Leveraging the right tools makes the difference

Running a small to medium-sized machine shop business presents many challenges. Alliance Broach & Tool, East China, Mich., has been in the business of building its operations and client base for more than 35 years; the company knows about some of these challenges. In spite of a tough economic climate, however, Alliance continues to significantly grow. After nearly 40 years, that is an impressive accomplishment.

“My father always said that if we were not growing the business we were on our way to being out of business” said company president, Mike Johnson. The company is still run by one of the founders, Helen Johnson, together with her son Mike Johnson. Alliance Broach and Tool do highly customized broach manufacturing and reworking for a full range of industries from agriculture to aerospace, from automotive to medical and from marine to heavy equipment.

They have continuously expanded their operations and offerings to include highly specialized broaches of all types and specifications including custom spirex broaches and splines up to 84 inches. “We are like custom cabinet makers,” said Mike Johnson, everything we do is completely custom and done to the exact specifications of our customers.

Working with hundreds of customers both domestically and internationally Alliance Broach & Tool runs a tight, just-in-time operation. They have also been able to build an international customer base; an important achievement for a smaller firm.

One of the tools that they have leveraged to both manage this growth and their costs is ERP (Enterprise Resource Planning) software from REALTRAC. This one tool often saves companies, even small firms more money than any tool on their shop floor. ERP software allows even small firms to effectively manage their operations by providing up-to-date information at all times for quoting, costing, and managing projects as the move through an operation.

Many small shops believe that using a program like REALTRAC should be delayed until they are larger. By doing so, they can miss a significant cost savings. Alliance's experience validates this, founder Helen Johnson commented, “We had a pretty quick return, the improvement in our job planning, cost analysis and floor operations meant that within a matter of months the software paid for itself."

Alliance Broach & Tool’s President Mike Johnson will tell you, that the time and money saved by effectively using ERP software has made a huge difference in their profitability. “The saved history in our system helps us develop quotes more quickly and more accurately, and if I want to know the status of any item on the shop floor, that information is just a few clicks away,” he said. He estimates that over the years they would have had to add several additional administrative people to do the same sorts of tracking and management that their REALTRAC ERP software provides. “I know about a project, especially if there is a problem, before anyone from the shop floor comes to my office to talk to me about it. Even better,” he added “Once we make an adjustment or resolve a problem it is documented and we don’t have to revisit it later.”

This type of efficiency is what shops of any size need to stay competitive and keep their business growing. In an increasingly global marketplace, efficiency matters in any size operation. Systems and software that increase your productivity help you remain competitive.

As any small business owner, and especially the owners of a busy machine shop know, running a smooth operation with tight scheduling and minimum inventory levels is absolutely vital to staying profitable and in some cases, staying in business. Shops often rely on two or three individuals just to manage the operations. Good ERP software means that businesses can operate with less administrative headcount allowing them to hire more productive floor headcount. A strong ERP system tracks the entire job and coordinates the work flow for all current projects and provides instant visibility to the entire team on the floor and in the front offices. It is both the reduction in head count and the ability to optimize work flows that allow ERP systems to pay for themselves within a few months. REALTRAC can be run and leveraged by the entire team. No one individual has to be specially trained to run the system; generating smoother operations and additional cost savings.

With a few simple key strokes the documentation needed for nearly any type of audit or certification process can be completed. This regularly saves dozens of hours that can be focused on your business, rather than searching for and compiling documentation.

 “We’ve been using REALTRAC software since 1994 and I know it has saved us a ton of money” said Mike Johnson. Building efficiencies into every process means that even small and medium sized firms like Alliance Broaching & Tool get a fast return on the investment they make into an easy to use ERP package. No matter how small your firm is or how complicated, or streamlined, your operations are, you need to evaluate ERP software. It is no longer something that is just for big business or very sophisticated operations, it is for businesses that want to grow and stay in business.