MAKING THE NUMBERS WORK
by Mr. Steve Stark
Production at Tobyhanna Army Depot, PA, requires a vast amount of raw metal—hundreds of different materials—and a lot of vendors to supply those metals. While that was a solution, it also becamea problem.
Working with multiple vendors over the years resulted in a complex process for cataloguing metals, which in turn periodically resulted in stock number redundancies or multiple part numbers, according to Michael Henry, chief of the Production Management Directorate’s Materiel Management Division at Tobyhanna.
Tobyhanna Army Depot is the largest fullservice electronics maintenance facility in DOD. Its mission is total sustainment: the design, manufacture, repair and overhaul of hundreds of electronic systems including satellite terminals, radio and radar systems, telephones, electro-optics, night vision and anti-intrusion devices, airborne surveillance equipment, navigational instruments, electronic warfare,and guidance and control systems for tactical missiles. A major element of the U.S. Army Communications – Electronics Command, Tobyhanna prides itself on the state-of-the-art automated test equipment and other advanced technologies it uses to deliver products and services.
With no standard supply format, it was time-consuming and inefficient to research all possible materials every time a customer submitted a request. To avoid the excess inventory that resulted from placing unnecessary orders, employees had to perform a manual review of every part to find a match. This happened on virtually every project and led to increased lead time, excess materials and higher costs. It also became a storage issue when the same material was stored in multiple locations, which made the search more difficult.
Ultimately the solution, which Tobyhanna developed after extensive analysis, was to consolidate its supply and supply tracking by using TW Metals Inc., aglobal supplier of specialty metals and the Northeast prime vendor of raw metals for DOD activities on the East Coast. Thus Tobyhanna tapped into the efficient supply chain already established for TW Metals.
ONE PROCESS, MANY REQUIREMENTS
Tobyhanna, as an Army Working Capital Fund installation, gets its operating capital from its revenue. So it has to deliver high-quality products on time.
“To improve efficiency and streamline processes, we developed a standard process that met all of the depot’s requirements,” Henry said. “The TW Metals project has helped us address issues and better manage our raw metal stock.”
Previously Tobyhanna Army Depot part numbers were not easily identified; items could not be ordered through the DOD Supply System when using the locally generated part numbers. Tobyhanna part numbers consisted of a description
EXAMINING THE PROCESS
that was more familiar to the engineer and vendor.
An example was the part number for aluminum bar, ALBR6061/.75X1.5X16FT, which when researched translated to National Stock Number (NSN) 9510-00493-4080. Using this NSN, Tobyhanna was able to submit a Military Standard Requisitioning and Issue Procedures (MILSTRIP) request to the Defense Logistics Agency (DLA) using its prime vendor service. This established a delivery time of seven days and eliminated the solicitation process.
“We converted all material numbers to National Stock Numbers, created detailed descriptions for each entry into the new system, and eliminated the depot’s parts numbering system in favor of a standardized ordering system,” Henry said.
The results? “Employees using the new system have been able to reduce the time it takes to research part numbers for raw metal stock,” said Charles Corman, a supply technician in the Materiel Management Division. “The improved methods have had a ripple effect across work centers, helping organizations meet requirements in a timely manner.”
“Personnel have standardized data entry by listing multiple part numbers under the same National Item Identification Number, streamlined the use of National Stock Numbers and reduced the amount of time personnel spend researching the various raw materials,” Henry said.
The TW Metals project marks a major improvement in supply chain management, according to Charles McDermott, a supply system analyst assigned to the Materiel Management Division. “The enhanced supply process decreases lead times, reduces excessinventory and material cost, and keeps projects on schedule,” he said.
Since the TW Metals Project was put into effect in the fourth quarter of FY10, the depot has been able to reduce the average lead time for ordering metals from more than two months to 14-21 days. Other improvements include a rate of on-time delivery of nearly 99 percent, McDermott added.
To remake the old system into a newer, more efficient one, a process improvement team performed a thorough review of how Tobyhanna orders and receives raw materials, as well as how it enterspart numbers into its tracking system. In the process, the team identified ways to improve the supply chain, according to Henry.
