Archive for 2015

Financial Intelligence – It’s Not Just for the CFO

October 21, 2015 by Josh

Here at Setpoint, we often tout our open-book-finance style of management. To us, open-book-finance means that key financial data is shared with each employee on a weekly basis. Sharing this information with employees isn’t a revolutionary idea per se but training employees to understand the information is. In order for Setpoint employees to maximize our contribution to the company, it is important that we understand how our jobs impact income, cash flow, expenses, losses, etc. So how do Setpoint employees learn to be financially intelligent?

Our CFO, Joe Knight, owns a separate business called the Business Literacy Institute. He travels the globe training Fortune 500 companies and their employees on the art of finance and accounting. Recently he took time to provide training to all project and department managers at Setpoint. The training consisted of 4 sessions. The first 3 sessions were dedicated to the 3 financial statements – the income statement, statement of cash flows and the balance sheet. The final session focused on principles of time value of money and return on investment. While finance is an important (and riveting) subject in its own right, what did the training do to make Setpoint better?

First, it helped everyone understand that their decisions affect our bottom line. But it went deeper than that. It helped everyone understand that their decisions and contributions affect cash flow, receivables, payables, inventory, COGS, expenses, etc. For example if the sales department doesn’t require sufficient down payments on new projects, we choke our cash flow and we may have to finance the project until we finish the job. If our procurement group doesn’t stage their orders correctly, our payables may outrun our receivables. If a project manager doesn’t manage his project efficiently we may make less per hour than we bid. Any of these examples can (and sometimes do) happen at Setpoint and they hinder our ability to run efficiently. The key for our employees is to understand that they are equipped with the knowledge that their actions impact the company.

The important take-away from this blog post is not the idea that you should only hire accountants or finance majors to work for your company. The important take-away is that every employee needs to understand how their job directly impacts the financial statements.

So what if your CFO doesn’t have a side business training Fortune 500 companies in matters of finance and accounting? That’s OK. Have someone in your organization, who understands your financials, train your people. Get your employees to understand your numbers and you will have a more financially intelligent company.

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Lean Ammunition Manufacturing Part II

March 11, 2015 by MarkC

Today’s brass case factories operate on the principles of traditional mass production techniques, developed in the early 1900’s.  In an effort to maximize efficiencies, machines are grouped in common departments, turned up to run as fast as possible and large inventories are used to buffer inconsistencies.  Machines are difficult to set up and adjust.  Specialized technicians are required to make changeovers, sometimes taking several days.  High inventory levels drive slow process speed, with as much as 4 Months inventory from beginning to end.  It’s impossible to stop production if a defect is discovered; it’s easier to add 100% inspection at the end of the process.  Lastly, today’s ammunition plants are loud and earplugs are required everywhere on the shop floor. It’s impossible to have an understandable conversation.

Setpoint has designed a brass case U shaped cell (shown below) that positions the operator on the inside and available to service all machines.  All tooling and equipment needed to produce a brass case, from first draw to final anneal, are positioned around the U.

Setpoint Case Line

Starting with first draw, brass cases are sequentially processed through each machine until the case is completed.  It is designed to hold 15-30 minute buffers between each machine and takes approximately 4 hours to complete a case from beginning to end.  Including 4 anneal and 5 individual wash operations.

Quality is monitored using statistical process control (SPC) sampling plans at an inspection table in the middle of the cell.  Adjustments are a snap with servo linear actuators.  When a machine requires an adjustment – the operator simply enters an offset on the touch screen and the dimension is adjusted without stopping the machine.  Capabilities of 6 sigma or better are common with this servo actuated technology.

Each machine is designed with versatility in mind.   The cell offers optional calibers between .223 through .338 Lapua.   Quick-change concepts have been incorporated, similar to the early days of Toyota.  Each machine is capable of 30 minute or less changeover from one caliber to another.

An intriguing aspect for the cell is lack of loud noise, having employees engaged in the continuous improvement process is mandatory in any lean organization.  Conversations are possible inside the cell without yelling through earplugs.

Labor content is low.  The inside operator tends all machines and conducts SPC inspections.  An outside operator monitors hardness testing, chemistries and minor machine maintenance.  Status lights (Andon) are on each machine providing quick operator feedback when machines need attention.  It’s also important to note that overhead support for the cell is significantly less than traditional manufacturing layouts.  This is because a connecting process using a cell requires less production control, less process/quality engineering and less production supervision.

As with the auto industry in the 1980’s, it’s time for a lean revolution in the brass case ammunition world.  Improved quality, low inventories, agile/versatile capacity, lower operating costs, lower overhead costs, clean processes and a quiet production environment are a few of the benefits.  Join the revolution, call Setpoint Systems at (866) 532-6856, or check us out online at

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Lean Ammunition Manufacturing Part I

February 4, 2015 by MarkC

Mid-way through my high school years my dad bought a new 1974 Chevy Vega.  It was his attempt to buy a small fuel efficient vehicle.  For my brother and me it was an imaginary sports car.  It was a fun car; however it was disappointing to find out that at 40,000 miles it was ready for the scrapyard.  It was an era when auto makers were more interested in selling cars then providing quality.  In the end, our Vega’s aluminum bore – 4 cylinder engine burned more oil than gas, doors sagged, the clutch slipped, wheel bearings whined, and many interior components stopped working all together.  Fact is, it was not uncommon for cars of that period to reach the end of their life before 100,000 miles.

The Vega, and other cars of the day, was a product of a highly refined mass production system.  From its inception by Henry Ford in the early 1900’s, mass production served the auto industry and consumer well.  Low manufacturing costs made it possible for nearly every household in America to own a car.  The downside was not every household owned a high quality, reliable car.

At the end of WWII Toyota lacked the required capital to support the growing post war car market.  One unique problem was their shortage of stamping presses in the body works group.  At that time automakers typically had dedicated presses with a single die, avoiding complex changeovers.   Toyota’s lack of capital prohibited this investment.   Toyota leaders focused their efforts, during the fifties, on developing basic single minute exchange of die (SMED) techniques used today.  They were able to reduce changeover times for a high tonnage press from days to minutes.  Fast changeovers quickly lead to releasing small lots.  Small lots meant low inventory and low inventory brought about the early discovery of defects, making it possible for Toyota to establish their “stop the line” policy when defects are discovered.  In essence, lean operated on the tenants of simplicity, elimination of waste and continuous improvement.

From 1950 to 1979, consumers added quality and reliability to their car buying checklists when buying small, fuel efficient cars.  By 1980, shortly after the Vega went out of production, 25% of the global market shifted from American to Japanese automakers.   American automakers were compelled to change or die, and “Lean Manufacturing” was the catalyst.   Ultimately lean offered a dramatic quality improvement.   A revolution in America soon began as auto makers quickly embraced lean manufacturing techniques.

Today the ammunition industry is ready for a similar revolution.

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