Innovation and The Future of Inventory Management

Innovation and The Future of Inventory Management

Innovation springs from small and new companies, so holds Andrew Johnson, CEO of ShelfAware, a software startup in the what could be called the MRO commodity business. His family business, Oringsales.com, is a master distributor of those crucial but often overlooked components called O-rings. Suppliers to maintenance shops and OEMs have been tackling vendor managed inventory and other inventory tracking processes for many years. But how do you economically track something as small as an O-ring?

The brothers running the distributorship business figured out that RFID tags were becoming inexpensive enough to warrant use in small bags of these small components. They wrote an application, embedded RFID tags on the bags, and established a workflow. Originally for their customers of O-rings, customers soon demanded the system for other small components, as well.

The key proposition—remotely monitor consumption of small parts. He calls it get “the dudes in trucks” off the streets to better utilize their time rather than driving around counting parts.

Johnson is entrepreneurial and evangelistic. He told me, ”I’m reaching out to you because I have a message I would like to send to our USA manufacturing friends that I think they would find very interesting. The time is now to innovate our manufacturing infrastructure if we intend on bringing manufacturing back to the USA in a big way. Its easier than ever before to take the tech leap with many Internet of Things systems popping up every month that don’t require integration into your ERP systems to achieve a big ROI. It’s literally plug and play technology for manufactures.

This is his innovation story.

I am a young entrepreneur (32) that has grown up in the industrial manufacturing industry as a member of a family run industrial parts distributor. I spent many summers of my childhood inspecting o-rings, gaskets, and other seals… very exciting summer job. Now I am working with my 3 brothers in our family business as we try to innovate the industrial landscape. We recently invented & patented an intelligent inventory supply chain that is powered by passive RFID technology. We deployed our Internet of Things supply chain system at 3 Midwestern manufactures last year (Eskridge Mfg, Energy Mfg, Oilgear Mfg) and the system is performing better than we could have ever imagined.

Very simply put, our system, ShelfAware, monitors the consumption of commodity inventory in real time using RFID chips that are embedded into the product packaging. This consumption data, Big Data, is then analyzed and fed to the manufacturer’s supply chain partners to guarantee no stock out, lean inventory, and lean inventory pipe-lines which all means the right parts, at the right time, cheaper. Our three key questions we practically chant while working with our system are: Is this Accurate?, Efficient?, Effective?

Yes, RFID inventory systems have been around for years, but never really applied to the consumable commodity products, aka “small parts”. The main tech advancements that have made a system such as ShelfAware viable now are:

  • RFID tags are getting really really cheap, sometimes less than $0.05 each
  • The internet has allowed the software driving the system to be flexible and easily accessible
  • RFID hardware is much less expensive and now highly reliable

The business plan, a bit audacious, announces “The Opportunity to Disrupt a Marketplace with a Collaborative Platform”.

The traditional large industrial supply incumbents who offer vendor managed inventories (VMI) have expanded their product offering horizontally leaving them spread too thin. They are good at some product groups, but great at very few product groups. This has created vulnerabilities related to product expertise like sourcing, engineering, and general product support. ShelfAware intends on exploiting these vulnerabilities by giving many niche product vendors the ability to collaborate on ShelfAware’s IoT Inventory Platform thus creating a more efficient crowd sourced inventory supply chain.

Objective of ShelfAware as a company states “To create an IoT Intelligent Inventory Platform that can support multiple independent product vendors who collectively support large supply chains demanded by Large or complex OEM’s. ShelfAware will create value in the industrial supply market by revolutionizing supply chain theory through the use of a collaborative IoT, RFID Intelligent Inventory Platform.

The Platform must fulfil two primary roles for this supply chain model to be successful with emphasis placed on the IoT vendor collaboration software.

  • Deploy an intelligent inventory management system inside manufacturing facilities.
  • Deploy a Vendor Side supply chain cooperative system.

I am intrigued by the whole concept. And it seems to be working now, even in its infancy.

Affordable MES For SMBs

Affordable MES For SMBs

Can only large companies with plenty of funds afford an MES? Are small and medium sized manufacturers destined to be stuck in the complexity of Microsoft Excel for ever?

MES can be quite an involved undertaking for a large company. Engineers and IT professionals must rationalize operations bringing intellectual coherence to them. Transactions must be defined and understood. Existing applications must be sorted through and organized. Even for a smaller company it takes a lot of work. Some companies seem to strive for complexity in applications.

New products, especially that follow some of the trends of affordability and ease-of-use, interest me.

I was recently approached by a technologist from Estonia who had heard my podcasts and figured I’d be interested in his company’s new product—Katana MRP. [Note: the term takes me back to my early years in IT software installing MRP II. I didn’t ask about the name. But translations into English sometimes get interesting.]

Katana MRP is a manufacturing and inventory management software for small and medium sized manufacturers. The software is cloud and subscription based. Affordable for even the smallest makers/manufacturers (Plans starting from $39/mo. The main value stands in the simplicity of use.

