Roger Schulz admits he's "hardly the first guy to go to a true just-in-time daily delivery" for manufacturing raw materials. However, the purchasing manager for the Snow and Ice Division of the Monroe Truck Equipment manufacturing company in Monroe, Wis., reckons his purchasing program for steel structurals—bars, channels, angles and rods—may be somewhat unique in that he uses no purchase orders, no receivers and no invoices. And, because of that, "a lot of nonproductive effort by buyers has just disappeared."

At various other companies, veteran steel buyer Schulz lived through the transformation of the purchase order from "a stark, minimal data paper in the 1960s to the well-drafted, court-ready document in the 1970s and 1980s to today, where we don't even write one."

Monroe manufactures and installs major components of medium-sized trucks, specializing in equipment for snow and ice control and removal, dump bodies and spreaders, and utility and van bodies. "The nature of our product line does not allow for forecasting models, which requires our response time to be short and our in-house inventory of raw materials to be extremely lean," Schulz explains. "The result is a heavy reliance on suppliers that can respond quickly and reliably, with a competitive price, and discourages the buyers from repeatedly shopping for price."

Historically Monroe Truck Equipment used purchase orders to buy routine items such as structurals. "I considered the amount of labor being used on a daily basis to do this, and then went through the standard reaction of 'let's order more, less frequently' which met with tremendous resistance from the shop floor, because I didn't appreciate the uniqueness of 'the pile in the middle of the floor'," says Schulz. That's because Monroe's end products are manufactured using various different kinds of structural steels—325 different sizes, shapes, grades and lengths.

Of these 325 items, eight equal 30% of the annual piece count in any given year so that, in many cases, the buyers may order only a single piece of the remaining 317 parts. "Maintaining any significant stock level of these rarely used items would be counter to the logic of inventory management," Schulz says. "Consequently, we order and receive our structural needs on a next day on just-in-time basis. On any given day, our order may include from five to 20 different steel items, each with an elaborate description, and may total up to 100 individual pieces." The need then became, not the metal, but a better way of buying the structural pieces with less wasted effort. The answer actually became using a single new supplier—Wausau Steel, a service center in Wisconsin—which proved to be willing to work with Monroe's buying team as primary supplier to set up a more efficient system of managing transactions. "We furnished Wausau with historical use data and especially frequency of order of the individual items," says Schulz.

Structurals items typically are ordered and consumed as needed. An inventory specialist can walk through the storage racks each morning and compare the company's next-day needs with existing stocks so that material requirements for the following day are downloaded via a wireless network to a hand-held computer. No formal purchase order is written. Following receipt of the e-mail, the supplier reviews the requirements and verifies the ability to fill the order. If Wausau is temporarily out of stock of an item, the buyers are notified so they can purchase from an alternate source.

The remainder of the order is filled by the prime supplier and delivered the following morning. At delivery, the inventory specialist physically verifies receipt of each item as it is unloaded from the truck, using the vendor's packing list. Once delivery is complete, the signed packing list is forwarded to accounting.

"The hidden advantage of daily deliveries is clearly demonstrated when one realizes that instead of carefully placing each received item in a bin, the delivered steel remains in a common area, on the floor," says Schulz. "As the various departments need the items, they are retrieved from the common area, and by day's end, the area is cleared."

At month's end, the service center sends a single statement with each day's shipment shown as a total. This value is compared, by accounts payable, to the shipment value shown on each packing list, and a single check is written to the supplier for the month's statement. "Using this process has eliminated substantial nonproductive hours from the work week," says Schulz. "There is no keying of either purchase orders or of receipts, no hours are spent putting away stock or retrieving it as requisitioned, and there has been a 96% reduction in the cost of accounts payable invoice review and processing."

roger schulz admits he's "hardly the first guy to go to a true just-in-time daily delivery" for manufacturing raw materials. However, the purchasing manager for the Snow and Ice Division of the Monroe Truck Equipment manufacturing company in Monroe, Wis., reckons his purchasing program for steel structurals—bars, channels, angles and rods—may be somewhat unique in that he uses no purchase orders, no receivers and no invoices. And, because of that, "a lot of nonproductive effort by buyers has just disappeared."

At various other companies, veteran steel buyer Schulz lived through the transformation of the purchase order from "a stark, minimal data paper in the 1960s to the well-drafted, court-ready document in the 1970s and 1980s to today, where we don't even write one."

E-mail buying saves time and money, says Roger Schulz, purchasing manager at Monroe Truck Equipment’s Snow and Ice Division.

Historically Monroe Truck Equipment used purchase orders to buy routine items such as structurals. "I considered the amount of labor being used on a daily basis to do this, and then went through the standard reaction of 'let's order more, less frequently' which met with tremendous resistance from the shop floor, because I didn't appreciate the uniqueness of 'the pile in the middle of the floor'," says Schulz. That's because Monroe's end products are manufactured using various different kinds of structural steels—325 different sizes, shapes, grades and lengths.

Of these 325 items, eight equal 30% of the annual piece count in any given year so that, in many cases, the buyers may order only a single piece of the remaining 317 parts. "Maintaining any significant stock level of these rarely used items would be counter to the logic of inventory management," Schulz says. "Consequently, we order and receive our structural needs on a next day on just-in-time basis. On any given day, our order may include from five to 20 different steel items, each with an elaborate description, and may total up to 100 individual pieces." The need then became, not the metal, but a better way of buying the structural pieces with less wasted effort. The answer actually became using a single new supplier—Wausau Steel, a service center in Wisconsin—which proved to be willing to work with Monroe's buying team as primary supplier to set up a more efficient system of managing transactions. "We furnished Wausau with historical use data and especially frequency of order of the individual items," says Schulz.

Structurals items typically are ordered and consumed as needed. An inventory specialist can walk through the storage racks each morning and compare the company's next-day needs with existing stocks so that material requirements for the following day are downloaded via a wireless network to a hand-held computer. No formal purchase order is written. Following receipt of the e-mail, the supplier reviews the requirements and verifies the ability to fill the order. If Wausau is temporarily out of stock of an item, the buyers are notified so they can purchase from an alternate source.

The remainder of the order is filled by the prime supplier and delivered the following morning. At delivery, the inventory specialist physically verifies receipt of each item as it is unloaded from the truck, using the vendor's packing list. Once delivery is complete, the signed packing list is forwarded to accounting.

"The hidden advantage of daily deliveries is clearly demonstrated when one realizes that instead of carefully placing each received item in a bin, the delivered steel remains in a common area, on the floor," says Schulz. "As the various departments need the items, they are retrieved from the common area, and by day's end, the area is cleared."

At month's end, the service center sends a single statement with each day's shipment shown as a total. This value is compared, by accounts payable, to the shipment value shown on each packing list, and a single check is written to the supplier for the month's statement. "Using this process has eliminated substantial nonproductive hours from the work week," says Schulz. "There is no keying of either purchase orders or of receipts, no hours are spent putting away stock or retrieving it as requisitioned, and there has been a 96% reduction in the cost of accounts payable invoice review and processing."