Blog – Left Coast Scales

Hostetler Scales and Industrial Controls – A Letter To Our Customers

Dear Valued Customers,

After half a lifetime of service, Gary Hostetler, owner and operator of Hostetler Scales and Industrial Controls, is turning over the ownership and day to day running of his company to Left Coast Scales, LLC. Both parties are thrilled with the change and look forward to fully incorporating Hostetler Scales into Left Coast Scales.

For the last 30 years Gary has focused on providing some of the best heavy capacity service in the Imperial Valley. Left Coast Scales is continuing this legacy by retaining the name of Hostetler Scales for our Imperial Valley operations.

So what does this mean for you?

First, Gary will be staying on with Left Coast Scales for the next year. We are excited to add his depth of knowledge to our team and feel confident that with his personal guidance we’ll be able to continue to provide the quality of service that you are used to getting from him.

Second, please be assured that your prices will not be immediately changing as a result of this merger. However, we would like to inform you that Left Coast Scales also provides service to scales of all weighing capacities. So if you have scales that Hostetler Scales and Industrial Controls has not serviced in the past we would be happy to meet with you and work out a quote for that extra service. This would allow you to have all your scale needs provided by a single company.

Other services we provide include:
• A 24 hour on call staff
• ISO 17025 Accreditation
• Weight calibration for any weights your business may own
• Non-weighing calibration:
◦ Metal Detectors and In Motion Check weighers
◦ Calipers and micrometers
◦ Thermometers and thermocouples
◦ Torque wrenches
◦ and Pressure gauges
• Training for your employees in proper scale handling and care
• And a friendly and knowledgeable staff with a passion for customer service

We have included an up-to-date contact sheet for your records. Please feel free to get in touch with us any time for all your scale needs. Thank you for your time. We look forward to serving you now and into the future!

Sincerely,
Corey Stacy
CEO Left Coast Scales, LLC.

Does AB5 Affect Your Customer Contracts?

This article is not intended as legal advice. AB5 has changed the landscape of employee/contractor relationships in California, and this is my attempt to help inform our customers and competitors of these changes.

California’s AB5 codifies the court’s decision regarding employees -vs- contractors in Dynamex Operations West, Inc. v. Superior Court. The court found that most workers are actually employees and can’t be classified as contractors. This decision seems fairly straight forward until you delve into the rules that were codified. The relationship between a contractor and the contracting business in a business to business relationship appears to be clear until looked at through this new law.

Like the Borrello ABC test that is used to determine whether an individual is an employee or can be treated as a contractor, the Business to Business relationship has to completely meet 12 separate requirements in order that the contracting business not be considered an employer of you or your employees. These requirements are listed below with comments and questions on what they can imply.

To make this dense subject easier to read and understand I will be using two companies as examples. Bob’s Scale Service is a weighing equipment service and repair company. Bob’s provides calibration services for other businesses. Ohm Electronics is a manufacturing firm that has scales that need to be calibrated by an independent company.

The rules for the B2B exemption: (Italics = excerpts from AB5)

The business service provider is free from the control and direction of the contracting business entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

Bob’s Scale Service wants to determine if their business is under control of Ohm Electronics, so they need to determine the following points. Are Bob’s employees performing work under the direct supervision of Ohm’s employees? Does Ohm’s require them to wear Ohm Electronics uniforms? How is the work billed? Does the employee submit time cards to Ohm Electronics? Are Bob’s employees using or operating equipment provided by Ohm’s?

The business service provider is providing services directly to the contracting business rather than to customers of the contracting business.

The work being done for Ohm Electronics, even if it is done at or for one of their customers, must be controlled by Ohm Electronics and not their customer.

The contract with the business service provider is in writing.

This is the easiest provision to understand, and in some cases the most difficult to enforce. All work done by Bob’s with Ohm Electronics must be in writing. Customers that want to work with Bob’s on an on demand basis will need to formalize the work in a written contract.

If the work is performed in a jurisdiction that requires the business service provider to have a business license or business tax registration, the business service provider has the required business license or business tax registration.

Ohm Electronics will need to ensure that Bob’s Scale Service holds all the necessary licenses and permits for the jurisdiction they are working in. This may require Bob’s to submit those items to Ohm Electronics.

The business service provider maintains a business location that is separate from the business or work location of the contracting business.

Bob’s Scale Service must have a different physical address than Ohm Electronics.

The business service provider is customarily engaged in an independently established business of the same nature as that involved in the work performed.

