Efficiency Partners Helps Active Industries Vault to National Prominence

Active Industries Grows Dramatically and Profitably with the Crescendo Manufacturing Software

With humble beginnings as a single facility fabricator of electrical insulation in upstate New York, Active Industries implemented EP's Crescendo software in 1990 as a first step toward rapid growth and industry prominence.

 

High Volume Job Shop Services Electrical Industry

Active produces customer-specific parts of various sizes and designs beginning with large rolls of insulating material such as Dupont's Mylar and Nomex.  The thickness of these types of materials ranges from .002" to .030".  The first step in the manufacturing process involves slitting master rolls down to appropriate widths.  The slitting process requires thoughtful materials management to minimize both labor time and material waste.  From slitting some parts move on to a "sheeter" which is essentially a giant paper cutter with thousands of pounds of force to cut through many layers of material at once in producing perfectly sized rectangular "blanks".  These blanks are then die-cut from a huge inventory of customer-owned dies. Active employs a wide range of different die cutting machinery to process parts of varying quantity, size, thickness and complexity.  In addition to the primary operations of slitting, sheeting and die-cutting, Active performs a variety of other specialized operations to meet their customers' requirements and produces and sells a number of standardized make-to-stock items as well.  Active must retain extensive item information and manufacturing histories as a large portion of the business is from repeat orders.

 

Crescendo Quoting Process and Formulas Cut Per-Quote Time to Five Minutes from Over an Hour

One of Active's first objectives for the Crescendo system was to simplify and automate its complex quoting process.  Even though they already had a computerized process, it involved a number of manual calculations.  As a result, customer service people spent an average of one hour preparing each quote.  With a dizzying array of unit of measure conversions, manufacturing process alternatives and quantity bracket pricing structures, the quoting process was not only time-consuming but subject to human error as well.  EP's implementation consultants worked with Active's manufacturing specialists to perform time studies and devise innovative multi-variable setup and run labor time and material usage formulas for each separate manufacturing process.  Armed with these formulas, Crescendo's flexible item master input screens presented the customer service person with a simple and logical set of questions required for each type of finished part, and automatically calculated estimates of material usage and waste, machine/labor setup and run time and final customer price.  In the end it produces a nicely formatted quotation form that was automatically faxed (then) or emailed (now) to the customer for approval.  The results?  Active's customer service people were now able to produce quotes in five minutes instead of an hour.  They were also able now to involve customer service reps having far less training, skill and experience than was previously required to produce quotes that were more accurate than before.  This gave Active the ability to expand its operations from a single location into seven locations nationwide and increase its revenues tenfold in seven years.  It was able to do this while improving its delivery times and increasing its profit margins.  To help keep these profit margins strong, Efficiency Partners implemented an automated price update system that updated the pricing on tens of thousands of customer parts, keeping profit margins intact, based on movement in raw material prices and notified customers accordingly.

 

Crescendo Helps Energize Active's Production Floor

Before Crescendo, Active's factory floor operators laboriously tabulated work order processing times by hand, and office personnel transcribed these figures to track job costs.  Because of the combining of multiple jobs at the slitting area, this process was subject to errors of apportionment in addition to natural errors and omissions associated with individuals manually estimating and tracking their own time.  This made it quite difficult to determine which jobs were profitable and which needed to be requoted prior to reorder.  Furthermore, in Active's environment, although raw material costs constituted a significant majority of total production costs, the actual cost of materials used in production on a given run was not being recorded by operators.  Instead, a complete physical inventory was performed each month to measure actual material costs and a true picture of job by job profitability was unavailable.   The manual shop floor tracking created yet another blind spot for customer service people who were trying to respond to order status requests from customers with tight schedules.  This created the need for CSR’s to make numerous trips out to the floor as well as the frequent jockeying of production schedules.  Both of these problems cut into overall efficiency. The Crescendo software implementation changed all this by plugging the factory operators directly into the system, ensuring precise job by job cost tracking and full-time office visibility.  Despite some initial apprehension regarding placing computer terminals in the hands of factory workers (which in 1990 was still a fairly novel concept), Active successfully decentralized factory data collection with the following results:




Active Expands Nationwide with Crescendo Business Management Tools

Active’s expansion into multiple production facilities was driven by the desire to reduce delivery times to customers in various parts of the country.  Crescendo’s software design helped this expansion to occur quickly and seamlessly for the management team located at Active’s Clifton Park headquarters.  Crescendo’s accounting system flexes to accommodate any organizational structure, allowing individual business units to remain operationally distinct, while at the same time furnishing important visibility to important non-secure information such as raw material inventories at other locations.  This structure also permits management to view profitability details for each business unit or to consolidated corporate results with equal dexterity.  Soon after initial system implementation, Active’s forward thinking CEO dreamed up, and EP consultants worked to create, a specialized weekly “super report” that delivered a tidy snapshot of business health and a summary of recent performance, including innovative exception reporting, allowing him to keep a finger on the pulse of the business.  Years before the popularization and commercial use of internet email, Active utilized a prototype email system developed by EP consultants to facilitate internal communications and deliver timely exception alerts in real time.

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