Otis Technology goes lean with materials handling
Mobile robots, an AS/RS and supply chain software transformed this manufacturer’s processes.
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Conventional wisdom holds that robotics and automated materials handling systems are for the industry’s big guns, not for the little guys.
In the case of Otis Technology, conventional wisdom is wrong. A manufacturer of firearms cleaning systems in upstate New York, Otis Technology has installed three mobile robots (ADAM Robots) in a manufacturing and distribution facility that measures just 80,000 square feet.
The company began to install automation in 2008 with two primary purposes in mind. The first, and most important, was to enable Otis Technology’s implementation of lean manufacturing processes. The second was to further a philosophy that employees matter.
“In the history of the company, we have never laid off an employee,” says Mike York, director of operations. “To stay competitive, we are looking at automation to free up our employees for value-added tasks and to increase our throughput, not to reduce our workforce. We are proud to be American-made, American-owned and American-employed.”
But its automated materials handling wasn’t limited to mobile robots. Otis Technology has also installed a warehouse management system (WMS) and enterprise resource planning (ERP) system, automated data collection, a wireless voice over Internet protocol (VoIP) communications system, and a two-aisle automated storage and retrieval system (AS/RS). One aisle features 512 pallet positions for unit load storage while the other aisle includes 3,240 positions for mini-load storage.
Since going live, the results have been impressive:
On-time deliveries increased from 85% to 99.92%.
Otis Technology has saved $2 million in inventory.
York estimates the mobile robots are saving the company 94.2 hours a day in time employees used to spend walking back and forth in the operation. That’s roughly 1 hour per day per employee.
Going back to a philosophy that employees are integral to the company’s success, some of that savings has been reinvested into employee training in lean techniques that will yield more improvements in the future.
Growing a business
Otis Technology is unique in a number of ways beyond being a small company committed to lean and automation.
For one, the 26-year-old company is female-owned and operated. Doreen Garrett, founder and CEO, was just 16 when a bullet jammed in her rifle after she tripped over a stick in the woods during a hunt with family members in rural New York. After walking 2 miles back to their hunting camp, she cleared her gun with a weight and some string she found in her grandfather’s kit. The experience gave her the idea for a field kit to clean a gun’s muzzle.
After getting tossed from the first gun show where she showed off her prototype because she was under 18, Garrett went back to the show wearing makeup and high heels and came away with orders from the military. Her father helped her establish the company, since she was not only a kid but a young woman in a male-dominated industry. Today, Garrett’s siblings are also involved in the business.
Early orders were produced at the family’s kitchen table and then a horse barn. In 1996, the company moved into its current offices, and in 2004 it broke ground on the manufacturing plant where the product is assembled. In 2006, the company added an on-site day care center to help employees.
While Otis Technology does not release sales information, it is now the largest employer in its part of the county. Still, it has maintained a family-owned culture with a commitment to the local economy. “Our area needs jobs,” says York, “and we think we have an important role to play in our area.”
Otis Technology is unique in another respect: While many manufacturers outsource some or all of their production processes, Otis Technology remains a vertically integrated company, with some 31 work centers on the floor. “We produce 90% of what we kit,” says York. “As a result, we have multiple work centers going into work-in-process, followed by work-in-process going to other work centers.”
The seeds leading to lean manufacturing were planted in 2008, when the company added 22,000 square feet for the unit and mini-load AS/RS. Prior to that, raw materials, work-in-process and finished goods were stored on the floor in the manufacturing area, in traditional warehouse racking or in an off-site warehouse. It was not only inefficient, it was costly. “We had no room to expand,” says York. “And every time we moved materials, we were paying a fee to a 3PL.”
Conveyor was in place to transport product throughout the facility. That, however, created challenges when it came to changing processes. “If we wanted to change something, you had to go around a conveyor because you couldn’t go through it,” says York. “We started asking if there wasn’t a way to move material more efficiently.”
In 2009, a group of Otis Technology’s manufacturing operations employees attended a White Belt class in lean manufacturing. During those sessions, the team examined the non-value-added steps and wastes in their processes, including the amount of time associates spent walking to get materials. That led to discussions about changing the layout of the plant to set up processes closer to one another to improve the flow through the facility. “We realized that wasn’t possible given the configuration of our facility,” says York. And, adding more conveyor wasn’t economically feasible.
While these discussions were happening, an Otis Technology executive discovered a system on the Web for mobile robots that could transport totes, containers and other items. What caught his attention was the laser-based guidance system used to direct the mobile robots. “Most robotic systems or automatic guided vehicles run on a rail or require you to put something on the floor,” says York. “We did not want to do that. With this system, no markers are required on the floor. We decided that would suit our facility.”
The question was whether the system could deliver enough return to justify the investment. Doing the math, they calculated a savings of more than an hour per day per employee in travel time that would now be available for value-added processes or future growth. That was sufficient to justify the investment.
Going live with robotics
Mobile robotics was also an ideal technology for Otis Technology’s new lean manufacturing strategy. In the old strategy, all of the materials for a day’s production were stored in a work center. Associates would retrieve the material they needed as they needed it. Keeping track of inventory in that system was difficult and it led to a lot of work. One solution was to allocate no more than one hour’s worth of production materials to a work center at any given time. Changeovers were easier, but that approach still required a lot of walking.
As the team did the value-stream mapping associated with lean, all that walking emerged as a significant waste. That’s where the mobile robots came into play. The machines operate like small automatic guided vehicles, shuttling containers and totes rather than pallets through the facility. That would eliminate the walking. What’s more, they could be easily reprogrammed if products, processes or a layout changed.
After performing due diligence, Otis Technology executives ordered three mobile robots. The implementation and training took about a week.
The primary function of the robots is to deliver kanban totes and containers from the AS/RS to work centers in the manufacturing area. In that capacity, when an item runs out in a work center, an associate on the line presses a call button for a mobile robot. When the robot arrives, the empty container, any waste cardboard and a kanban card are placed on one of the robots. The robot automatically delivers these back to the AS/RS system.
There, an associate scans a bar code on a kanban card. That signals the AS/RS to retrieve and deliver the replenishment items. Meanwhile, the robot gets an opportunity charge. Once the product is delivered to the operator, it’s loaded onto the mobile robot and delivered to a workstation.
In addition, the robots are also used to deliver work-in-process from work centers to the AS/RS for temporary storage; to deliver finished goods from the packing area to the AS/RS for temporary storage; or from the line or the AS/RS to the shipping area.
Employees have adapted well to working with robots. “When we come up with a new idea, we go through a change management process,” York says. “We explain the benefits, explain how we’re going to use it and we repeat that several times. There’s a level of employee trust so that we don’t have pushback.”
The biggest accommodation has been to add audio to the robots so that employees hear them coming. “The audio system plays music, and we allow the employees to request what we play so long as it’s appropriate,” York says.
Along with improved inventory accuracy and productivity, York says the most visible change may simply be that the facility is orderly. “If you look around, you’ll notice that there’s no inventory sitting in the aisles and only the supervisors are walking,” he says. “Our employees are all involved in value-added services.”
Down the road, he adds, if products or processes change, there is an infrastructure in place to adapt. “All I’ll have to do is add another robot,” he says. “I have flexibility that I didn’t have before.”
About the AuthorBob Trebilcock Bob Trebilcock, editorial director, has covered materials handling, technology, logistics and supply chain topics for nearly 30 years. In addition to Supply Chain Management Review, he is also Executive Editor of Modern Materials Handling. A graduate of Bowling Green State University, Trebilcock lives in Keene, NH. He can be reached at 603-357-0484.
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