Bob’s Scale Service must be engaged in the type of work that Ohm Electroncs is hiring it for. For example: Bob’s would be performing calibration and maintenance on scales, and hiring them to clean the Ohm Electronics offices may cause an exception to the B2B exemption.

The business service provider actually contracts with other businesses to provide the same or similar services and maintains a clientele without restrictions from the hiring entity.

Bob’s Scale Service must actually be in the business of providing the service for which it is being engaged. To be considered a separate business Bob’s must maintain other clients.

The business service provider advertises and holds itself out to the public as available to provide the same or similar services.

Ohm Electronics needs to ensure that Bob’s Scale Service is a legitimate business that is offering its services to others. Marketing materials, business cards, logoed vehicles, and websites may be used to ensure compliance with this rule.

The business service provider provides its own tools, vehicles, and equipment to perform the services.

Bob’s Scale Service must provide the tools, and equipment necessary for providing the service for which they are being hired.

The business service provider can negotiate its own rates.

If Ohm Electronics sets the rate that it will accept for a service, they will have a difficult time satisfying the B2B requirement. In order to pass this requirement Ohm Electronics will need to show evidence that it has not set these service rates, but has solicited bids or offers.

Consistent with the nature of the work, the business service provider can set its own hours and location of work.

As written this may seem to imply that Ohm Electronics can’t set the hours that they are available. The intent of the rule however is to prevent Ohm Electronics from exercising control of Bob’s Scale Service – as noted above.

The business service provider is not performing the type of work for which a license from the Contractor’s State License Board is required, pursuant to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code.

Bob’s Scale Service can’t use this exemption if the work it is performing is covered under the CSLB. Companies that are licensed contractors have their own exemption from AB5.

This subdivision does not apply to an individual worker, as opposed to a business entity, who performs labor or services for a contracting business.

Ohm Electronics should contract only with a contractors that are actual businesses. To be considered a legitimate business a company should registered with the California Secretary of State as a corporation, LLC, LLP, partnership or sole proprietorship. Contracts with individual persons will not satisfy the “business-to-business” exemption.

Now for the kicker. After meeting all of these requirements you still may not be found to be exempt from AB5. As this is a new law it has yet to be tested in the courts, and once the courts have their say it may change even further.

References: Wikipedia: https://en.wikipedia.org/wiki/California_Assembly_Bill_5_(2019 ),
California’s Legislative Information Page: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5

The Thief

I have a friend that owns a bakery. This is not your neighborhood bakery but an industrial bakery that makes cookies for one of the major theme parks in both Los Angeles and Orlando. His facility in Orlando has generated profits since the day it opened, however that is not the case for his Southern California plant. The plants are almost exactly the same, except the California Facility is bigger. The California facility has never generated positive revenue and is being supported by the Florida plant. In fact, last year the California plant lost $1 million dollars. I was blown away by this, and offered to help him find the problem. After a four hour plant inspection/investigation I helped him identify the problem. He had a thief working for him.
The thief wasn’t stealing money, but product. My friend had run production numbers against inventory and stock usage and found that he was bleeding almost 16% of his inventory. He had examined the production records and couldn’t find any discrepancy in units made versus units shipped. His examination of spoilage records found no problems. The problem had to be in the raw ingredients. Was somebody paying kickbacks to a supplier? Was an employee selling materials out the back door?

I found the thief within the first hour of my inspection.

The thief was giving away the ingredients and my friend could not fire him. He couldn’t call the police and have him arrested. He couldn’t even sue the thief and recover any of the stolen money. It was all gone, unrecoverable. Why couldn’t he fire him? Was he a family member or trusted friend? No, my friend couldn’t do anything because the thief was his very own processes.

While performing my inspection I noticed that my friend was checking the weight of every cookie that was made. His customer would not accept cookies that were under weight. As part of my friends quality checks he had purchased a scale that would weigh each cookie as it came off the packing line and reject any cookie that didn’t weigh enough. This type of scale is called an in motion check weigher, and can be set to reject a product that weighs too much or too little. As I watched the machine run, I noticed that all of the cookies were over weight. Not just a small amount, but quite a bit. On a four ounce cookie they were averaging more than a half an ounce over weight per cookie. Soooo, he was giving away over half an ounce per cookie!

Lets get into some detail. His bakery manufactures 7000 cookies a day by hand, and sells them for $4.99 each. When you visit the amusement park you pay $8.99 for one of his cookies. His plant runs five days a week fifty-two weeks a year with twenty days of vacation and holidays, so 240 days a year. His gross revenue on this one product is over $8.3 million a year. Now looking at his production numbers, he was charging $1.25 per ounce. The amount he was actually giving away was $0.79 per cookie. This doesn’t seem like much but he was giving away over $5,500 in potential revenue per day or about $110,000 a month.

