Shorter Lead Time and Maximum Throughput: How McElroy Manufacturing Transformed Business Outcomes with Production Scheduling

McElroy machine builder on shop floor optimizing throughput and on-time delivery

McElroy Manufacturing is a leading producer of thermoplastic pipe, and a leader in the design and manufacture of fusion equipment and machinery to produce finned tubes. The company has been in business since 1954, and today its pipe fusion equipment is used globally for thermoplastic pipe including polyethylene, polypropylene and more. McElroy also produces rugged and technically advanced pipe fusion. Its finned tube manufacturing equipment offers speed, durability and efficiency for finned tube manufacturing operations, so finned tube makers can produce maximum business results.

Leaders at McElroy were eager to revamp the organization's approach to capacity planning. The cross-functional leadership team looked to On Time Edge to help the company optimize material and capacity constraints for McElroy's complex operations. McElroy's business system vendor had recommended On Time Edge for their expertise in digital transformation for agile supply chains and manufacturing operations excellence.

Ambitious Vision: Optimize Inventory and Production Runs

McElroy’s fused thermoplastic pipes are used for things like water mains, sewer mains, drainage systems, oil and gas pipelines, chemical manufacturing and transport, food manufacturing and transport, desalination plants, paper and pulp manufacturing, and many more.

McElroy manufacturing fusion equipment — Photo courtesy McElroy Manufacturing, Inc.

The Tulsa, Oklahoma-based global company is a vertically integrated make-to-order and make-to-stock manufacturer. It has complex routings and complex bills of materials. The organization faces tremendous variability in internal processes and external demand. With over 100 work centers, McElroy procures more than 20,000 raw materials and parts. Optimizing inventory and production runs is a definite challenge.

A few years ago, McElroy experienced a perfect storm of business impacts: The company had sizeable increase in demand. At the same time, the product mix was changing dramatically. And finally, there was a rather large shift in working process. As a result, on-time delivery went down, lead times escalated, and overtime shot up.

The McElroy executive team concluded that the many challenges was an opportunity to address its “unlimited capacity” approach to capacity planning. Functional leaders across IT, production, and other disciplines joined forces to identify a constraints-based planning system.

Confident First Steps with Constraints-Based Scheduling

McElroy’s business system vendor recommended On Time Edge as a results-focused expert in digital transformation for agile supply chains and manufacturing operations excellence. The supply chain consultants at On Time Edge helped McElroy set a course to create a better manufacturing production schedule in less time, and more importantly, optimize material and capacity constraints.

McElroy Manufacturing shop floor worker assembling equipment — Photo courtesy McElroy Manufacturing, Inc.

The first step was to identify the right production scheduling system to handle the intensely complex nature of McElroy’s demand planning, supply chain, and manufacturing operations.

The McElroy leadership team decided to implement a production scheduling application for constraints-based production scheduling, and for production schedulers to:

Apply advanced scheduling algorithms to balance demand and capacity
Easily generate and optimize production schedules
Optimize raw materials and production capacity
Automate production schedule templates to fit production constraints
Enable production schedulers to quickly respond to real-time production disruptions
Conduct tactical planning and scheduling with a several-week horizon

McElroy engaged On Time Edge to implement the solution, conduct process mapping, and create effective scheduling models.

Early Results and a New Source of Competitive Advantage

Just five weeks after project launch, the production scheduling team used their new production scheduling application to create its first optimized production schedule. The leadership team realized that moment was just the beginning of the journey to transform manufacturing scheduling into a strategic competency and a source of competitive advantage.

The company needed make a significant cultural shift – that extended all the way to the shop floor – to make the new approach and the new schedules work. On Time Edge showed McElroy how to get the information from its new system into the hands of the people who needed it most and who have the greatest impact on results – the shop floor workforce.

Ultimately, McElroy was able to use the information from their production scheduling system to provide accurate delivery estimates and delivery quotes to customers. The leadership team found the data so accurate, McElroy started publishing capacity-tested ship dates for any product listed on the company’s website. A long-time trusted manufacturer across industry and around the world, McElroy’s credibility among customers skyrocketed as a direct result of On Time Edge’s guidance for on-time delivery performance using the production scheduling system:

Reduced order cycle time from >40 days to <20 days
Dramatically reduced WIP inventory
Boosted monthly production 30% with zero capital investment

Furthermore, the leadership team acknowledges gains in competencies that enable performance improvements and ongoing value. Looking to the future, McElroy is enthusiastic about digital transformation in manufacturing to drive sustainable business for an agile supply chain and manufacturing operations excellence.

McElroy achieved performance improvements and ongoing value

Topics discussed

Diane Murray

Senior Director of Marketing

DIANE MURRAY has spent the last 24 years proclaiming the value of enterprise performance solutions for manufacturing, supply chain, retail, banking, healthcare and many other arenas. As Senior Director of Marketing with On Time Edge, she focuses on capturing and reporting client success stories, engaging the industrial community, and nurturing vendor partnerships. Prior to On Time Edge, she was a Senior Content Manager and Research Associate with LNS Research; her editorial contributions spanned the breadth of that firm’s research including Industrial Transformation and the Industrial Internet of Things (IIoT), along with factory of the future, manufacturing operations management, industrial analytics, asset performance management, quality management, and the connected worker. From 2006 through 2015, she was an evangelist for MES, EMI and ERP systems offered by Informance, Solarsoft, and Epicor, and collaborated with cross-functional teams to accelerate sales pipeline, create sales enablement, develop content, refine positioning, and grow market awareness. Before her tenure with Epicor and companies it acquired, Diane worked with several businesses, as a staff member or as a strategic consultant, to plan and implement content marketing, create integrated marketing, write solution sales training and support marketing automation. Diane's passion is building and sustaining relationships with customers and stakeholders, and has enjoyed the marketing craft for nearly 40 years. She calls herself "relentlessly inquisitive;" books, cooking and languages feed her innate curiosity “almost” as much as collaboration in the industrial enterprise tech space.