These features include:
- On-line usage data in monthly and quarterly "buckets" with averages
- Advanced Problem Detection reporting
- Shortage Detection Reporting
- Costing to Component Level
- Shipped but not Received
- Bar-coding including customized document layouts
- On-line item planning
Tooling and supply usage can be billed and tracked by a number of variables including, operation, manufacturing line, or other pertinent information.
Dispensing Machines
Automated Supply Dispensing "ASD"
The FIS Automated Supply Program is an unconventional new way to manage high-usage, high-value, perishable tools such as inserts, drills, taps, end mills, bandsaw blades and toolholders. It's a self-contained, secured, computer-controlled dispensing system that can provide 24 hour access to inventory.
FIS Can Help You Choose the System That Fits Your Inventory Needs
The Standard Automated Supply Program comes with a host computer station attached to as many as 32 stations. Each station comes with a key pad and a display built right in for you to make your product selections.
The "Tool-Touch" System uses a 15" flat panel touch screen mounted to the front of each station to display a variety of tool and shop information. This system even displays digital pictures, scanned drawings or screen shots of cutting tool application data – making it ideal for automating tool control and gaining vital information for your shop. The Tool-Touch System is fully networkable and uses standard network protocols, allowing nearly unlimited installation possibilities. Each dispensing station can control up to 70 different items and as many as 30 packages of each item.
Total Inventory Control
ASD is Total Inventory Control in a Vending Machine
- Benefits
- Never running out of what is critical to manufacturing
- Provides point-of-use product availability
- Decreases machine downtime
- Drastically reduces inventory levels
- Reduces obsolescence
- Increases productivity – no more long trips to the tool crib
- Automates procurement
- Offers total inventory accountability
- Features 24 hour, unattended availability
- Controls access of inventory
- What The FIS ASD System Can Do For You
- Tracks usage by employee, department, machine and job and generates comprehensive reports
- Provides you with detailed inventory information
- Tracks who is utilizing specific products and charge them to the job and machine selected
- Allows you to set a limit on the quantity an individual may extract from the machine
- Allows you to set daily, weekly and monthly budgets for each employee. Budgets can be modified by a supervisor at any time
- Allows you to stock both large and small items – Flex Bins are available for items too large to fit int he machines
- Can simplify accounting processes – automatically generates an ASCII file that can be uploaded directly to any computer
- Allows you to compare usage by machine and detect inconsistencies before they become problems
- The Tool-Touch System offers all the capabilities listed to the left, plus:
- Features a user-friendly interactive touch screen – transactions take less than a minute
- Displays product information by simply touching the "View Item Icon"
- Features menus so simple the operators can train themselves
- Remembers the last visit to the station and defaults to what the user previously selected
- Has unlimited software possiblities
- Available System Reports
- Purchase order
- Re-order
- Multiple pick documents with bar codes
- Inventory price and cost reports
- Transaction reports by employee, department, machine, job or item
- Automatic reporting capabilities
- Pick Sheets
- Bin Status Report
- Requirements
- Receiving
- Employee Cards
- Summary Reports
- Bin Labels
Why You Should Consider ASD
- If any of these apply to you…
- Centralized tool crib that is unmanned during night shift
- Inventory counts are not accurate
- Tools are kept in unsecured cabinets
- Inventory usage is not monitored on a daily basis
- Restocking and maintaining the inventory is done manually
- Purchasing is done manually
- Dead or obsolete inventory
- Employees must stop production and walk to the tool crib
- Consider that ASD offers:
- Secured, computer-controlled dispensing system 24 hours a day
- Detailed inventory reports
- Secured dispensing system that allows you to regulate use by item or user
- Monitored by FIS with remote control software
- FIS manages the inventory and maintains the system for you
- FIS automates the entire process
- Helps you control obsolescence
- Product availability right on the shop floor helps you decrease machine downtime and increase productivity
FIS ASD Opportunities
- FIS can manage and/or own the inventory that is stocked in the system
- As tools are used, they can be billed bi-weekly or monthly
- FIS can manage a stand-alone automated system for you, or we can manage all of your tooling needs
- FIS maintains the inventory and keeps
- FIS manages the inventory and maintains the system for you
- FIS automates the entire process
- Helps you control obsolescence
- Product availability right on the shop floor helps you decrease machine downtime and increase productivity
Min/Max
Min/Max Inventory Management - Background
Traditional inventory management systems largely are based on min/max logic in a storeroom environment. When an item's inventory level reaches the minimum level it is replenished to the maximum level. Keys to successful min/max processes are frequent reviews of the min/max level and strong discipline to record each transaction.
Application
The FIS System is most applicable to a centralized crib environment or multiple crib environment. These cribs can be operated by FIS personnel or by the Customer's personnel.