He and his production team were so worried about losing their marquee customer that they had made sure that they never sent them an underweight cookie. Just to be sure that it wasn’t underweight, they were making their cookies just a little heavy. Being overcautious had cost my friend $1.3 million dollars in potential revenues. This is of course potential revenue, and doesn’t count production and material costs, but this revenue is gone. The cost of the materials was much less than the selling price of the final product, but adding a level of profit to the ingredients would have generated some amount of gross profit that would have offset his loss to some degree or another.

Many companies look at the services performed by their vendors as pure expense with no way to recover any revenue. This is an erroneous way to look at the relationship. My company Left Coast Scales, services and calibrates weighing equipment. When we find a scale that is out of calibration, we can’t tell how long it has been that way. We can set a limit to the amount of time it was off by looking at the last time we serviced it. The calibration interval is often set by regulatory or customer requirements. But are these intervals good enough for your company? Sometimes they are, but like my friend just having a scale is not enough. It has to be correct. To calculate the daily loss of revenue that can be caused by your scale, use the following formula.

E x N x C = Loss

where E=the amount your scale is off, N=the number of weighments you perform each day, and C=the cost of the ingredient being weighed.

To get the yearly loss multiply the daily loss by the number of work days your company has in a year.
I will give two examples to demonstrate the losses that can occur.

Example 1:
Customer 1 is a recycler and has a truck scale that is off 20 pounds. They purchase scrap steal at $200 per ton or $0.10 per pound. They weigh 10 trucks a day. They work 240 days a year. The state of California requires that the scale be checked once a year.

20 x 10 x $0.10 = $20 per day or $4800 a year

Example 2:
Customer 2 is a cosmetic company and uses a balance to weigh fragrances. The scale is off 0.1 grams. They use a fragrance that they purchase for $2 a gram and weigh out the product 100 times a day for their batching line. They work 220 days a year, and the FDA requires that the scales be checked twice a year.

0.1 x 100 x $2 = $20 a day or $2200 every six months.

My friend had put his company into the position of losing money by justifying to himself that it was better to give away a little product than to lose a customer. Many companies put themselves in this position by not weighing the cost of an inaccurate scale as compared to the cost of regular maintenance. They look at the cost of having a company come out and check their weighing devices and make a decision based on an immediate perception that the service is too expensive. In example #1 the typical scale service on a truck scale is going to be less than a $500 an inspection (depending on where you are located), and the usual error found while performing an inspection is much greater than 20 pounds (when an error is found). In example #2 there are usually many more scales than just the one weighing fragrances, but if that is the only scale being checked the price should be less than $200, and adding extra scales becomes a factor of either time, or price based on the number of devices. Time is based on how long does it take to calibrate all of the scales. My company usually calibrates 4 scales an hour and typical pricing is based on $70 to $140 per hour. Device pricing can vary from $25 a scale to $150 a scale depending on complexity and the company performing the service. Most of the time there is also a travel and equipment charge to get to the site.

When deciding to have your scales calibrated the cost of the inspection and calibration is an important factor, but it should be weighed against the cost of having an inaccurate scale that is stealing money from your business as well as regulatory and customer requirements.
When my friend realized the magnitude of the mistake he was making with his process he had me adjust his check weigher to reject product that weighed too much as well as too little, and sound an alarm when it did. The immediate feedback to his production people helped them with their portions and helped him to bring his production under tighter control.

A Common Mistake in Sales

Having a new sales person, after never having one, is a learning experience. Hiring someone without knowledge of the industry has its own challenges. Learning the products and services that are sold, and the combinations of both, can be a long process.
A common process that we have, that many other industries don’t, is that we sell products marked up from the net price, and hence don’t have a true list price. To my surprise many people, whether technicians, salespeople, or administrators don’t understand how to correctly mark a product up.

There are two methods that can be used to get your list price. The Percentage Add On, and the Percentage Mark Up. Most people use some form of Percentage Add On to create their list price, however to truly control your profitability a Percentage Mark Up should be used instead.

To show the difference between these two methods I will give several examples.

