Success with MRPII & ERP software
By Rebecca Reid, managing editor
Collecting and analyzing data about manufacturing processes using manufacturing resource planning (MRPII) software has helped many plastics processors determine where they can be more efficient....
Collecting and analyzing data about manufacturing processes using manufacturing resource planning (MRPII) software has helped many plastics processors determine where they can be more efficient.
But an equal number of processors have sworn off the technology after losing piles of money on systems that were poorly implemented and ineffective.
Vendors of MRPII and enterprise resource planning (ERP) software say the blame lies on both sides. Some vendors, especially those selling generic ERP packages are guilty of not understanding plastics processing; but the processors are guilty of rushing implementations, not taking the time to choose the right vendor, not clearly articulating their needs and not dedicating enough resources to the project.
In the end it comes down to several factors: The right software, a well-organized implementation and proper training.
MRP VS. MRPII VS ERP
First, it’s important to make a distinction between MRP, material resource planning, and MRPII, manufacturing resource planning.
Randy Flamm, president and founder of IQMS Software in Pasa Robles, Calif., said MRP was a method for managing raw material consumption, and MRPII came about to determine how many resources, such as labour, machinery and time, would be needed to complete a job.
ERP — enterprise resource planning — on the other hand integrates other aspects of the business from supply chain management (SCM), customer relationship management (CRM) to financials and human resources.
Companies today, Flamm said, should be thinking in terms of ERP, not MRPII.
“What we see today is that many companies may have many dissimilar systems,” he said. “They might have a system that just does EDI (Electronic Data Interchange) and hardly talks to the sales order systems, and have different systems for accounting, quality control, and production. [These] might have four or five databases that overlap or store some of the same as well as different information,” he said.
“With a single system you can trust the data more,” he added. “We’ve had more customers coming back and touting the efficiency that comes from a single-source, single database system.”
But getting to a single-source, single database system isn’t easy — especially for small companies.
The best way for small companies to get into ERP is to implement incrementally, said Daniele Fresca, director of marketing at IQMS.
“We have a system they can implement in modules,” she explained. “You only have to pay for the base system once, then you can implement other features like EDI, as needed, later on.”
But even successfully implementing these base systems is a struggle for plastics processors. Pierre Maillet, president of CyFrame Inc. in St. Laurent, Que., said the overall failure rate within the plastics processing industry is about 50 per cent, but CyFrame has managed to lower its failure rate to less than five per cent by only working with customers where there is a high chance of success.
In particular, if the president, owner, or key management figures are not on board with the project, or are divided about which vendor to go with, then there’s no point in even commencing the project, he said. These are clear signals the project will fail.
Jacob Aharon, president of PlastiSoft Corp. in Toronto, a provider of ERP for the flexible packaging industry, agreed, and pinpointed other mistakes processors are apt to make.
First, they don’t choose vendors that understand their business, and they tend to focus too much on the financial capabilities of an ERP application rather than on the data collection and analysis capabilities for manufacturing processes.
“Accounting doesn’t make you money,” he said. “What makes you money is what is happening on the shop floor.”
Secondly, after selecting the vendor and doing the initial implementation, ERP will take a backseat to other projects and the day-to-day operations of the plant, he noted.
“Always keep the project on a high level and make sure [everyone] participates in it,” he advised. Further to this, processors should avoid implementing ERP themselves; instead, they should involve the ERP vendor in implementation.
“The ERP vendor has to be very involved, meaning they should put in between 300 to 500 man hours into a typical implementation project that spans between six and eight months, typically,” Aharon noted.
CyFrame’s Maillet also emphasized vendor involvement.
Processors must partner with their vendors for their implementation to be successful. This means allowing the vendor to spend several days ‘walking in their shoes,’ he explained.
Maillet said it’s difficult to tell a processor how much money they can save without examining their manufacturing and business processes. And further to that, it’s crucial the vendor understand the plastics industry.
In fact, companies that target and tailor their packages to the plastics industry all have founders with backgrounds in the industry.
Maillet learned the industry from his father, who founded Thermoplas, which is now owned by the Woodbridge, Ont.-based Royal Group Technologies Ltd.
Randy Flamm, president of IQMS, has worked in the plastics industry since 1974 in both injection molding plants and as a technical service manager at GE Plastics, where he started developing ERP functionality for plastics. He eventually started IQMS in 1988.
“ERP should be industry-specific to support the unique aspects of extrusion and injection molding,” he said. “There are quite a few specific functionalities like family tooling, or effectively handling regrind and virgin materials [that aren’t built into generic ERP packages].”
A product already tailored to plastics processing requires less customization than generic packages.
