Don't Give Up The Ship

Have you ever opened your toolbox to discover that the instrument you're looking for is missing? That requires rummaging through your garage, cellar or shed and then - eventually - making a costly trip to the hardware store. Multiply that problem by 15,000 tools and you'll understand why Todd Shipyards of Seattle, WA, needed a better equipment-tracking system.

Commercial shipyards expect a regular attrition of equipment because any tool dropped into the deep water is gone forever. But Todd Shipyards was losing close to $500,000 annually in tools that were not being returned to the company's tool crib. With no computerized tracking system, Todd could not pinpoint what was happening to the tools.

Competitors Back Down From Challenge
When Todd Shipyards' managers began searching for a solution to this problem, they called Barcodes West. Established in Seattle in 1982, Barcodes West specializes in automatic data collection and label and tag manufacturing. The 70-employee company, which also maintains a Midwest facility in Chicago, posted $13 million in sales in 1998.

As a manufacturer and provider of various labels, Barcodes West regularly provides harsh environment labeling solutions to customers. However, Dana Milkie, Barcodes West sales and marketing manager, knew from the outset that the Todd Shipyards' dilemma was unique. "The challenge of this application was that labels on the tools would see a great deal of grease, paint, water and all that goes along with a shipyard environment. They get a lot of abuse," Milkie said. "Also, we didn't have a lot of area on some of the smaller tools where we could put a label."

The Todd Shipyards situation was so complex that some competitors actually declined to submit a bid after researching the job. "It's my understanding that two companies said it couldn't be done," Milkie said. "We've never had the attitude that it couldn't be done. It may take us some time to find the solution, but we will find it."

Barcodes West determined that the best system would include 1¼ -inch by ¾-inch bar-coded colored labels on every tool. When removing a tool from the tool crib, employees first scan the tool bar code. Then they scan their personal bar code located on their helmet or employee identification badge. The information is cross-checked when the tool is returned at the end of the shift. The bar-code system was integrated with Intermec 3400 printers, Intermec 9445 handheld scanners and software designed internally by Todd Shipyards.

That was the easy part. Milkie said obtaining and testing suitable harsh environment labels from Barcodes West vendors was more difficult. "In harsh environment labeling, you're not going to get it right the first time," Milkie said. "So you work closely with your vendors and get recommendations from them." Barcodes West tested materials at Todd Shipyards for a three-month period. Barcodes West produced a small test run of 500 sample labels, which they placed on a variety of tools at the shipyards. As Milkie expected, the first adhesive material was not effective; many labels fell off after three weeks. "We knew going in that we needed more than just one solution," Milkie said. "The second adhesive was rubber-based acrylic. It was thicker and adhered to the tools better."

Choosing Helpful Vendors Crucial For VAR Success
Milkie noted that Todd Shipyards saved an estimated $200,000 in equipment shrinkage for the six months after the labeling system was installed. "That's huge," said Milkie, who added that the labels cost less than 10¢ each. "I've never seen a harsh environment labeling application that made that dramatic an impact." Milkie said the only training Barcodes West needed to provide was specific printer instructions to the toolroom supervisor. Todd Shipyards integrated the new system into its current employee tracking system.

Despite others' initial speculation that solving Todd Shipyards' problem was impossible, Milkie said this was a "textbook harsh environment application. Sometimes it can take four, five or six different testing materials before you get it right. A perfect application would have been just one test, but it's not a perfect world in harsh environment labeling."

Because of those time-consuming challenges, many VARs avoid harsh environment labeling, said Milkie. "I see VARs not going after the harsh environment market, and I see that as a mistake. Yes, you have to have some knowledge of harsh environment labeling. But it's more critical to ask the right questions and partner with the right vendors who can actively get involved in solving your issues."

Milkie said harsh environment labeling allows for creativity and wider margins - on time restrictions and profit. "We work with our customer's engineers, who understand the challenges involved, towards a common goal," Milkie said. "They allow you time to get the proper testing done. And they will be willing to pay for the time that you spend being creative and solving their problem. If I were a VAR and had time to invest in an opportunity, I would invest in an area where I could be profitable. Harsh environment labeling is that area."