Mowing down costs at MTD

The lawn equipment maker's very-narrow-aisle storage system avoids new construction and consolidates parts warehousing.

By -- Modern Materials Handling, 7/1/2000

MTD Products has mowed down the costs of storing its assembly components. Instead of building a new storage facility for them, the lawn and garden equipment manufacturer saved on space by installing very-narrow-aisle racking in its existing facility. The system enables MTD to consolidate its parts warehousing into a single area at its Willard, Ohio plant.

"We had to make the most of the cube we had," says Arlyce Amerien, general manager. "We didn't want to construct a new facility, with its associated costs. Yet we faced the challenge of getting the majority of our assembly components under one roof."

The VNA storage configuration saved about 100,000 sq. ft. beyond what a conventional storage layout would have required with 14-ft.-wide aisles. Some 30,000 stockkeeping units (SKUs) for assembling MTD's yard and snow removal equipment can be stored in the VNA system. MTD was able to create 3,200 additional load openings, increasing cube utilization from 40% to 60% with VNA compared to a more conventional rack system.

Four specialized, VNA lift trucks serving this system do double duty. They work VNA aisles only 70 in. wide. But the moving-mast trucks (Drexel, www.drexeltrucks.com, 215-672-2200 ) also easily act as backups to more conventional forklifts.

These 25 conventional lift trucks service the remainder of the manufacturing area. The vehicles are suited to working in far wider aisles of 12 to 14 ft, in receiving and shipping dock areas as well as in the plant. But they can't enter the VNA aisles.

"We get excellent flexibility with this arrangement," points out Ron Martin, material handling supervisor. "We have a sufficient number of very-narrow-aisle trucks so that if one is down for maintenance, we can still access our materials in storage.

"This makes the economies of VNA storage risk free," Martin continues, "and gives us several trucks that we can also use to load and unload truck trailers when necessary."

Equipping operators of both the VNA and conventional lift trucks with hand-held radio frequency data communication (RFDC) terminals has resulted in major benefits as well. With real-time data, MTD runs a leaner, more efficient components warehouse.

Operating on a 900 MHz spread spectrum frequency, 24 terminals are tied into an enterprise resource planning (ERP) software system. This system links receiving, storage, and manufacturing.

Improved inventory control over assembly components was a key goal to be achieved through ERP, data capture, and the VNA system.

With the data capture and ERP software systems, says Steve Albright, materials control manager, "we are able to do things a lot smarter than we did in 1998." That year MTD had 55 lift trucks. By 1999 the lift truck fleet was down to 29, including the 4 swinging-mast trucks. "A lot of the reason for this reduction is the hardware and software changes we made to our materials handling and inventory systems," he adds.

Lawn tractors, snowblowers

Manufacturing at MTD follows the seasons. The company builds powered lawn and garden equipment for the spring and summer selling periods, then makes snow removal equipment for the fall and winter seasons. Yardman and MTD Yard Machines are brands in MTD's line of models.

The Willard, Ohio plant occupies 400,000 sq. ft. When it came to decisions on how to reorganize storage of components within the existing facility, one factor featured prominently in planning. Storage had to be limited to ceiling heights of 18 ft. A second limiting factor was that only 10% or less of the total plant area could be dedicated to components storage.

A VNA rack system 210 ft wide by 150 ft. long was designed and installed. It has 12 aisles. Aisles are 70 in. wide and 150 ft. long. Four VNA trucks operate in this system.

Conventional supplies for assembly are stored in the VNA racking. Stampings and some other components are stored in welded wire, steel, and plastic bins in two areas separate from the VNA racking.

MTD has trimmed its inventory by up to 50% with the new storage and data capture systems in place. Meanwhile, the company has greatly increased its inventory accuracy, as Albright points out.

"Until we implemented the ERP system, MTD was running at 30% to 40% inventory accuracy," he says. Now it's running in the high '90s," he says.

Previously, it had been "a nightmare to keep inventory accuracy," he explains. Personnel had to record transactions on paper for both receipt of products into the plant and for specific transfers within the facility. Then those paper-based records were taken to a central location for keying into the computer.

"The data capture and ERP systems," Albright continues, "have reduced inventory by as much as 50% in the last 5 years. We went from four or five turns a year to as many as 30 turns currently for some of our faster moving production items.

"Four or five years ago MTD worked on a 20 to 30 day inventory bank," he adds. "Today, that's been reduced to a 5 to 6 day supply."

ERP helps trim stocks

Because inventory turns so quickly, and there is no problem with parts becoming out-dated, MTD decided that a first-in/first out (FIFO) system wasn't necessary.

At the heart of this inventory system is the ERP software running on an AS/400 computer. The software incorporates a materials requirements planning (MRP) program for materials release and master scheduling of work in the plant. The system then ties into the 24 terminals used by lift truck operators so there's real-time exchange of inventory status data.

Now, operators scan bar codes on stored components or items to be staged in the VNA rack system or in other areas. Scanning is performed directly from the truck, saving time and effort.

In the past, MTD used a three-part, tear-off label system for tracking and identifying components. The old system required operators to dismount their trucks to perform inventory-related tasks.

The operator's hand held terminal has an inquiry mode as one of its features. This capability informs the operator of the location of a partial pallet load or the load closest to where the operator is when sending the query to the system. At MTD, partial pallets are pulled first, and the system achieves economies by minimizing operator travel times.

Data capture by the terminals starts in receiving. Each vendor shipping to MTD must identify its parts with an AIAG (Automotive Industry Action Group) standard bar code label. That label has the part number, quantity, vendor number, and purchase order number. As parts are received, they are scanned and logged into the system.

The combination of data capture hardware, ERP software, and VNA storage and trucks has helped the Willard plant become a far leaner operation on its parts warehousing side, as Martin observes. "There's a smaller, yet more efficient lift truck fleet now," he adds, "that takes the risk out of relying on VNA storage."

System Snapshot

MTD Products, Willard, Ohio

BUSINESS:
Manufacture of lawn and garden equipment and snow removal machines

FACILITY SIZE:
A 32,250 sq. ft. very-narrow-aisle rack system supports a 400,000 sq. ft. manufacturing plant

WORK FORCE :
40 employees in warehousing; 3 shifts (2 for production; 3rd shift for cycle counting)

STOCKKEEPING UNITS:
30,000 SKUs

VERY-NARROW-AISLE TRUCKS:
Drexel, 215-672-2200, www.drexeltrucks.com

VERY-NARROW-AISLE STORAGE RACK:
Ridg-U-Rak, 814-725-8751, www.ridgurak.com

RADIO FREQUENCY DATA TERMINALS:
Intermec, 425-348-2600, www.intermec.com

ENTERPRISE RESOURCE PLANNING SYSTEM:
MAPICS, 678-319-8000, www.mapics.com