MORE THAN SCHEDULING
Putting too much emphasis on scheduling is another big mistake plastics processors can make, Maillet said.
“Scheduling is only about five to 10 per cent of the benefits,” he explained. In reality, the possibilities vastly exceed scheduling and allow processors to integrate with customers and suppliers over the Web, automatically processing orders and requisitioning materials. Processors can track inventory, shipping, as well as scheduling and tie all the data into the financial component of ERP to put a dollar value on each action and transaction.
ITW Deltar and ITW Plastic Moulded Components operate in conjoined facilities in Concord, Ont. ITW Deltar has about 40 employees and 15 injection molding machines, while Moulded Components has roughly 20 employees and 20 injection molding machines. Both companies are being run on the same ERP implementation, EnterpriseIQ from IQMS.
Even though ITW is a multi-national company with hundreds of facilities worldwide — not all in plastics — there is no corporate standard for ERP; each facility is left to its own devices to choose its software.
Frances Peters, quality system manager at ITW Deltar has become the de facto administrator of the ERP system for both ITW Deltar and Moulded Components since the facilities first implemented a DOS version of IQMS in the mid 1990s.
By the year 2000, the firm had upgraded to IQMS’ Microsoft Corp. Windows-based system, EnterpriseIQ, which runs on one server at the facility. In comparison, the DOS-based system required its own building where it ran on an archaic computer.
Every business process from order entry, production, inventory control, accounting, shipping preventative maintenance is managed through EnterpriseIQ, Peters said.
For order entry, data is gathered through EDI (Electronic Data Interchange), and the orders come through a value-added network (VAN), maintained by provider Sterling Commerce.
“[Sterling] keeps the mailbox for you. All our [customers] send orders to our ‘mailbox’ and then we pick up the ‘mailbox,’ so we only have to go to one place for all the companies we de
al with,” she explained. “IQMS [EnterpriseIQ] takes that information and presents it on a display and then we hit the convert buttons and it converts the order. A lot of orders are done that way but we still have to input orders manually sometimes.”
Although production can be allocated automatically, Peters said ITW’s operators prefer to maintain control over scheduling themselves. Due to the way ITW uses EnterpriseIQ, the automated scheduling feature does not account for the amount of inventory ITW houses and thus schedules jobs for too many parts.
But while MRPII and ERP are more than just scheduling, vendors are still improving their products’ scheduling abilities in response to customer demand.
At the National Plastics Exhibition (NPE) 2006 in Chicago in June, DTR Plastics Solutions, a business unit of Jacksonville, Fla.-based Made2Manage Systems released its Master Scheduler application module that is specific for the plastics processing industry.
Master Scheduler is more than just a production allocation tool, Perry Williams, general manager of DTR Plastics, explained. In a nutshell it assists planners and schedulers with managing inventory levels, optimizing shop floor resources and meeting promised delivery dates.
The three types of schedules — forward-finite, queued and backward-finite — are created by Master Scheduler for all of a processors’ workstations and secondary operations.
Forward-finite scheduling calculations start with the current date; based on available resources, when can the job be completed? Backward-finite scheduling calculations start with a part due date; based on that due date, when does molding need to start? Queued scheduling is similar to forward finite scheduling, except that the requested order in which the user wants the work orders to schedule on a workstation is enforced, with no exceptions.
When a job order is entered into the system, Master Scheduler interfaces with the data from DTR Plastics’ ERP system and performs actions to ensure the job can be finished in the time frame the customer demands. It can automatically check inventory levels to determine whether there are enough raw materials to process the required number of parts; if not it can automatically generate an order for the materials and send it to the supplier. It can also check availability of molding machines and schedule jobs to ensure the most efficient use of resources.
And because Master Scheduler displays relevant scheduling data on a colour-coded graphical interface, plant managers have a quick and easy way to monitor operations.
Additionally, Master Scheduler flags troublesome schedule items allowing plant managers to quickly identify and resolve these issues before they cause significant problems.
Other recent developments in the industry include Richmond Hill, Ont.-based ERP vendor CMS Software’s acquisition of Mattec Corp., Loveland, Ohio, a provider of manufacturing execution systems (MES).
Users will be able to download job and process standards, production schedules and other information from CMS’ CMSi5 and CMSm5 ERP systems, while Mattec’s ProHelp will provide production data, scrap reports and machine downtime directly into the ERP system.
Mattec and CMS said this would reduce the likelihood of errors because redundant data entry operation will be eliminated. Plus, more employees will have access to the data in a timelier fashion.
Mattec will continue to support its customers that integrate into ERP applications from other vendors, Mick Thiel, president of Mattec, noted.
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