Process Overview
The FIS Min/Max System can be deployed through remote hosting and internet connectivity, or hosted locally on an FIS server. Several interface methods exist including Tool Touch or handheld programmable scanners.
The Tool Touch Screens can be used in a variety of ways including at the crib, or remotely for requesting material for delivery. Data is collected with each transaction based on the defined system set-up.
- Examples include:
- User
- Cell
- Job
- Department
- Machine
- Tool
FIS monitors the inventory levels and replenishes as appropriate. We also actively monitor inventory levels and adjust accordingly. In addition to material held in the crib, the FIS Min/Max system can track gauges and other customer managed items. Because of the high level of data acquisition, a large variety of reports are available to the customer.
Supply Chain Management
Auction Management | Sourcing & Procurement | eCommerce
Ferguson has installed new supply chain management technology in dozens of manufacturing locations in the past decade. In addition, we have implemented the first web-based system in two major foundry facilities in 1998, winning an award for achievement from General Motor's Information Technologies Group. Through our work with leading companies like General Electric, General Motors, and Johnson & Johnson, Alcoa, and Baker Hughes, Ferguson has proven to be one of the best at making new technology work in a real life manufacturing environment in diverse industries.
- Strategic Sourcing
- Focused Savings Realization
- Data Aggregation & Analysis
- Benchmarked Price Deflation
- Supply Base Rationalization
- Tactical Purchasing
- Reduce Transaction Cost
- Spot Buys
- Emergency Procurement
- Replenishment
- Speed to Response
- Service Focus
- Supports the plan
- Category Management
- Supplier Performance Mgt
- Vendor Qualification
- Market Intelligence
- Forecasting
- Trend Analysis
- Spend & Source Compliance
Auction Management
Management of 1,300 e-auctions, identifying almost double-digit savings opportunities
Objective:
Help companies create a controlled market pricing mechanism for products and services which can benefit from a competitive bidding environment.
- Service Offering:
- Help select products to be included in each auction event.
- Develop qualified participants and invite them to participate.
- Define auction rules and ensure participants are informed.
- Set opening bid prices for each item included in each auction event.
- Manage the actual auction event and identify the winning bidder.
- Help customer turn winning bid into a live agreement.
For more information, contact us at integrated@ferguson.com.
Managing the Procurement of Over $450 Million In MRO Material
Objective:
Augment existing plant resources with trained specialists to find unusual or difficult items.
- Service Offering:
- All of our purchasing managers and over two-thirds of our purchasing associates have earned a Certified Purchasing Manager (C.P.M.) designation from the Institute for Supply Management. (http://www.ism.ws/certification/?navItemNumber=4891)
- Provide sourcing expertise covering all major MRO commodity areas.
- Access to a data base covering 243 commodity subgroups and thousands of current transactions with real life pricing.
- Ability to manage the entire transaction cycle to improve on-time delivery.
- Channel simplification options for certain commodities to help reduce cost and improve availability.
- State of the Art Data Collection and Analysis capability and assistance.
Ferguson Experience:
Ferguson's MRO experts source and procure in excess of $450 million in material each year covering the full range of indirect material needs. Their services are used by some of the best companies in the United States, who monitor their performance against world class standards and objectives. In addition, Ferguson has developed direct sourcing access to a wide range of items from manufactures not involved with its traditional distribution business and can use these contacts to help companies simplify their external supply channels.
The FIS Tool Management Program is founded on the concept of "Total Objectivity", where the customer has the final say in choosing the item and brand provided by FIS. FIS works continuously to create "a level playing field" for suppliers so that the "best item for the job" is available and chosen for each application.
For more information, contact us at integrated@ferguson.com.
e-Commerce
Over 50 Successful Plant Floor Installations Including The First True Web Based System in 1999
Objective:
Augment existing plant resources with trained specialists during the installation effort.
- Service Offering:
- Ensure all effected departments and participants are included in the planning and installation effort.
- Review existing data files and identify changes which will be needed to make them work with the new technology
- Provide trained personnel and expertise to help the location create or adjust data identified by Step 2 including the scrubbing existing product files as well as creating new tables and summaries to work with functions included with the software offering.
- Help existing suppliers adjust to the new process for working with the plant.
- Augment training functions as required and help administer training at the plant site.
- Provide on-site support during the program start up.
Ferguson Experience:
Ferguson has installed new MRO process technology in over 50 manufacturing plants including the first two web based programs at a major auto company, for which it received an award from their Information Technology department. It has worked with almost all of the major web portal providers including Ariba, CommerceOne, I2, iProcure and MRO.Com. It is an independent expert at making all of these options work better in the real world.
Ferguson can provide expert assistance with hands on experience in all areas of the installation effort including Information Technology (both software operations as well as communications and data transfers), Training, Product File clean up and overall operational designs.
For more information, contact us at integrated@ferguson.com.