Tobyhanna employees are empowered to search constantly for ways to improve processes. The depot has conducted more than 1,115 Lean Six Sigma events since FY02 with participation from 98 percent of its workforce, resulting in more than $204 million in savings and cost avoidance.
Members of the Materiel Management Division gathered input from across the depot before deciding to make the changes in its supply chain, Henry said.
It took the team of supply analysts and technicians, production controllers, expediters, engineers, material handlers and members of a remanufacturing bills of material team about a year to fully implement a solution, according to McDermott. “As part of the process, team members researched material descriptions, and standardized NSNs and TW Metals part numbers. Once the new order entry system was implemented, employees were able to cross-reference manufacturers’ part numbers and Tobyhanna’s part numbers with TW Metals part numbers and NSNs,” he said.
Supply Technician Corman noted that Tobyhanna decided to work with DLA Troop Support, Philadelphia, PA, as aprimary supply source for raw metals, “partially based on DLA’s ability to make purchases to meet the needs of the depot.”
DLA contracted with TW Metals to provide raw metals. Tobyhanna in turn contracted with DLA for TW Metals to use a “just in time” delivery schedule for material, eliminating the need for on-site storage. “Working with TW Metals through DLA provides a standardized process for purchasing raw material where none existed in the past,” Corman explained. Contrast that with the old process in which a purchase necessitated soliciting bids from a variety of local vendors, with no consistent lead times and constant variations in pricing.
TW Metals’ materials are delivered twice a week and sheet metal is banded, eliminating the need for users to count and stack sheets manually.
The just-in-time contract “requires one full truckload of material to be maintained at the machine, one pallet stored in the warehouse and a scheduled delivery in transit to replenish the warehouse, McDermott explained. “Requisitioning material using this method has resulted in a compressed lead time of 7 to 11 days,” because the constant flow of material reduces the need to stock, store and issue it.
“Basically, we leveraged technology to achieve a new possibility with teamwork and efficiency,” said McDermott.
Employees now use a shared spreadsheet, he said, to track several key elements— requests for quotes and orders; changes to lot size and lead delivery time; DLA long-term, direct-vendor delivery orders; delivery and request dates; and Tobyhanna’s part number conversions.
“The spreadsheet is maintained on a shared drive to monitor all raw metal commodity ordering. Several organizations share the responsibility for maintaining the process and providing accurate information,” McDermott said. That effective communication is maintained through meetings with production engineering and systems integration and support personnel, which allows for a more efficient process for the entire purchase request.
McDermott pointed out that personnel can check metal ordering status at the TW Metals website and through the Logistics Modernization Program. They can enter information directly into the new system. “The new system offers a consistent
process, leading to a more efficient methodology,” McDermott said. Because Army contracting personnel are not involved, “The middleman is removed, which speeds up the process. There are fewer purchase requests performed each day, allowing employees to perform more analytical work.” There is even a process for engineers who build the bills of material to check NSNs and TW Metals’ Materiel Control Numbers.
“This kind of process improvement and partnership effort are fundamental to the Army’s efforts to improve its supply chain management,” Henry said. “The overall benefit derived from this contractis [that] the Joint warfighter receives a safe, high-quality product on time,” he said. “Implementing this new process has already had a direct impact on several high-profile projects.”
For example, the Counter Radio-Controlled Improvised Explosive Device Electronic Warfare workload received material specifically palletized for Tobyhanna’s requirements, which resulted in a more efficient process and reduced costs, according to McDermott. In addition, “We were able to obtain an airframe-quality alloy for the U.S. Marine Corps helmet bracket workload at a reduced lead time and reduced cost,” he said.
For more information, go to www.troopsupport.dla.mil/ce/ orwww.twmetals.com.MR. STEVE STARK provides contracting support to the U.S. Army Acquisition Support Center for SAIC. He holds a B.A. in English from George Mason University and an M.A. in creative writing from Hollins University. Stark has worked in a variety of positions supporting communications for the U.S. Army and U.S. Navy, and has written about defenserelated topics for more than a decade. He was the founding editor of the Program Executive Office Soldier Portfolio and edited the U.S. Army’s Weapon Systems handbook for six years.