Hendrick Motorsports Leads The Pack With Innovative Asset Management
EP Editorial Staff | July 1, 2006
This article is a follow-up to MARTS 2006, where the emphasis was on the never-ending race for reliability. The Hendrick Motorsports and Invensys/Avantis teams were a very important part of the event’s success. Among other things, they brought in Jeff Gordon’s Car 24 and helped sponsor the keynote and wrap-up sessions featuring Fox Sports’ commentator, Jeff Hammond. Their participation is greatly appreciated.
Whether you’re racing the clock to meet production schedules or racing cars to the checkered flag, asset management can give your organization the competitive edge. It can improve equipment reliability, streamline operations and reduce operating and inventory costs by hundreds of thousands of dollars.
Just ask the folks at Hendrick Motorsports. This company is in the business of winning NASCAR races and innovation has always been a driving force.Hendrick’s current application of Avantis enterprise asset management technology for NASCAR racing is one of the most recent examples of that innovation.
On its 65-acre racing complex in Charlotte, NC, Hendrick Motorsports designs, tests and builds racecars for such noted NASCAR drivers as four-time champion Jeff Gordon, twotime champion Terry Labonte and (as this magazine goes to press) the current points leader, Jimmie Johnson. Since 1984, Hendrick has grown from a one-car race team to a sixteam operation that has won five of the last nine NASCAR Nextel Cup (formerly Winston Cup) Championships. These include four backto- back titles–the sport’s first-ever in the premier Winston Cup Series.
Hendrick’s manufacturing complex encompasses six separate buildings, each with its own inventory warehouse. These include individual racing team facilities, such as the 24/48 Shop (Jeff Gordon/Jimmie Johnson); the 5/25 Shop (Kyle Busch/Brian Vickers) and the Busch Grand National Team Shop, as well as the engine shop, body shop and chassis shop. Each car must be tested and modified for optimum performance on varying racetracks. Parts that are used and replaced must be monitored, and the performance of different racecar configurations must be documented.Hendrick Motorsports had been performing all of these activities manually, which was tedious, time consuming and costly.
Scott Lampe, chief financial officer at Hendrick Motorsports (HMS), is responsible for ensuring that the organization is optimizing resources to maximize performance and cost efficiencies. Toward this end, he has implemented the Microsoft Business Solutions Solomon financial system and his new challenge was to integrate a compatible enterprise-wide system that would manage inventory, track parts usage, and maintain an historical profile of how cars performed with different configurations. Accomplishing this required overcoming challenges in three main areas.
First was the fact that each of the six warehouses operated as an independent entity. Warehouse managers would manually do their own inventory assessment, requisitions, purchase orders, expediting, receiving and submission of invoices for payment.
When a part was requested, the manager would go into the warehouse and locate it. If the part were out of inventory, the manager would call other warehouses. If they had it, the person requesting the part would have to travel from his shop to pick it up, which was a time consuming process.
Trackside monitoring and tracking of parts presented a second set of challenges.
There are approximately 80 components on each car that need to be monitored by condition (when a component reaches failure condition), or usage (cycles or revolutions of engine, laps of track, etc.). This is critical to maximize utilization of each part without jeopardizing performance.Keeping detailed manual records of this voluminous data became a very time consuming and intensive responsibility. As a result, capturing this data was prone to errors, which affected accurate analysis.
The third challenge was the need to monitor usage of each part to assure performance reliability. HMS substitutes parts at the track to accommodate changing conditions. Each part has a racing life based on a number of criteria including laps, miles, engine revolutions, or other basis. The organization needs to be able to track these metrics in order to determine when a part should be replaced. This process is complicated by at-track changes that can occur during the race weekend. For example, a team will switch gears or shocks several times to find the winning combination.
The successful solution
Supported by his company’s culture of innovation and continuous improvement, Lampe looked into implementing an enterprise asset management system. After reviewing the feasibility and options available, HMS chose Avantis.
The initial focus was on establishing a central inventory management system to document the inventories available in each of the six warehouses. By centralizing and automating inventory management, each team now has online access to a single inventory database available throughout the Hendrick complex.
“Since the Avantis solution is Microsoft-centric, it readily interfaces with our Microsoft Business Solutions-Solomon financial system to seamlessly track transactions from initial order to end use and boosts efficiency by providing real-time data access.What this solution accomplished with a single system, could have taken us four separate systems,” says Lampe.
In addition to the resulting direct cost savings, HMS realizes a projected cost savings from not having to add resources.”We anticipate a 10% increase in parts orders this year,which would have required additional resources in purchasing, accounting, warehouse management and work order deployment. This would have added up to more than $175,000,” says Lampe.
Racing against the clock
HMS also faced the challenge of time. Its new asset management solution had to be up and running within four months of the August contract signing. December and January are the busiest months for HMS. All testing, including validating and implementing new designs, is done during these months. Purchasing activities are more than double what they are the remainder of the year.
The Avantis InRIM™ (Industrial Rapid Implementation Methodology) made it possible to meet the critical deadline by cutting implementation time in half compared to competitive systems. This proprietary methodology is a very structured and organized approach that accounts for every detail and defines the parameters of implementation activities, as well as responsibility, timeline and deliverables.
Having met the critical December deadline, the Avantis team moved on to work with the 24/48 team to address parts and configuration tracking. The selected solution allows monitoring of approximately 80 components on more than 30 cars of the 24/48 team. HMS can now readily track the configuration of the vehicle specified for the race and changes made during practice before the race. At the end of the race the team has a well-documented history of the vehicle configuration. This allows HMS to duplicate the configuration if the car finished first–or make necessary modifications if the car needs improvement.
Avantis also facilitates tracking the use of parts to assure reliability. HMS’ general practice is to substitute parts at the track to accommodate existing conditions.When a part is replaced, it is identified and assigned a use value. The Avantis solution now allows HMS to accurately track component usage to assure parts reliability. “We achieved an immediate $60,000 savings by integrating this asset management solution with our existing business operations.Within nine months we reduced our cash outlay by $400,000 by optimizing our inventory procedures. But even more important than cost savings and cash flow is that we have data to make more informed business decisions. This is priceless,” says Lampe. MT
For more information on Hendrick Motorsports, visit www.hendrickmotorsports.com