I will be using the following values to determine the selling price:
A Part Purchased for: $500
The desired Profit: 25%
Where S = Sell price, P = Purchase Price, Y = Desired Profit

PERCENTAGE ADD ON FORMULA
S = P + (P x Y)
$625 = 500 + (500 x 25%) or 500 +125

PERCENTAGE MARK UP FORMULA
S = P ÷ ( 1 – Y )
$666.67 = 500 ÷ (1 – 25%) or 500 ÷ 0.75

An Add On just adds a percentage to a known value and is easy to do, but it doesn’t work backwards. Using the Percentage Add On example above I get a selling price of $625. But what happens when I try to take 25% back out of the $625 — $625 x 25%. I end up with a funny number that doesn’t match my add on, $156.25. With a Mark Up this doesn’t happen because you are actually increasing the purchase price by the selected percentage. Using the Mark Up example above I get a selling price of $666.67. I take out the 25% — $666.67 x 25% and get $166.67 the exact amount added to my purchase price.

As prices and percentages go up the difference between an Add On and a Mark Up increase substantially. For example Marking Up $100 by 40% will give a sell price of $166.67 where an Add On gives $140. Now try it with $3000: Mark Up = $5000 Add On = $4200.

Setting your list prices using a percentage Add On will cause problems if you ever try to discount. Examine the following chart to see the problems that can occur.

Note that the expected profit doesn’t match up in either chart. In the Add On Chart the expected profit is always smaller than the Add On minus the % Discount, whereas in the Mark Up Chart the expected profit is always larger than the Add On minus the % Discount. The reason for the discrepancy in the profit is due to where the numbers are being taken from. A 10% discount on a 50% Mark Up is not the same as a 40% Mark Up. The initial price is being increased by 50%, so when the 10% discount from the Marked Up price is taken, it is from the higher price, not the initial price that was Marked Up. 5% of $100 is $5, whereas 5% of $150 is $7.50.

Making money is why we are in business. Making it smart is better for us all.

Finding and Hiring the Right Person and a Plan to Keep Them.

In many small businesses the “Friends and Family Plan” is the most common hiring strategy. (Friends and Family hiring consists of bringing in people you have a relationship with, because you know them and they need a job, or have a skill you need, or you just like them. The biggest problem with this hiring technique comes when you need to fire them. Can your relationship survive?) Companies use this method until they reach a point where their friends and family can’t meet the skills or company needs, then they hire out.
My son entered to the scale industry by default. He didn’t want to be here, but had made some poor decisions with school, and voila, you’re a scale technician now. He was resentful, and didn’t want to work in the company, but needed the money. He started part time as the second man on a job when we needed unskilled labor. I tried to instruct him in the basics; it went in one ear and came out the other. When I fired one of my techs he assumed that he would be the natural replacement, since he had been working for me for so long. I had a long talk with him and explained that he would have to compete with others for the job, since he had shown so little interest. He had recently gotten engaged and was now looking at his future and had to make some hard decisions. He came to me and asked me to re-consider. He promised to buckle down and try. I decided to give him the chance. He was a changed person; he worked harder and was eager to learn. It was a night and day difference.
In the example above, my son shows what happens when you hire without a plan. When I gave him the chance to come on full time, I presented him with my plan and his path to get where and what he wanted. I hadn’t done this originally and, to my regret, wasted an opportunity to have him ready when I needed him. The blame was mine, not his.

Plans and Paths, what is the difference? For me, the plan is how I am going to find, hire and train the new technician. The path is how the technician moves forward in his skills.

Developing a plan for your employees that detail their opportunities helps keep them motivated, and motivated employees tend to be happy. Happy employees don’t quit and will put up with annoyances that are intolerable to an employee that isn’t. Reiterate the plan when you have your yearly reviews and update it as necessary asking the employee for their input. The key to retention is to have a stable workplace where the employees are happy. Surprisingly happy doesn’t always equate to more money. Sometimes it’s responsibility, other times it is stability. Get to know your employees and what makes them tick.

Finding the right person.
Hiring is a headache. With the down economy and so many people looking for a job, it seems that finding the right person for the job should be easy. The problems lie in sorting the wheat from the chaff. Put up a detailed ad describing exactly what you are looking for, and you will be inundated with people that you wouldn’t hire to wash your car, let alone represent you and your company. Hiring the wrong person can be extremely costly, in time, money and even the reputation of your company.

Hiring the right person requires its own plan. Get out a notepad and let’s break it down:

Define the perfect candidate for the job. Write out the skills he will need, the specific job requirements he will fill, and the personal characteristics you desire. Use this to create a report card that you will use to grade each applicant.
Define the job. Clearly outline the expectations for the position. Set the pay scale. Formalize your proposed incentive plan for the position.
Pre-screen your applicants. Go through the resumes and applications (the chaff). Don’t talk to anybody without pre-screening them and seeing if they meet on paper the qualifications and skills you wrote down in #1. Only then set up the interview. The interview is where you find the wheat.
Look for successful people. Find the person that has shown a desire to excel. Ask about awards they have received. Question them about how they measure success in themselves. Ask open ended questions about how they have succeeded in the past. Check their job history and references.
Don’t settle for good enough. In this economy there are stars out there waiting to be hired. Take the time you need to find the right candidate and make the right hire.
Look for stars elsewhere. Finding the right person sometimes means stealing him from the competition or even from another industry. In this economy it says a lot that these people are still working when others aren’t.

