Excellence times three: Epicor ERP drives savings for vertically integrated electronics manufacturer
A new ERP implementation has seen Haslingden, U.K-based intruder alarm manufacturer Texecom achieve a £2m boost to its cash flow less than a year after its go-live date—even though requirements were complex. Texecom is highly vertically integrated, with three sites that embrace plastic injection molding, printed circuit board assembly, and final product assembly.
A new ERP implementation has seen Haslingden, U.K-based intruder alarm manufacturer Texecom achieve a
The solution, implemented in just four months, saw a previous financials-based system that had been buttressed by a variety of niche applications and spreadsheets—including no fewer than three plant-level sales order systems—replaced by an integrated end-to-end ERP offering from Epicor that dramatically improved both business processes and manufacturing visibility.
The starting point, says Andrew Bowden, head of information technology (IT) at Texecom, was the acquisition of the business by fast-growing U.K.-based mini-conglomerate Halma Group in November 2005. The new owners quickly recognized the extent to which the Texecom business was being held back by the lack of an appropriate IT infrastructure, and launched a year-long review of alternatives—beginning with a “long list” of 20 potential vendors.
The requirements were complex. Texecom is highly vertically integrated, explains Bowden, and its three sites embrace plastic injection molding, printed circuit board assembly, and final product assembly.
“By designing and building all our printed circuit boards in-house, not only must we ensure that we have all the required components available, but we also have to schedule them accurately through six multipurpose lines, each of which needs to be configured on a product-by-product basis,” says Bowden. “Minimizing changeover times has to be balanced against optimising batch quantities as well as reacting to short-term changes in demand, or a machine breakdown.”
Final product assembly added to the complexity, with the necessary plastic cases and internal injection-molded components required to reach the company’s 25 assembly cells at the same time, and in conjunction with the relevant printed circuit boards.
The external supply chain was not without its own challenges. Texecom routinely deals with suppliers around the globe, explains Bowden, with diverse lead times and variable delivery reliability prompting a constant balancing act between inventory holding and the possibility of being left with redundant or obsolescent components should the market change.
By early 2007, the initial 20 vendors under consideration had been reduced to five. The decision to go with
Matt Muldoon, a senior director for enterprise systems supplier Epicor, can point to multiple benefits reaped when taking a holistic approach to an ERP system implementation.
Epicor, notes Bowden, was based on both a strong functional fit as well as the Epicor solution’s flexibility. “Not only could the system be tailored to meet our multisite needs, it could be very easily customised at the point of use for every person interacting with the system,” he says.
Implementation began in May 2007, with the new system going live in August 2007—several months ahead of the date initially projected, and 10 percent under budget in terms of cost. Immediately, benefits were felt.
Foremost was what Bowden describes as “things that couldn’t do it before, and now we can.” For example, the company could now see in real time the position of any order on the system, and its physical progress through site. Likewise, the status of component production was visible, as were raw material deliveries. Product costing, a perennial bugbear, was now possible with high levels of accuracy. Finally, being built around proven best practice, it was possible for Texecom to undertake “three-way matching” on purchase orders.
The Epicor solution also enabled processes that could be undertaken before to be executed more efficiently. Production scheduling, for example—which used to require eight people from sales, production control, and senior management to attend a half-day meeting every month—now involves two people for two hours. Sales analysis now takes three hours as opposed to three days, notes Bowden, while the number of data input points has been reduced from four to one—a reduction also contributing to reduction in headcount of some six people.
Better still, the enhanced process visibility boosted inventory turns.
“Because we could now see our true usage rates, we could identify areas where we could make significant inventory reductions,” says Bowden. “The inventory reduction at the molding plant is more than
In all, he says, the reductions have freed-up close to
And while the company is confident that more efficiency can be wrung from its initial Epicor implementation, further enhancements are planned. EDI transactions with suppliers is on the horizon, as is automated invoicing when delivery notes are printed, while shop-floor data capture via handheld terminals will be implemented within weeks.
“The Epicor solution has been at the heart of the tremendous changes we’ve achieved,” sums up Bowden. “We’re in great shape for the future.”
Matt Muldoon, Epicor senior marketing director for Europe, concurs. “Texecom is a powerful example of what can be achieved when a holistic approach is taken to an ERP implementation. The results speak for themselves, and the company is continuing to build on what has already been achieved.”