How a Client is Solving Write-Offs, Via Technology and Frequent Physical Inventory Counts

A multinational materials company that manufactures and distributes cement, ready-mix concrete, aggregates and materials including coal, recently approached Stockpile Reports. They were searching for a solution to reduce write-offs, time, and costs associated with inventory measurements across multiple sites.

Technological advances are now shrinking the time needed to perform company-wide physical inventory counts from 3-5 weeks down to 3-5 days. Measurement methods include the iPhone, drone, and airplane.
Technological advances are now shrinking the time needed to perform company-wide physical inventory counts from 3-5 weeks down to 3-5 days. Measurement methods include the iPhone, drone, and airplane.

The materials company had been performing inventory counts on multiple sites and regions. They’d hired an expensive third party survey team, who’d utilized a truck-mounted laser for measurements. Using a truck-mounted laser was accurate, but the costs associated with the surveys only allowed for physical inventory measurements to be performed once yearly.

During the rest of the year, team members kept a perpetual inventory by performing self-reported monthly estimates of material on hand. They estimated these amounts monthly, and sent the totals to the Finance Department.

As a result of not using current, accurate measurement data, the company had been experiencing major write-offs every year. This also corresponded with large financial swings.

Stockpile Reports was engaged to perform monthly physical inventory counts, utilizing a mix of measurement technologies. These included using iPhones, drones and planes. It was determined that using a combination of collection methods was the most appropriate solution. The location of material’s company sites are wide-spread across multiple states in the US. Each site also varied in material types, safety, stockpile placements and stockpile sizes.

The Solution for Write-Offs

Since the materials company has a company drone, a portion of one location is now measured monthly via drone for tall coal piles. This is in a high-traffic area, making it unsafe for ground measurements.

Bunkered material and smaller stockpiles are measured monthly with iPhones using internal labor. This is to spot-check incoming deliveries, and also ensure that outgoing deliveries meet production expectations.

A physical inventory count is conducted quarterly at all locations on the same day if weather permits, using Stockpile Reports’ flyover service. This is providing a running perpetual inventory for the company.

The Savings

The client recognized immediate costs-savings. There is no third-party labor needed to implement Stockpile Reports’ solution. The time-savings enables the company to perform company-wide measurements regularly. For example, the average time required using internal labor and Stockpile Reports’ flyover service was only 20 minutes per each site. Internal labor used for piloting a drone for site measurements averaged about 45 minutes per site. The average measurement by iPhone was 3-5 minutes per stockpile and bunker.

The materials company has successfully accelerated physical inventory counts, and are now performing monthly measurements. Measuring often, regularly, and accurately is the key to inventory control. They are making data-driven material handling decisions, and are greatly reducing financial write offs.

This blog post is a continuation of  “The Case for More Frequent Physical Inventory Counts” and last week’s entry “Controlling Swings in Inventory with New Technologies.

We are always happy to share our success stories. Contact us for more details about how we can assist your company and reduce write-offs.

 

 

 

How Pete Lien & Sons Improved Worker Safety by Measuring Stockpiles with an iPhone

Pete Lien & Sons engaged the Stockpile Reports’ service as a means to improve the accuracy of their stockpile measurements while maintaining employee safety.

Safety first: A worker at Pete Lien & Sons using an iPhone to measure stockpiles safely.

Previous methods of stockpile measuring had limited accuracy. This was due to the need to walk on stockpiles with data collection equipment, which the company does not allow. Other systems that do not require accessing stockpiles were considered, and ruled out due to the additional hardware, data processing time and training costs that would be required for multiple users. Using an iPhone as a measurement tool provided a safe and accurate way to measure stockpiles without the investment in additional hardware equipment, technical processing, and extensive training.

About Pete Lien & Sons

For over a half century, Pete Lien & Sons has provided construction materials for communities across South Dakota, Wyoming, and Colorado. The company’s commitment to customer service and product quality has helped it grow from its humble beginnings to a large scale, multi-state operation with over 400 employees.

Throughout the history of the company, Pete Lien and Sons’ core business has been mining, primarily limestone, followed by sand and gravel. The company currently has mines in Colorado, South Dakota, and Wyoming. The company is a major supplier to concrete plants, road contractors, and homeowners.

Current Safety Standards To Be Met

Pete Lien & Sons’ priority is to provide a safe and healthful workplace for employees which is accomplished in part by maintaining compliance with both federal, and state laws and regulations.

Accidents cost much more than money. In addition to lost productivity, increased insurance premiums, medical bills, workman’s compensation, and, in the most tragic cases, death benefits, the company loses the respect of the local community, and morale among employees.

Inventory is an important tool that an operation uses to measure success and plan for the future. Any additional accuracy in the measurement process improves their ability to monitor their progress and make decisions that will improve efficiency. The benefit of obtaining more accurate inventory data may inadvertently incentivize operations staff to walk on stockpiles with survey equipment, even if it is not a company approved practice. Pete Lien & Sons recognized the potential conflict, and began a search for a tool that would assist in eliminating it.

Why Stockpile Reports Was Selected

Stockpile Reports is the only available service delivering accurate stockpile volume, tonnage and pile locations using an Apple® iPhone® device. The patent-pending Stockpiles App provides real-time feedback and guidance for the user on-site. Results are typically available within hours after data is uploaded to the servers. Upon completion of processing, users may then login to stockpilereports.com and view the tonnage and volume results via a site report and a corresponding stockpile report.

Collection features encoded into the Stockpiles App are built-in to enable companies to promote employee safety and MSHA regulatory compliance.

Safety benefits from measuring with an iPhone include:

  • Less time workers are exposed to hazardous conditions on-site. Typical collection times per pile each average between 1-4 minutes.
  • Minimizes the possibility of having to return for subsequent data collection by communicating in real-time user errors while recording, via Smart Collect audio and visual notifications.
  • Using the iPhone as directed circumvents the need to climb piles as done by traditional GPS data collection.

Training the Team

Pete Lien & Sons’ GIS Technician downloaded the Stockpiles App onto an iPhone and was assigned an administrative user account and password to access the client portal on StockpileReports.com.

Site, product data and tonnage conversions were entered into the Stockpile Reports system with a list of sites and users.

Personalized training sessions online were conducted with instructions for beginners on how to measure piles with an iPhone, similar to online assistance as provided to all clients.

After completion of online training, the GIS Technician coached internal team members on how to measure with iPhone. Stockpile Reports then made a company visit to South Dakota and assisted the team with advanced training. The service was then rolled out to all of Pete Lien & Sons’ sites.

Results/Impact of Safety Partnership

Since the inception of the partnership agreement, over 350 stockpile measurements have been safely made from stockpiles across the states of Wyoming, South Dakota and Colorado.

There were zero stockpile measurement-related accidents at Pete Lien & Sons’ locations while using the iPhone.

The majority of stockpiles measured were in the 0-1000 ton range, with an average time to measure of 2:17 with an iPhone. Piles with a range of 1000-3000 averaged less than 3 minutes per measurement, at 2:59.

“Our employees at Pete Lien & Sons are our most valuable resource,”said Danielle Wiebers, Manager of Environmental Safety and Affairs. “We’re able to train any employee equipped with an iPhone to take measurements safely, accurately, and in less time. We are confident not only in the accuracy of the results, but also for the safety of our team. It’s a win-win for our company.

Download the complete case study here.

For more information about how the Stockpile Reports system can help your company reduce risk and be more productive, please read this blog post.

Stockpile Reports’ benefits add up to better decision-making with lower risk, faster inventory turns and lower operating expenses.  Contact us to find out how your business can benefit from utilizing our service today.