Be aware of what you can and can’t ask during a job interview. The following link is an excellent resource for do’s and don’ts.
https://www.admin.mtu.edu/hro/forms/whatyoucanandcantasklongversionmay05.pdf

After performing due diligence, and weeding through the applicants you have settled on the person you want to hire. Take the next step and make your offer.

How Do You Define Quality?

Having been in the scale industry for the last 27 years, I have recommended many different scales and systems for my customers. For many years I would help customers spec their needs as part of the service that my company provided. In order to quote the correct product, I often had to dig deep into the weeds to determine what the customer really needed even when they didn’t know themselves.

I had a food manufacturer ask me to quote him some scales for checking the pre-packaged weight of his product. After a site visit, and talking to production and Quality Control, I made several determinations:

The maximum product weight was 1.5kg and minimum was 500g.
The minimum required tolerance was +/- 0.5g.
The scales needed to be easy to clean.
The scales were subject to intermittent water spray.
The customer wasn’t connected to a data collection system, but wanted the ability to connect at a later date.

I quoted a 3kg wash down, stainless steel bench scale that read by 0.1g. After presenting the quote, I was contacted by the customer and told that my quoted price was too high. The purchasing manager had found the same scales on-line, for a third of the price I had quoted, and purchased them. I asked the purchasing manager where he was getting them from since he was paying 40% less than my cost for them. He wouldn’t tell me but he did have me install them.

Guess what? They weren’t the same scales I had quoted. The only thing that matched was the capacity and resolution. I had quoted an entire stainless scale and these were plastic with a small stainless pan. They weren’t water proof or even water resistant and they couldn’t connect to a data collection system.

This customer purchased eight scales, and by the end of the year had replaced all of them at least once and several twice. Water damage wasn’t covered under the manufacturer’s warranty.

At the beginning of the new fiscal year the Quality Control Department installed the new data collection software. All eight scales had to be replaced with the scales I had quoted originally.

I had quoted quality scales that matched the customer’s needs. After a year in use the customer was convinced that the scales they had purchased were junk. Honestly there was nothing wrong with the quality of the scales purchased. They had just purchased scales that didn’t meet their needs.

Quality can be a low cost import, but it has to meet your needs and requirements. If you don’t know what you need, and you bring in an expert to help define your needs and requirements, trust the expert. If you aren’t sure that the expert is correct, question them, and determine how and where they got their data. Most scale companies won’t charge you for this expert advice, but they do expect to have a strong chance of getting the order.

Quality also comes in the after sale service. If I had quoted the wrong scale in the example above and sold the customer the same scale they purchased. I would have honored the implied warranty. Not every scale company will do this, so know whom you are purchasing from.

Quality in a product is determined by you. Having your needs and expectations met on a product is dependent on the definition of your needs. Without a true definition of your expectations you will not be satisfied with what you are purchasing.

Booting Your Hopper

I was recently called out to a customers because their hopper scale kept filling after the filling auger was turned off. I performed a thorough inspection and couldn’t find anything mechanically wrong with the scale. I had the customer run through the batching process so that I could observe the problem from the customer’s perspective. I watched the indicator slowly fill the hopper and after the filling equipment turned off, the scale slowly and erratically added an additional 200 to 300 pounds to the batch. I then went out and watched the batching equipment fill the hopper. As I watched, I saw the boot on the left slowly start to suck in until it was displacing only half the volume it had when the batch started. Somehow or another the boot was being put under vacuum and the boot was pulling on the scale. When the batch was done the boot slowly relaxed and returned to normal. With the customer’s consent I put a pipe into the top of the boot to relieve the vacuum. We ran another batch and the problem went away. I told the customer to figure out where the vacuum was coming from and fix it, but the problem was fixed for now. Rubber boots can cause some weird and perplexing problems.

If you have a tank or hopper that is being filled with powder or something similar, you have seen boots. Boots can be made of many different materials from cotton fabric to silicone rubber. They often are the culprit in weighing issues on hoppers and tanks that had been working fine and all of a sudden aren’t. They are used when you have materials that need to be transferred into a hopper or tank but the material will cause a lot of dust or want to flow out of the filling aperture. Since hard piping to a scale is a no-no, boots were created to allow the scale to move freely but still confine the material being transferred.

