At Volvo Motor Graders, hand-held and vehicle mounted wireless terminals link a mobile workforce to the materials management system.

More than 15,000 parts go into the assembly of a road grader, and Volvo manufactures 13 different models at its motor graders facility in Ontario, Canada.

"Handling the logistics of all those components is quite a job," says Clair Hodges, applications supervisor at the manufacturing plant.

Last December, Volvo began the process of implementing a new high performance radio frequency data communications (RFDC) system (Psion Teklogix, 905-813-9900. www.psionteklogix.com) that links the plant's workforce with the materials management solution in the enterprise resource planning (ERP) system.

Thanks to an aggressive implementation schedule, the first users on the system were up and running in just six weeks. "By the time the infrastructure was in place throughout the plant, we were processing transactions on the receiving dock," says Hodges.

When the rollout is complete, the system is expected to transform a paper-intensive batched inventory management and manufacturing system into a real-time information system with better control over the movement of parts and inventory.

Volvo Motor Graders manufactures complete motor graders and replacement parts at the Ontario facility.

Component parts and raw materials flow into a storage area from the receiving dock and then onto the shop floor where they are routed to work centers. Assemblying a grader can take up to two weeks.

In addition to finished goods, Volvo also manufactures parts and components. Some will be used in the assembly process, while others are manufactured in bulk and sent back to the storage area for replacement and repair.

The receiving, warehousing, and manufacturing processes are all tracked by the materials management module in the ERP system running on an AS/400. The existing system provides all of the functionality needed to manage the facility.

"We are primarily a manufacturing facility, not a warehouse," says Hodges. "We don't need the depth of functionality that you would typically get from a warehouse management system, even in the storage area. The materials management function provides us with everything we need to manage the flow of materials from the receiving dock to a finished product."

Prior to this implementation, however, the materials management module was accessed manually and in batch. It was labor intensive and prone to error. Material handlers and fork lift operators, for instance, received paper pick lists at the beginning of the shift. To update the system, they either had to stop work to key in data into a central PC, or wait until the end of their shift and batch in all of the information at one time.

"All motor graders may look the same, but there is a fair amount of customization from one machine to the next," Hodges explains. "To coordinate all of those options and the flow of that material into the finished good in a batch system was dicey at best."

The bottom line: Managers weren't getting timely information or a true picture of the activities on the shop floor.

Last year, the company created an inventory management team to gain better control over our inventory and processes in a real-time environment.

The transformation from hard-wired to wireless access to the ERP system actually began late last summer. In August 2000, Volvo developed a standard bar code label in conjunction with its highest volume suppliers.

"Our plan was to get the 20 or 30 high volume shippers the labels first," says Hodges. "Then, we'll gradually work our way down to the smaller suppliers."

Volvo needed an RFDC system that would interface with its SAP ERP system, could be implemented rapidly, and was built on an open architecture that could be expanded in the future as new needs were discovered.

In late December, they began the installation of an RF infrastructure, including servers, transmitters, and RF base stations. Hand held scanners were chosen for inventory pickers. The same models were mounted on the fork lifts using a bracket. PC's are still used on the shop floor for production order and operation confirmation, but they are being equipped with scanners to automate the data collection process.

Seven transactions can be accessed from the scanners.

Purchase order receipt is used to verify inbound orders before the inventory is stored in the warehouse.

Production receipt is used when replacement or component parts have been produced in batch on the shop floor and are now moving to the storage area.

Location-to-location directs the movement of goods from the storage area to the floor, or from one grid in the plant to another.

Quality to unrestricted is unique to the SAP materials management module. This transaction provides for the movement of material from the quality inspection area to either storage or the plant floor. When material is unrestricted, the materials requirements planning system considers it as material available for manufacturing.

Plant-to-plant is a transaction for moving materials from the manufacturing floor to the warehouse or another facility.

Cycle counting can be accessed from the terminals.

Operation confirmation tracks the status of operations on the manufacturing floor.

The system can also do a location query to find the location of a part on the fly. Training began on the receiving dock even before the implementation was complete. The functions there were less complex and there were fewer employees to train. "We had just three people on the receiving dock," says Hodges. "They were transacting business by early February."

In fact, says Hodges, rolling the project out to other areas of the facility has been seamless. "Our guys on the floor are already used to keying in transactions, so this was accepted without any real stumbling blocks," says Hodges. "What we really wanted to do was make their jobs easier so they don't have to go back and batch their work in."

"Because this project is part of an inventory team effort, we expect that inventory accuracy is going to be our biggest gain," says Hodges. "Our goal is to get better control of our inventory by managing transactions in real time. Then we can reduce the size of inventory."

In the future, he adds, Volvo intends to leverage more of the RF network down the road, with other applications. "We began with just seven transactions," Hodges says. "But we also bought a software development package so that our in-house developers can create our own transactions down the road. We believe we can integrate this technology with systems across our enterprise."