Among the benefits to the manufacturer include better stock level optimizations and manufacturing planning leading to less time spent on operations and more time to product development or selling/marketing.

My contact, Oliver Vesi, told me, “The feedback from over 500 users shows that a lot of the value stands in the easy-to-grasp interface that makes the state of your stock and manufacturing perfectly clear. The second best outlined value is integrations. Katana MRP integrates with the most used accounting and e-commerce platforms, so the sales data and stock needs run in and out automatically.”

Following is a list of main features.

MANUFACTURING

Manufacturing grid. Track the status of each manufacturing order from material planning to production execution. Complete overview of your production pipeline.

Material availability. Have control over the availability of materials required for fulfilling each manufacturing order. Take necessary action by purchasing more materials or changing the priority of orders.

Production planning. Set priorities of orders and manage tasks for your shop floor personnel.

SALES & PURCHASING

Sales grid. Track the status of each sales order from order creation to delivery. Manage material availability for each order and conveniently create required manufacturing orders. Get a complete overview of your sales order fulfillment pipeline.

Manage sales and purchase orders. Each order can be edited to include information on customer or supplier, items, quantities, sales or purchase prices, tax levels etc. All your sales and purchase orders are accessible from one place.

WAREHOUSE

Automatic inventory management. Your inventory levels update automatically based on your sales, purchasing and manufacturing activities. Calculate costs using moving-average-cost reflecting all purchase and manufacturing related expenses.

Real-time inventory control. Make inventory decisions based on the quantity of products and materials you have available for sales or manufacturing. Control in hand, committed, and expected stock amounts in real time.

Stock level optimization. Set an optimal reorder point for each product and material. Make procurement or manufacturing decisions based on optimal stock level calculations.

PORTFOLIO

Product and material cards. Each product and material can be edited to include information on category, product code, variants, reorder point etc. All your portfolio items are accessible from one place.

Variants. Each product and material can include variants such as colour, size or material. Manage a wide portfolio effectively via variants.

Production recipe (bill-of-materials). Keep track of costs and quantities of all your materials required for assembling a product.

Production operations (routing). Specify the steps that are used to manufacture a product. Calculate costs related to production labour.

A New Take On ICS Cybersecurity

A New Take On ICS Cybersecurity

cybersecurityIndustrial Control Systems (ICS) Cybersecurity risks have become so public that CEOs and Board members are sponsoring projects within their companies and raising visibility of the issue.

PAS Inc. CEO Eddie Habibi and General Manager of Cybersecurity and CMO David Zahn shared that news with me during a conversation this week regarding the release of a new version of PAS Cyber Integrity (5.0).

They further pointed out that this high-level visibility serves to push the long-promised IT/OT integration and cooperation into more meaningful relationships.

A final point concerned approaches to ICS cybersecurity. Most companies and consultants focus on the networking access side of the equation. PAS also looks at such automation assets as patch management, inventory management, and workflow.

The latest release of Cyber Integrity boasts enhanced support for workflows and security policies, automating a closed-loop patch management process, and provides enhanced dashboard capabilities. Says the company’s press release, “Cyber Integrity helps companies better mitigate operational risk from malicious attacks or inadvertent control system changes through automated inventory management, patch management, change management, and backup and recovery.”

“Patch management for today’s control systems lack critical capabilities required to help industrial organizations meet cybersecurity best practices and regulatory standards,” says Peter Reynolds, Senior Analyst at ARC Advisory Group. “Among other issues, plants often have poor visibility into which assets require patching; lack integrated processes that drive testing, implementation, or mitigation; and cannot easily access auditable evidence of a patch management process. ARC supports the development of solutions such as PAS Cyber Integrity that are designed to address these types of patch management issues in mission-critical industrial environments.”

Cyber Integrity works across the heterogeneous control environment found in plants providing enterprise scalability and performance. It enables industrial companies to:

  • Gather and maintain an accurate inventory of IT and OT cyber assets,
  • Automate patch processes throughout the enterprise,
  • Monitor for unauthorized change to cyber asset configurations, and
  • Implement a program for system backup and recovery.

The latest release also includes an entirely new dashboard that makes it easier for end users to process actionable information, as well as for management to quickly understand the state of ICS cybersecurity.

“The great contradiction within ICS cybersecurity is that the assets most valuable to plant operations and safety are often the most vulnerable,” says David Zahn, Chief Marketing Officer and General Manager of the Cybersecurity Business Unit at PAS. “Inventory management and change management are essential components of a cybersecurity strategy that address this contradiction. By offering patch management within Cyber Integrity, we now provide cybersecurity and operations professionals the ability to identify, address, and audit a process that had traditionally fallen short. Along with our new dashboard, workflow, and policy capabilities, companies have everything they need to harden ICS cybersecurity and streamline compliance efforts.”

Further information can be found on the PAS blog:

“Is Your House In Order?”

“The Risk of Not Knowing”

“What Happens When You Get That Call?”