All of the issues that will occur with boots come down to some kind of bind. Here are some of the problems that you will see:
1. Material builds up inside of the boot and bridges across the gap between the fill pipe and the pipe on the hopper.
2. The boot is installed without any give, or too tightly.
3. Material works its way between the receiving pipe and the boot.
4. The material sticks to the boot and hardens.
5. The boot stretches like a rubber band as the hopper fills and moves.
These issues all prevent the hopper from moving freely. Without free movement the scale will often not zero correctly or weigh non-linearly.

These problems can be very difficult to find and diagnose. A full inspection on tanks and hoppers is not complete without examining the boots and piping. When problems are found it is always best to have your customer clean, repair, or replace suspect piping and/or boots to prevent problems from developing.

Examples of Impacted Boots on Various Hopper Scales

Are you a Pirate?

Are you licensed? Of course you are. You have licenses for resale, business, for your commercial fleet, and many others. These licenses allow you to operate. You wouldn’t do business without them. However there is one license that many small businesses skirt around – the software license. It is the easiest license to get and the easiest to use improperly. If you forget to pay your business, or resale licenses you may have to pay a fine up to double the license cost. If you violate the license on a piece of software it could cost you your business.

My wake up call came when I got a notice from Microsoft that one of my pc’s had an invalid Windows installation on it. The computer was purchased from a local vendor, who was loading the same copy on multiple machines. We, through no fault of our own, were caught with a pirated copy of Windows. As soon as we were informed we purchased a new copy and installed it.

What rights do you have under the licensing agreement that you get with your software? Software publishers write their license agreements so that they have no obligation to the user, the program isn’t even required to work. They can do this because when you purchase a software package you aren’t actually purchasing a product, you are purchasing the privilege to use the software in accordance with the conditions of the software license.

What is the real definition of Software Piracy? Software piracy is the unauthorized copying or distribution of copyrighted software. Since you aren’t actually purchasing a product when you buy a software package, but just the rights to use it, its use is governed by the End User Licensing Agreement (EULA). The EULA tells you how many times you can install the software and under what conditions you can use it. If you make more copies of the software than the license permits, you are pirating. The EULA tells you if you can install it on multiple machines, and how many users are allowed to access it at a time. If it is the most common type of license, you are limited to one machine per license.

What about OEM Software? Original Equipment Manufacturer (OEM) software is the software that was installed on the computer by the manufacturer. The EULA for most OEM Software states that it can only be installed on the machine it was supplied with. This means that if you have an OEM copy of an operating system and the computer is physically destroyed, the software can’t be installed on a new computer. OEM licenses are non-transferable, so if you sell the computer or donate it to charity the new owner is required to purchase a new license for all of the software on the machine.

Yeah, but who is going to enforce these license agreements? Software licensing is enforced by the Business Software Alliance (BSA) and the Software & Information Industry Association (SIIA). According to the BSA it “…is the largest and most international IT industry group, with policy, legal and/or educational programs in 80 countries.” (https://www.bsa.org). It’s members include, Microsoft, Apple, Autodesk, MacAfee, Intel and many others. The SIIA on the other hand declares that it is “…the principal trade association for the software and digital content industry.” (https://www.siia.net). It’s members include, Adobe Systems, Bank of America, Dell, Google, IBM, McGraw Hill, ThomasNet, and tons of others.

Again, yeah, but how are they going to catch me? Have you ever had a disgruntled employee? The BSA and the SIIA both have programs that offer rewards of up to $1,000,000 for the confidential reporting of software piracy. This could make that disgruntled employee happy while ruining you. The BSA paid out $136,100 to 42 informants that provided verifiable information about unauthorized software use in 2008 (the latest year reported).

Has an employee taken a copy of the software home and installed it on his personal computer? When he logs onto the Internet the software may call home to report that it has been installed. The software companies are starting to audit these activations and take action.

When the BSA and the SIIA receive a notice of piracy, they send the offender a notice that demanding that it produce an inventory of all of its computers and proofs of purchase for each software package used on them. They typically give 30 days to comply with the demand. If the demand is ignored civil proceedings are instituted. If an employee installed a game or even software needed for his job on his computer, and it isn’t licensed properly, your company is liable. Purchasing licenses after you receive a notice of an audit will not protect you. The BSA figures their penalties based on the level of compliance you had before you received the notice. You can expect to pay a penalty of approximately ten times the full retail cost of the software, as well as legal costs. The maximum civil penalty for a license deficiency is $150,000 per infraction, while criminal penalties can put you in prison for up to five years.

