Key Gas Components ERP Case Study

The Challenge

Key Gas Components, a family-owned manufacturer of high-quality gas train components for OEMs, operated two large-scale plants - 35,000 sq ft in North Carolina and 50,000 sq ft in Michigan. Their legacy ERP system lacked the comprehensive business management features and real-time data necessary to effectively oversee inventory, job costing and production. This resulted in operational inefficiencies, delayed decision-making and challenges in meeting the demands of high-volume production runs, which can reach up to 500,000 parts. The inability to access timely, accurate information limited their capacity for process improvement and growth.

The Solution

Recognizing the need for a robust, integrated solution, Key Gas Components selected Global Shop Solutions ERP software for its comprehensive features - shop floor data collection, inventory management, job costing, CRM and customization. The decision was driven by the need for real-time visibility across operations and the ability to analyze and act on actionable data. According to Henderson Cathcart, National Sales Director, "For example, we regularly use the standard Work Order History screen in combination with a custom 'Work Order Variance' Crystal report to summarize and analyze job costing data. That way, we can quickly see whether costs are over or under estimates, by how much and take appropriate action if necessary." The implementation of the ERP system enabled the company to monitor production performance, control costs and manage inventory with a new level of accuracy and efficiency. "This has given us a firm grasp on our costs for every job, and we use this knowledge to price our products competitively and eliminate those products where we aren’t competitive."

The Results

After the implementation of Global Shop Solutions ERP, Key Gas Components achieved remarkable operational improvements. Sales grew by 53% without adding staff or increasing overhead, thanks to enhanced manufacturing, scheduling and inventory control. The company successfully managed large production runs - up to 500,000 parts - while maintaining tight control over margins. "When you’re making 500,000 parts, a half-second variance can make the difference between a 2% margin or 25% margin. The ability to precisely track cycle times helps control costs and keep our margins where they need to be. This is just one of the many benefits derived from having access to reliable shop floor data," noted Henderson Cathcart. Lead times were reduced, enabling faster deliveries to customers and supporting growth from existing accounts. "We’ve been able to grow sales in large part because our manufacturing, scheduling and inventory control are now so well managed that we can fit in more production without adding overhead. We’ve also cut lead times, which helps get parts to customers faster. As a result, much of our sales growth has come from existing customers." The ERP system empowered Key Gas Components to operate more leanly, make data-driven decisions and reinforce their reputation for innovation and reliability in the manufacturing sector.