This year, we are proud to be back in person for the fifth annual Manufacturing Education Day on October 29, 2021. As the year comes to an end Rea & Associates is thrilled to bring together top industry experts to support the ongoing success of the manufacturing industry.
Whether you manufacture pallets, pivoted your core products, or are looking for great insight, register today to ensure you don’t miss this essential event!
4. Unemployment Statistics
Among the state’s 88 counties, preliminary September 2021
unemployment rates ranged from a low of 2.6% in Holmes County to a
high of 7.7% in Pike County.
From August, unemployment rates decreased in 82 counties and
increased in six counties. The comparable unemployment rate for Ohio
was 4.6% in September.
• Tuscarawas County: 4%
• Wayne County: 3.4%
• Stark County: 4.8%
• Franklin County: 4.5%
5. Recruitment
Employer of Choice
• How to ensure job postings include key job duties, qualifications, benefits, and
highlight employer as “Employer of Choice”.
• 90% of all organizations in the US are hiring. What does that mean?
• Strategic Recruitment Planning
• Outline of existing recruitment practices
• What strategic pieces are missing
• Job Descriptions
6. Recruitment
Talent Resources
• Local trade schools
• Internship Programs
• Apprentice Programs
Employee Referral Incentives
• Consider employee referral program
• Types & Benefits
New Hire Sign On Bonus
• Benefits & Considerations
• Scenarios
7. Employee Retention
Competitive Compensation & Benefit Packages
• Are your company wages competitive for the area?
• Consider external wage and benefit compensation survey
• Key – tenured worker compensation – Review to ensure no gaps
Employee Communication
• Ensure timely & consistent communication with employees
• Performance Feedback – all employees should know how they are
performing.
• How does their job impact the organization? Show importance of each role.
• Studies show employees longevity with company increases when consistent feedback is
provided.
8. Employee Retention
How are your employees feeling? Do you have a pulse on
your workforce?
What keeps your employees at your organization?
• Benefits? Culture? Pay?
• What could be improved?
Employee Surveys
• Simple, anonymous, administered by third party
• Feedback and summary provided to help business owners
• Ability to move funds in support of programs your employees need or utilize
10. Employee Handbook - Policies
Attendance
Paid Time Off – definition of utilizing in conjunction with leaves
Leave of Absences - FMLA
Remote & Hybrid Work Policies
Department of Labor
• Payroll
• Overtime
Workplace Violence – Safety
11. Employee Handbook
Department of Labor
• Payroll Procedures & Definitions
• Overtime
• Pay Classifications
• Exempt – Nonexempt
Workplace Violence – Safety
ADA
12. I-9 Compliance
Employers must have an I-9 on file for every active employee hired after
November 6, 1986.
Employers must have an I-9 on file for terminated employees for three
years following date of hire or one year following date of termination—
whichever is later.
Average fines
• Penalties can include $250 to $3,000 for improper completion of the I-9 form.
• Improper completion, retention or making it available for inspection fines range from
$100 to $1,100 for each I-9.
• Knowingly hiring or continuing to employ unauthorized workers fines range
from $250 up to $11,000 per violation.
13. HR Workplace Trends
Covid & Workplace
• Vaccination Policies
• Leave of Absence Policies
HR Compliance – Heightened Awareness
• Increase in employee lawsuits
• Age Discrimination
• Harassment
• ADA
17. Components of Costs
Materials
• Include
freight in
• Consider
scrap
Labor
• All personnel
cost
associated
with
production
employees
• Includes
fringes,
payroll taxes
Overhead
• All other
costs
incurred to
manufacture
and sell the
product
• Rent, utilities,
depreciation,
repairs &
maintenance
Distribution
• Costs
required to
move your
product to
your
customers
• Freight out,
shipping
labor
18. Fixed vs. Variable Costs
Costs that are consistent despite
the change in activity
Depreciation, management and
administrative wages, rent,
advertising
Costs that fluctuate with the
increase or decrease in activity
Direct labor, materials, utilities,
repairs and maintenance, supplies
Fixed Costs Variable Costs
Why are they important? Understanding your variable and fixed costs
are crucial in evaluating your break-even point
Many costs share qualities of both variable and fixed costs
19. Direct vs. Indirect Costs
Costs traced directly to the
product
• materials, direct labor,
manufacturing supplies
Do not have a direct
relationship to the product,
therefore it is difficult to know
how much should be
assigned to each product
• Management/administrative
wages, insurance, depreciation
Direct Costs Indirect Costs
20. Assigning Costs
Once you understand the components of your costs, you can further assign your
costs across departments/products
• break your costs into one of the four components (materials, labor, overhead, and
distribution)
Costs that are shared across multiple departments/products need allocated
• Use actuals costs when applicable, otherwise allocate
• Allocation methods could be based on a percentage of sales, square footage, labor hours, etc.