How can I protect myself and or my company? First, you must understand what the terms of the EULA mean to you and your company. This can be easy for a small businesses and complex for larger companies. After that, you need to develop a comprehensive and accurate record keeping system to track software purchased and the systems where installed. The next step is to develop a comprehensive Information Technology (IT) policy. This policy should indicate a commitment to follow the requirements of the EULA’s, and implement a system to track software that is installed on your computers. Remember, you are responsible for software that your employees install on their work computers as well as any software that they may take home. And finally, you actually have to comply with the rules. This means buying the number of licenses required by the EULA.

Software auditing tools are available from the BSA and SIIA websites. These tools if used properly can help you identify the software and hardware on your systems as well as determining if it is properly licensed. Both the SIIA and the BSA recommend using these tools regularly.

What about freeware and shareware? Free software is always an option, but you need to do your homework before switching to it. First you must determine what your needs are. How do you use your computers? Do you rely on specific software packages? Is there a free alternative to the software that you rely on? Is there a work around for the free software package that does most of what you need but not all?

The following is a list of high quality free software that can often replace proprietary software used daily in offices:
GnuCash is a small business financial accounting software package;
DoubleCAD XT is an AutoCAD LT work-alike;
OpenOffice.org is a free office suite that can open and save most
Microsoft Office documents;
and there are several free operating systems available from Linux, BeOS, to Free BSD (most include OpenOffice.org).

Another option is cloud computing where the software is on the internet instead of your computer. To write a memo log onto the internet, browse to your word processor, and write away. Google Docs is a prime example of the concept. From your Google account you can use Google Docs to write documents, create spreadsheets, and create online presentations. All you need is an internet capable computer.

What did I do? Most of my office computers run Linux. I chose Linux because it has most of the software needed for every day use without having to manage software licenses. We have two machines that run Windows full time because our accounting and service software can’t run on Linux. Two laptops normally run Linux unless they are needed for interfacing with PLC’s or scales. When they do, they are re-booted and Windows is launched. This solution works for my company. What you need will certainly be different.

With a little work, you can guarantee that you will not have problems with improperly licensed software. While I wanted to get as far away from proprietary software as I could, I found it almost impossible to do. Most companies rely on software that is designed to run on Windows. Unless this changes, some of your computers will use Windows. Remember that your computer licensing is just as important as any other license used in your business.

A Sticky Situation

I overheard one of my customers, a large manufacturer of corrugated boxes, complaining about a spill on the production floor. The spill cost them 4 hours of production down time because of the clean up. I later asked my contact about the problem and was told that their glue dispensing system had overflowed again. They use a liquid glue similar to Elmers Wood Glue to hold the boxes together. The glue is kept in a bulk storage tank and dispensed to each box forming line. Each line has a surge tank to keep a local supply on hand for immediate use. They had attempted to use many different methods to maintain a set level in their surge tanks, from floats to ultrasonic level sensors. Everything they tried failed. The glue would always end up coating the sensor and the tank would stop working or over flow. Even with regular maintenance these systems had an unacceptably high failure rate, with up to one spill a quarter.

I offered to help them with their overflow problem. The solution needed to be out of the box, literally and figuratively, since having the sensors inside the container meant they were susceptible to contamination. The surge tanks are made out of polypropylene and have flat bottoms. The first suggestion was to put the tanks on floor scales, but due to the overflow problems they have had they wanted the load cells to be protected. I designed a table for the floor scale that raised it 2 feet off the floor, then put a skirted cover over the deck that hangs down below the cells and feet. So, in the unlikely event that a spill occurs the load cells and feet are protected.

I chose the Rinstrum R420 for this application. The R420-K401-A is the base unit in its line. As a base unit it is still very powerful, with up to 32 digital I/O, and a set-point engine to run a process. After discussing the application with the customer we defined the following specifications:\

An alarm needs to go off if the weight exceeds 80% of the capacity of the tank
Another alarm needs to go off if the tanks weight goes below 25% of capacity.
The tank level needs to be kept between 45% and 65% of capacity so that the glue is always above the heating coils in the tank.
If the tank level is above 35%, an agitator needs to be turned on.

The R420 was set up with three free running set-points. Set-point 1 was set up for the high level alarm, and would activate if the gross weight went over the programmed level. Set-point 2 was set up as the low level alarm and activated under the programmed weight. Set-point 3 was used to turn on the agitator whenever the level was above the weight. Set-point 4 and set-point 5 turned the filling pump on and off to keep the tank at the optimal level.

