Case Study: American Tube Manufacturing
American Tube Manufacturing utilizes WiSys WMS and WiSys Production Order Work Center Reporting to deliver an even higher level of customer service while increasing their confidence in inventory quantities and cost.
American Tube Manufacturing, Inc. located in Birmingham, Alabama is a mid‐sized steel company that manufactures and sells mechanical and structural square, rectangular and round tube in dimensions ranging from 0.5” to 4.0” and from 16 gauge to 4 gauge (1/4” wall) and in lengths from 1” to 60’. They distribute their products in the Southeastern United States, the Atlantic coast, Texas, Oklahoma and Missouri. American Tube’s products are used in the automotive industry, for packaging and conveyor systems, in fencing and railing and a host of other applications. American Tube prides itself on working with each customer and “using every available resource possible to continue to build customer satisfaction and loyalty.”
There is such a high commitment to customer service at American Tube that, at a customer’s request, orders will be shipped with less than a 24 hour turn‐around time. As American Tube has grown, meeting this type of commitment has been difficult given their manufacturing process. The production process involves raw coiled steel being fed into a steel rolling mill. The rolling mill “bends” the steel into a circular tube, at which point the tube is welded into a continuous circle of steel. After the round tube is formed, it can be shaped into square or rectangular tube or left as circular depending on the customer’s requirements. A very critical piece of information to any steel manufacturing business is the Heat Number associated with the raw steel. The Heat Number is assigned at the steel mill of origin and links the physical steel products back to certain attributes associated with its chemistry (known as the “chems”). In addition to these chemical attributes, after American Tube manufacturers the finished products they run tests to determine physical attributes of the tube, which will be added to the profile information and made available to the customers that purchase a specific Heat Number.
“Prior to implementing WiSys in June of 2008, it wasn’t uncommon for us to have a 24 hour delay to update our inventory system,” explains Tommy Brady, American Tube’s Chief Financial Officer. “We would have raw material in the shop, but our production department was waiting for the material because Macola wasn’t updated yet. Now, WiSys updates our inventory data in real‐time so within minutes of receiving raw materials, everyone is aware and the production department knows they can proceed. Within minutes of production completing a particular type of tube, the shipping department is updated and can begin to fulfill orders. It is a tremendous improvement.”
Moving to a real‐time ERP is not the only improvement that Tommy and his team have noticed. Prior to implementing WiSys, American Tube only tracked inventory at the Heat Number level for a particular product. With the added efficiencies of WiSys and the automated ability to capture information throughout the plant, American Tube now tracks all the way to the bundle level. This adds up to two major improvements on the floor at American Tube, according to Tommy. “Because our inventory accuracy has improved from 95% to over 99.9%, we know precisely where a particular item is in the plant and the chems and physical properties associated with that product. When a customer orders steel tube that must meet certain specifications, our customer service representatives can quickly locate that product in our ERP system,” he explains. “Armed with that information, our shipping staff can quickly find, pick and build the shipments. We have leveraged WiSys to help us deliver what our customers want, faster than our competition and with great confidence that we are getting the order right the first time.”
In addition to the customer service improvements that WiSys has helped to facilitate at American Tube, one of the most dramatic improvements is a collaborative effort between WiSys and American Tube. “American Tube noticed some major fluctuations in their inventory costs and we started evaluating this issue with them,” notes Bruce Hollinger, President of WiSys. “American Tube runs the POP Module of Macola and they were backflushing components when reporting production and this created an issue with finished goods costing as raw materials cost and quantities fluctuated. We listened to American Tube and incorporated their feedback into our POP+ product. Now a standard feature of our POP+ module allows a customer to issue the actual raw materials to a POP job and do it in real time. American Tube uses our POP+ this way, drastically extending the functionality of Macola.”
American Tube is pleased with the results. “We have a very, very favorable experience with WiSys Our folks on the factory floor, in shipping and in the office all really like the products,” states Tommy Brady. “We look forward to continuing our partnership with WiSys and working to make American Tube a more productive company.”