You can further develop labor and overhead rates to assign a portion of your
labor and overhead expenses to your products
• Determine cost drivers
• Understand your throughput as it relates to those cost drivers
• What is the main driver of your process?
• Direct labor hours, machine hours, the number of customer contracts, etc.
22. Labor Shortages
Wages are increasing to attract and retain
employees right now. Are the increases in wages
being accounted for in your costs?
Evaluate if it is time to automate certain
processes and invest in technology
Are you running more overtime to combat the
open positions? If so have you updated your
costing assumptions to reflect the additional
overtime?
Labor
Shortages
23. Rising Material Costs
Material costs have increased with supply chain
disruptions
Are you accounting for the increase in material
costs when pricing your product?
• How are you addressing long lead times to both receive
raw materials but also complete orders and ship?
If you are not increasing prices and passing the
increase to your customers are you cutting costs
elsewhere to maintain your margins?
Rising Material
Costs
24. Supply Chain Disruptions
Not only are material prices are increasing,
materials are also taking longer to arrive
Are you currently struggling to keep up with
demand?
• How are you evaluating which jobs to pursue?
• Consider using gross margin per hour as a metric to
evaluate
Evaluating your current ERP
system/implementing an ERP system to optimize
supply chain costs
Supply Chain
Disruptions
25. Pricing
Understanding your costs and correctly assigning costs to your products
helps you understand what options you have when it comes to pricing
• Need to make sure all costs are covered and where those are factored into your
pricing model
Questions to think about
• What margins do I want to maintain?
• What is the industry standard?
• What is my capacity?
• Should I offer volume discounts?
• How will the customer receive the price increase?
In the current state, consumers are almost trained to expect price
increases
• Do not be afraid to increase prices and maintain your margins
26. Common Costing
Pitfalls
Inaccurate books and records
• Garbage in, Garbage out!
Broad application of assumptions
• Not checking those assumptions
Not updating assumptions over time
• Everything changes over time
• Avoid just saying SALY!
• 5.9% COLA increase for 2022
Using % of materials for allocating overhead
Not considering “non-productive” hours
• Efficiency %
27. Common Costing
Pitfalls (cont.)
Improper assignment of costs to products or product
lines
• Outdated assumptions
• Incorrect cost drivers
• Allocation vs. Actual
Potential Consequences
• Improper pricing
• Improper allocation of resources
• Products and product lines can appear more profitable than they
really are
• Incorrect business decisions are made
28. Benefits to Understanding and
Allocating Costs to Your Products
Accurate financial reporting
• Garbage in – garbage out
Useful information to help you make sound business decisions
• Whether or not you accept a new order, whether to enter into a new market, whether
or not you expand or remove a product line, etc.
