Re-evaluating the Role of Your Inventory


Re-evaluating the Role of Your Inventory

There is no better time to re-think how you can streamline your processes. Answers to the questions outlined here can have a dramatic effect on your bottom line.

The obvious reason you should optimize your inventory and design process is cost. However, within that word are a myriad of processes and procedures to consider. The objective is not necessarily to obtain the lowest cost in terms of materials, but to balance that goal against potential efficiencies in design and manufacturing, which lead to lower personnel costs and quicker production runs. How does spending extra time on the design side to standardize truss designs affect the efficiency of production? How does the lumber and plate inventory available to the designer affect the efficiency of the plant? How have changes in building codes and design standards affected designs and associated inventory needs? Dan Morris of True House, Kevin Riesberg of Plum Building Systems, Steve Szymanski of Truss Systems and Gary Tebbins of Universal Forest Products shared the questions behind these big ideas that can help guide your decisions about altering your inventory.

Lumber Inventory

The concept is simple: Use the lowest grade lumber necessary to design components, because lower grade means lower cost. Right? Not so fast.

Take, for example No. 2 grade SPF lumber, which is pretty common for those in the northern and western portions of the United States.

  • What is the cull rate for rejecting chord material due to wane, knots or twisted lumber? Sure, you can re-use it in floor truss webs, but what is the cost to handle those pieces multiple times?
  • MSR 1650 may have a higher initial cost, but likely has a lower cull rate and better appearance. Does it make sense to switch to the higher grade? At what cost difference would it make sense?
  • What if switching meant you were able to eliminate a grade from inventory—how would that affect the productivity of those selecting materials for production?
  • Consider the extreme case: what if you stocked only one lumber grade and size? How would this affect the efficiency of your designers? Of your plant personnel? Of your production? No one would go to this extreme, but what if you had two or three grades of 2x4 instead of four?

Consider also the use of high grade 2x4. Maybe you use MSR 2400.

  • How do truss designs differ when using high grade 2x4 vs. 2x6 No.2 in truss chords?
  • How many webs can you eliminate by using the 2x6?
  • What is the perception of your customer when they receive trusses with 2x6 materials rather than 2x4? Do they consider it a better product?

It’s hard to put a price on this, but if the end result is similar-cost trusses that are perceived as a better product, using more expensive raw material might garner goodwill and place you ahead of competition in bids for future work.

Plate Inventory

Building codes and standards are constantly changing. With few exceptions, state building codes are updated every three years and changes to the truss design standard, TPI 1, are incorporated into those codes. Design software is constantly changing as software developers learn more about the flow of loads through buildings and update their products accordingly.

All of these changes affect component design. For example, if you haven’t taken a close look at your plate inventory recently, you should. We have all installed new truss design software only to find that designs we were manufacturing previously no longer work. Maybe a different plate size or lumber grade is necessary. Sometimes, small changes in the software are difficult to detect and only show up in very specific circumstances. It is a good idea to periodically run comparison analyses to identify whether your current inventory is still the most effective for your plant. 

The comparison is simple—take a representative sample of your production as designed and then re-run them using all plate sizes available from your supplier:

  • What are the differences?
  • Do you see any trends with heavy usage of a plate size that is not currently in stock?
  • Can you replace another plate with this one?
  • Are there plates in your inventory that have low usage and could be eliminated?
  • Can the number of plates sizes inventoried be reduced?
  • How would such a change affect the efficiency of personnel as they select plates?
  • How would it affect the assemblers as they produce the trusses?

Also, think about the effect of the design process on plate size. For example, consider the plates that are at the top chord pitch break of a hip truss. Compare the plate size needed when using plumb cuts to the size needed when using a mitered cut. Consider also your default plate settings. Does your software setting force plates to be horizontal for this condition or does it allow the plate to be rotated and evenly placed across the mitered joint? If you are not sure how to check these items or how to change the settings, consult your software representative for help.

The industry is rebounding after the long economic downturn, and there is no better time to re-think how you operate your business and can streamline your processes. Answers to the questions outlined here can have a dramatic effect on your bottom line. The decision you make based on those answers determine the productivity of your plant, the efficiency of your design staff and ultimately the profitability of your company.

This article was based on the 2015 BCMC Educational Session Optimizing Your Inventory/Designs. Many thanks to Dan Morris (True House, Inc.), Kevin Riesberg (Plum Building Systems, LLC, Steve Szymanski (Truss Systems, Inc.) and Garry Tebbens (UFP San Antonio LLC).