Problem-Solving – Left Coast Scales

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 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.