Management Information Systems Discussion
ERP Case Study I
Founded in 1992, Polymer Extruded Profiles (‘PEP’) began with one employee and one extrusion machine in a simple 3,000 square foot facility. Today, Custom Profile boasts 150-plus employees, 13 extrusion lines, comprehensive secondary operations, a finishing department and two manufacturing plants (Tempe, Arizona and Acapulco, Mexico) that run 24 hours a day. PEP provides specialized extruded plastic products to the appliance, furniture, point of purchase and marine industries with an emphasis on design support, quality assurance and in-house tooling.
PEP was in growth mode. They had recently moved into a newly constructed building, and the company was continuing to expand and hire new employees. But as its extrusion business naturally developed, it became painfully clear that their enterprise software was failing to support its basic needs.
If three’s a company and four’s a crowd, then PEP was certainly feeling mobbed trying to run a competitive business through four different software systems. A combination of homemade software, MS Access™ databases, Intuit QuickBooks™ and MS Excel™ spreadsheets was resulting in several system crashes a day and costly data entry errors from duplicate information entry into both Access and QuickBooks.
Additionally, customer service was struggling as sales orders took a costly amount of time to produce due to a lack of easy access to accurate production data, plus shipping was cumbersome, delayed or inaccurate. In short, the pieced-together legacy systems did not support the basic needs of a growing business.
PEP’s top requirements in a new system included highly configurable modules that could manage increased business transaction volume, detailed and easily configurable manufacturing Bills of Materials (BOMs) specific to the profile extrusion process and a business management system that provided an integrated platform with the infrastructure to support continued growth.
The firm was looking specifically for efficient perpetual inventory and BOMs, instant access to data required to meet customer requests for information and requirements. The expected Return on Investment was:
• Saved time and prevented errors with simple connections in all steps of the process, from packing slips to invoicing
• Improved inventory control and tracking with engineering change order flexibility
• Simplified budgeting and capacity planning with forecasting tools
• Enhanced warehouse management with advanced tracking capabilities
• Streamlined shipping and inventory visibility
• Eliminated manual record keeping tasks
• Removed redundant data entry and the unavoidable mistakes inherent in patchwork systems
Moving Beyond the Core ERP
In addition to the EnterpriseIQ core ERP system, Custom Profile installed IQMS’ Electronic Data Interchange (EDI) solution. Unlike other ERP systems that require bolted-on third-party programs in order to obtain increased functionality, the EnterpriseIQ system is comprehensive, requiring no cumbersome interfaces or expensive customization to access the necessary programs.
With the ability to now automatically and seamlessly translate incoming orders directly into EnterpriseIQ with EDI, as well as generate outgoing files and advanced shipping notices (ASNs), order entry time and data entry errors have been significantly reduced. Inbound and outbound EDI saves Custom Profile an estimated $35,000 annually in data entry time. EDI also has allowed Custom Profile to carry out their company goal of a rapid response from quoting to delivery of product: They run EDI several times in the morning and then assemble and ship products the same day.
Custom Profile also decided to implement EnterpriseIQ’s robust warehouse management system (WMS). By equipping personnel with hand-held scanners and labeling inventory items accurately with barcodes, Custom Profile has virtually eliminated shipping errors. They reduced labor required to ship product by one person, resulting in an increased on time delivery rate of 99.99+ percent and zero shipping errors due to incorrect shipped items or quantities for three consecutive years.
Finally, Custom Profile invested in IQMS’ RealTime™ Production Monitoring system to track work center production on some of its machines as it occurs in real time. By directly communicating with its machines, Custom Profile receives immediate details on all aspects of production and takes control of the plant floor with improved visibility, accuracy and accountability. To supplement its customer service efforts, Custom Profile has set up its system to deliver exception reports in real time so it can respond to customers in a timely manner when requests or requirements fall outside the typical business process or cycle.
Continuous Improvement and Best Practices
Today, Custom Profile can fully see how its entire business is connected, from new program launch through order entry to product shipment. In fact, Custom Profile employees can’t envision where the business would be without EnterpriseIQ. Employees utilize the ERP system as a rallying point to clean up business processes and they hold each other accountable to follow the company wide systems and procedures that have been established.
“I frequently remark that there are two or three ways to accomplish a task or objective utilizing IQMS and our responsibility is to select the method that works best for our current systems and processes,” said Sweers.
Continuous improvement never ends at Custom Profile. Learning and growth with the EnterpriseIQ software is an ongoing process, and Custom Profile integrates new EnterpriseIQ functionality often, complete with improving their knowledge and application of the ERP system as a tool in their business processes. Concurrently, Custom Profile incorporates new functionality typically recommended by the IQMS user community and maintains frequent software updates.
Encouraged by the longevity of the system compared to the industry average (some clients have been with IQMS for more than 20 years), Custom Profile expects continued company growth and expansion in the coming years and is confident that EnterpriseIQ from IQMS will grow with them.
1. Would a IS (Information System) migration be needed? Did PEP previously run their business supported by IS? Which platforms can you recognize? How would you prepare upfront for a successful migration? Which aspects do you need to consider when forecasting migration expenses? In addition, what, as a manager, might concern you about the migration?
2. Which modules has PEP implemented beyond the core ERP and how does it benefit from the additional investment?
3. What are the typical struggles for a growing company? How does the ERP implementation go about it and what are the expected benefits?