November 2010- Don’t skip out early during one of Klein Steel Service Inc.’s facility tours. Because, according to Todd Zyra, vice president of operations, the company saves the best view for last. This highly efficient wow-factor is a honeycomb storage and retrieval system from Kasto Inc., Export, Pa.

The system’s sheer size is what visitors enjoy most, Zyra says. "When customers come in, they’re always blown away by the honeycomb storage and retrieval system. It just shows how state-of-the-art we are," he says.

Klein Steel operates service centers in Rochester, N.Y.; Buffalo, N.Y.; Syracuse, N.Y.; and Watervliet, N.Y. Before the Rochester location began construction, owner Joe Klein decided to use Kasto’s storage and retrieval system. Zyra notes the company designed its current building to accommodate Kasto machines. This sparked a strong relationship between the two companies that continues today.

Perfect match
Kasto’s development began long before Werner Rankenhohn, president, and Joe Klein first talked business in 2000. About 166 years ago, business owner Karl Stolzer combined the beginning letters of his first and last names to create Kasto Germany, says Rankenhohn. Since then, Kasto Germany has grown exponentially with Kasto Inc., a U.S. subsidiary founded in 1975. That same year, Kasto began production of its first bandsaw, according to the company’s website. This led to the development of sawing systems, which were designed to feed material automatically to a saw and take the remnants back into storage.

"At the time, everybody else was trying to improve the actual cutting speeds and cutting feeds of a machine," says Rankenhohn. "If you have a fast machine, and the machine sits idle for half the time" while someone finds the material and brings it to the machine, "then the fastest machine doesn’t do you any good," he says.

The highly efficient sawing systems spawned a new product line, Rankenhohn notes. "Today, these are called bar storage and retrieval systems," he says. The honeycomb storage systems, used to manage bar and sheet metal inventories, are one of the main reasons Klein Steel initially was drawn to Kasto. Both Zyra and Rankenhohn agree the systems have reduced labor costs significantly, increased productivity speed and improved inventory accuracy for Klein Steel.

Cutting costs
Klein Steel also uses two horizontal saws and one miter saw from Kasto, but a large portion of its success can be attributed to Kasto’s honeycomb storage and retrieval systems. "Prior to the Kasto honeycomb system, we had a large loading crew," says Zyra. "We went from 16 people across two shifts to eight people on one shift," which helped with the company’s on-time delivery as well, Zyra says. He notes although there were no layoffs, the company was able to move workers to different areas in the facility.

Rankenhohn agrees this automated system is a huge improvement compared with Klein Steel’s previous methods of organizing and handling materials. "If a customer ordered a piece of steel from Klein Steel, somebody from their warehouse would go with a piece of paper and look through the warehouse to find it. Then someone had to wrangle this piece out of the rack and put it on a truck to be shipped to a customer," he says. "Today, they enter the sales order into their system, and their ERP system talks to our server, so their sales order generates an order in our system, and we bring the material to the operator." The operator then uses a crane with magnets to remove the order from the delivered cassette.

The Kasto system also saves space. "The system that Klein Steel has is approximately 50 feet tall, 145 feet long and 82 feet wide with 25 cassettes stacked on top of each other," Rankenhohn says. Per aisle, each shelf block has about 45 aisles per side for a total of 2,445 cassettes. "Each of those cassettes is capable of holding 5 tons, which gives a total capacity of approximately 26,895,000 pounds of steel stored on roughly 11,750 square feet. You really are using the vertical space," he says.

Klein Steel also has seen improvements in its safety record."When you have a machine doing the work instead of the people, there’s less chance of getting hurt," Zyra says. Rankenhohn notes conventionally run service centers operate overhead cranes, sideloaders and forklifts, and they sometimes result in accidents.

"In an automatic system, the machine does all the moving, so there are no accidents," Rankenhohn says. "We had other customers where their workers’ compensation premiums went from $500,000 down to $10,000 because the accidents simply did not happen anymore."

Accuracy is everything
Zyra says approximately 65 percent of the company’s material is stored in the Kasto system, while about 75 percent to 80 percent of the outgoing material is pulled from it. If the Kasto system went down, Klein Steel would have big problems, but Zyra isn’t concerned.

"We have never not been able to deliver due to this system. [Kasto] is very involved in preventative maintenance. They come here and do the preventative maintenance with us," he says. "They can log right into our system and see what parts are starting to fail by the error-message history. They are available around the clock. If we have any problems, we can pick up the phone and call them. If it’s just an IT problem, they can log right in to our IT, get into the system and fix it. They can do diagnostics remotely. If it’s a physical problem, they’ll be here right away to get it fixed."

Last December, after having Kasto’s systems in operation for about six years, Klein Steel did a physical inventory. The resulting numbers illustrate the systems’ value. "We were at 98.6 percent inventory accuracy within the system. The way that broke down is, we were actually 0.8 percent over and 0.6 percent under. So at the end of the day, we actually added inventory back," says Zyra. "Overall, it’s been phenomenal for us."

The inventory reached 1.7 million moves--meaning workers accessed the system 1.7 million times, either putting material in or taking something away, says Rankenhohn. "The inventory was off by a little less than $2,000. That speaks for itself," he says.

"We’re always exploring what they have to offer," Zyra says. "If they come out with new technology, we’re the first to review it and see if it makes sense for us." MM

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