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November 2016 • SMT Magazine 43 SMART FOR SMART'S SAKE, PART 2: MATERIAL MANAGEMENT work for materials operators. A computer sys- tem is needed to manage the database of ma- terials and their locations, which most often is not practically supported within ERP. The ma- terials-management functions in the manufac- turing execution system (MES) can provide sup- porting warehouse management or even can be the dedicated warehouse management software. The use of material carousels creates au- tomated and managed storage locations that are efficient on space. These still require read- ing the material barcodes into the storage, but at least the need to remember the locations is avoided. The units, where big enough, can ex- ist as a named warehouse as far as ERP is con- cerned. The limitation with the use of carou- sels is the time that it takes to get materials into and out of the carousel, which often becomes a bottleneck for the operation. However, another benefit of some carousels is that they offer a dry environment for materials, so that baking and separation of moisture-sensitive materials into dry-store locations is unnecessary. Automated carousels cannot be used for all materials, how- ever, especially the larger assembly items and so, in practice, the carousel system in almost all cases has to coexist within a larger overall mate- rial management system. The first part then of our smart solution is to manage material locations, potentially in mul- tiple warehouses, ensuring that no materials are lost, that good use is made of space, and that materials logistics are managed efficiently. As well as coming into the warehouse, ma- terials also have to leave the warehouse to be used in production. The old-school method of doing this is to prepare a kit of materials well in advance of the product changeover on the line. Preparing material kits has two challeng- es. The first is to locate the materials, which our "smart" warehouse location system should solve, but the other issue is that there are of- ten not enough materials available. This can be caused by the oversupply of materials to the shop-floor in other kits, as well as the materi- al spoilage, or attrition of material, accumulat- ed over time, for which the additional buffer stocks have been exhausted. Because this is a frequent occurrence, with a serious effect on production, preparing kits well in advance is a common practice. Often, in higher mix environments, an entire line of material kits will be prepared in advance for each line. The cost of this legacy practice is ri- diculously high; for example, the investment in excess material buffer stock, the stock held in queued kits, the workload to create and main- tain multiple kits (because often materials are requisitioned from one kit to another), the space required to store the kits, and the need to tear down and remake the kits should there be a short-term change in the schedule. All of these costs are a burden to the oper- ation simply because accurate material inven- tories cannot be maintained and updated in ERP. If they could be accurate, then the ma- jority of the needless buffer stock could be re- moved, with materials being prepared only as needed for immediate use on the production lines. Here is the opportunity to again use our "smart data" from the factory machines and processes. The smart, or "Lean," approach to materi- al management is a simple concept. Collect- ing accurate material usage and consumption data from the machines and processes means that Lean material-management software can, with the help of the bill of materials and sched- ule data, calculate the rate at which materi- als are being used. They also can predict when new materials are needed, either as replenish- ment of existing reels in use or as part of a prod- uct changeover. Delivering materials on a Lean "just-in-time" basis reduces the amount of ma- terial WIP needlessly stored on the shop-floor by more than 95%. " All of these costs are a burden to the operation simply because accurate material inventories cannot be maintained and updated in ERP. "