Knowing the profitability of each department or function and
understanding your product mix
Being able to better explain to customers the costs that go into the pricing
of your product
Understanding costs at each stage of the production process and the
impact on profit and loss
Appropriately distributing resources
29. Where to Start?
Monitor your current processes
Update your assumptions as necessary
Understand the expenses on your P&L
Evaluate cost drivers and allocation methods
Understand what data you already have readily available and what data
you would like to have so you can start tracking
36. Ability to make current staff more
efficient so talents are used elsewhere
Reviewers have access to view
invoices, payments, and more in an
easy to use online environment
Access from anywhere with an
internet browser
Electronic document storage
Multiple user settings to allow proper
access to proper individuals
37. Inventory Solutions
Add more capabilities to
track inventory
Allow manufacturers to
create assembly items
Packing slip creation
40. Full Conversion
Step 1: Identify if your Desktop file is a good candidate for a full
conversion
Step 2: Identify what information may need to be manually entered into
new file
Step 3: Convert from Desktop to Online – All of your historical information
comes along
41. Limited Conversion
Step 1: Export lists from Desktop to Online
Step 2: Enter beginning balances and open invoices/bills
43. Bank Feeds
Client’s Bank
QBO Bank
Feeds
Bank
Reconciliation
General
Ledger and
Financial
Reports
Direct connection
between your bank and
your QBO File
Allows you to take 1 of
3 actions: Add, Match or
Exclude
Ensures all information
is captured for accurate
reporting and easy bank
reconciliation
44. Reporting
Standard Reports
• Boiler plate templates for your basic
financial reports and lists
Custom Reports
• Creation of a new report using the
columns, layouts and data that work for
your needs
Add on applications
• Fathom, Qvinci and other third party
applications that allow enhanced
reporting such as KPI’s, Dashboards,
Consolidations and more
Easy delivery and exporting
• Exportable to PDF or Excel for additional
customization
• Ability to email
57. Hodd Harvey
• Sales Engineer for Ohio
• 14 years of industry experience with Edward B. Mueller
/ STILES Machinery
• YOUR PARTNER for AUTOMATION
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Introduction
YOUR SPEAKER
58. I help business partners that are frustrated in our current business environment with limited
employees, overwhelmed with too much potential business with no capacity to manufacture
while maintaining favorable margins.
I’m going to show you different levels of automation along with different ways of justifying
capital investments with automation.
Introduction
Opening Statement
59. Introduction
HOMAG GROUP & STILES Machinery
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61. Introduction
HOMAG group
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14
production sites
worldwide
1.2
b€ sales revenue
achieved worldwide
60
exclusive
sales partners
worldwide
6,500
employees around
the world
23
sales and service
companies worldwide
62. Introduction
STILES
PHONE SUPPORT
10 customer service representatives
55,000 orders filled annually
100,000 plus customer inquiries
SHIPPING AND RECEIVING
6 full time personnel
42 shipping methods to fit your schedule
1,700 LTL shipments
99% same day ship rate
PURCHASING AND INVENTORY
94.8% first pass fill rate
$64 plus million on hand inventory
34,000 plus SKUs in stock
15,000 purchase orders created
1,600 unique suppliers
Parts available to ship next day air 8:00am delivery
EDUCATION
Stiles University 60k students
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64. HOMAG ONE:
Power touch interface
One interface for all machines
Introduction
HOMAG ONE
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65. Automation
State of the Industry
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66. Automation
State of the Industry
Automation of Machining:
Example:
Intellistore (Automatic storage and retrieval
system for sheet goods)
Feeding a CNC with boards
67. Why is Automation more
important than ever:
Labor shortage
Employee retainment
Skilled labor shortage
Simplification of processing
Economical situation All
products to be produced
can be sold, more output –
more revenue
Automation
State of the Industry
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68. Automation of Machining:
Example:
Hybrid Saw with manual
work mode and automatic
work mode
Storage and Retrieval
systems
Feeding machines
Automation
State of the Industry
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69. Automation of Machining:
Example:
Drilling cell with robotic
feeding and destacking
Automation
State of the Industry
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70. Automation of Material
Transport:
Continous lines
AGVs
TFL
Automation
State of the Industry
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71. Automation of Machining:
Example:
Part sorting
Automation
State of the Industry
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73. Automation of Machining:
Example:
Drilling machines with
additional automation
11 machine options
2 options are ready for
more automation…
Automation
Roadmap Towards More Automation
Partially automated
Suitable for automation
Not suitable for automation
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74. Planning:
Think ahead
Think automated
Think scalable
Think Big, Start Small,
Scale Fast
Automation
Roadmap Towards More Automation
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76. Support for your success.
Stiles Machinery Inc
3965 44th St. SE
Grand Rapids, MI 49512
www.stilesmachinery.com
616-698-7500
Hodd Harvey
Hodd.harvey@muellerco.com
77. Support for your success.
Stiles Machinery Inc
3965 44th St. SE
Grand Rapids, MI 49512
www.stilesmachinery.com
616-698-7500