Classic Industries, Inc., a Forney, Texas, producer of fascias for convenience stores, and gas stations, confronted a classic problem. After landing a large contract to produce station fronts and canopies for Shell Oil's retail outlets, the existing manual inventory control system just wasn't enough to satisfy customer service requirements.

"We were a build-to-order manufacturer," says Jeff Bishop, production engineer. "We were scrambling at the last minute because we ran out of raw material that we thought we had in stock."

That translated into late shipments and short orders under the best of circumstances. Shipping accuracy "was probably 50/50" says Bishop.

Shell, however, required accurate shipments and an inventory of parts.

The solution was an automatic data capture and inventory control system (Strandware Inc., 715-833-2331, www.strandware.com.) that has increased inventory and shipping accuracy to 97% plus.

What's more, the system can also be used for quality control by tracking raw materials throughout the process.

Classic receives flat and tubular aluminum and steel structural stock and aluminum composite materials that are then cut and shaped into component parts and decorative elements.

Prior to implementing an automated system, the company had no accurate way to track what was on hand or project what might be needed.

Today, the inventory system begins to track material when it arrives at the receiving dock. A crate of metal structural stock or aluminum composite typically has 50 sheets of material. A lot number assigned to the crate by the supplier and the number and color of sheets is keyed into a terminal at the receiving dock. That tells Classic how many crates of a certain color are on hand.

That information is used to create a master bar code for the crate that includes the lot number, color, number of sheets of material, and length of the material.

The master label includes tear-off bar coded tags. When material from a crate is used, a bar code tag is removed and used to reduce the inventory.

Manufactured material is assigned to a particular job. If the material is cut into pieces, each piece receives a bar code label that includes the lot number for tracking. "If a piece of composite material delaminates after it's been installed, we want to know how many other customers might be affected," says Bishop.

Once all the pieces for a job have been cut, they're taken to a packing area where they're placed in boxes. A packing list is created along with a label that relates to that job. Bishop scans the label to verify the parts against the order.

The inventory management system updates inventory levels as product is scanned. Each day, Bishop runs a report that lets him know when he's close to the reorder point on inventory.

The benefits? One is a 97% accuracy rate. "We very seldom send out a shipment that's short of parts now," says Bishop. What's more, lead times for new orders have been reduced by 66%, from 6 weeks to 2 weeks.

The most important benefit may be the improved customer service that enables Classic to meet Shell Oil's requirements. "We know what we have in inventory when we need it," says Bishop. "I don't think we could handle this customer without it."

Click on this icon to learn how Grote Industries uses bar codes to track inventory.