The customer was delighted with the new system. They had been struggling with this problem for a long time, and no-one had ever considered using a scale to solve the problem. As scale salesmen and service technicians we think in terms of scales for every application. To our customers, scales are a very small portion of their lives, and as such may not be considered for simple applications such as this one. By keeping my eyes and ears open while visiting the customer I was able to find a great sale, and able to provide a simple solution that had been eluding my customer for years.

Fixing An Inventory Control Problem

A large customer of Left Coast Scales is a leader in packaging technologies, manufacturing materials from bubble wrap to bio-degradable foam packing. This customer approached Left Coast Scales looking for a solution to an inventory problem at their Southern California location. I had been working with them for several years doing scale calibration and maintenance, and they wanted to know if I could help them weigh their product since they were having a problem with inventory on the resin they used in their bubble wrap line. The material was supplied by rail car, and stored in silos on site. The material is a dry pelletized resin that is transferred directly to the production line with a vacuum conveyor. The amount of material that is in a rail car is known, and should result in a specific amount of product with a specific amount of spoilage, however the numbers weren’t adding up and 40 tons of material was missing in the last year. Where was it going? Was it not being recieved? Were they using too much of it? Were they losing some of it to theft or conversion?

Several easy solutions presented themselves for resolution of this problem. The rail cars could be weighed on-site, the storage silos could be weighed after filling, and the material could be weighed as it was used. The first two options were impractical in this instance due to the site location for a rail scale and construction of the silo didn’t allow for modification. Because the material is being transferred via vacuum conveyor directly to the production line, into a bulk storage hopper that is integrated into the forming machine, it wasn’t practical to weigh it at this point. An intermediate weigh hopper was needed. The material would be batched into the weigh hopper until a set-point was met, the conveyor would be stopped, the material weighed and accumulated and then dumped into the forming machines bulk storage hopper. A series of bindicators in the bulk storage hopper would be used to prevent the weigh hopper from dumping and also tell the weigh hopper when to start loading.

I chose Rinstrum to supply the controller for our project. Rinstrum’s R420 digital weight indicator comes in several different configurations, from a basic Gross, Tare, Net indicator (R420-K401) to a six ingredient 10 stage batch controller (R420-K411). I chose the R420-K410-A, a panel mounted single ingredient batch controller to control the process, with a Rinstrum D320 remote display for displaying the accumulated totals. The R420 was the perfect controller for this job, with a three stage batching engine that allowed me to check for batching conditions with interlocks such as the dump enable, fill enable and batch interlocks.

I defined the sequence of operation for the system as follows:
1. The bulk storage hopper would reach the low level alarm and request more material.
2. (Stage 1) The system would check to ensure the weigh hopper’s dump gate was closed then start filling it to 750lbs.
3. When the hopper exceeded the set-point it would tell the system to stop sending material. (I couldn’t get the weight to meet the set-point exactly due to the volumetric filler on the pneumatic conveyor system.)
4. After the hoppers weight stabilized the weight in the hopper would be added to the accumulator, and the accumulated weight would be shown on the D320.
5. (Stage 2) The scale controller checks to see if there is any room in the bulk hopper through the use of the high level alarm. If there is room the weigh hopper opens the dump gate and empties all of the material till the scale is empty, then closes the gate. If there is no room, the hopper waits till the bulk storage hopper requests more material before emptying. (This stage is where the scale spends the most time, waiting to dump.)
6. The scale returns to Stage 1 in a continuous cycle.

After completing the installation, testing the equipment and ironing out the bugs the system worked flawlessly. I trained the operators, turned the system over to production and the system was up and running. Everything worked for several weeks until I found that power at the site was not always reliable. The plant would occasionally lose power. I was suddenly hit with the question, “What happens if the system is batching material into the weigh hopper and all of sudden the power goes out?” I lost a couple of loaded hoppers worth of material when this happened. The solution took a little creative thinking about how the system needed to operate. I ended up swapping stages 1 and 2. Now if the hopper was at zero when started it would immediately go to stage 2 and start filling. If it wasn’t at zero it would wait till there was room and dump. I set it up this way under the assumption that there would be material in the hopper when power was lost and I needed to start at zero for the accumulations to work correctly. I then installed a UPS to power the controller when the power went out. When power is lost the R420 will receive a signal from a relay that I installed on line power causing the instrument to stop filling, accumulate the batch and then abort the process leaving the material in the hopper. Now when the customer loses power the operator only needs to press start and the system takes over.

With the success of this installation, I have installed a second system at this location with two more in the process for installation at their plant in New England.

Category: Blog