MFG/PRO case studies

MFG/PRO integrated Enterprise Resource Planning System at SUOFTEC Ltd.

Suoftec Ltd. was formed in1995 as a joint venture of the American Superior Industrial and the German Otto Fuchs. With full capacity, the factory of Tatabánya, Hungary will be able to produce approximately 1,5 millions wheels a year.

The selection of the system

The company being a green field investment could start with an entirely new IT system. As the human resources and the production were growing, it became essential to choose the appropriate Enterprise Resource Planning system. The new system had to meet the owners requirements as well as the company needs. The owners specified what information, data they want to get regularly; these were to be generated by the new system. Furthermore the purchasing processes of the company differ from what is usual in Hungary. Moreover, the owners require a very strict cost management. This point will have significance later: the system enables to plan more accurately the budget of different cost centres and to control their utilisation. Naturally, the system had to be in accordance with the Hungarian rules. Another advantage would have been if at least some parts of the program had been available in English and German. The company was to produce bulk production. As such a level of manufacturing can not be tracked manually, it needed computerised bookkeeping. This solution required a thorough, well-founded decision. If the company decides to use different software for different tasks, in a few years it will have integration problems. Considering all these points, the company decided to buy an integrated Enterprise Resource Planning system. Shortly, it was looking for a forth generation tool, either Hungarian, either foreign, with appropriate support, adapted to the Hungarian environment. Finally, the company decided to examine five softwares, and asked for a presentation and references from the distributors. The decision-makers compared the software packages: their integrity, manageability, speed, and put emphasis on data security. This later one means the security during the transaction: when problems arise during the everyday work, data loss should be the less possible. Furthermore, they had to connect the new system to the existing network, and Netware 4.11 operation system. When making decision, they put special emphasis on references. They wanted to see a company that manufactures in bulk production, and which has several profiles i.e. manufactures several kinds of finished products. They could find such a company: BPW Rába that uses MFG/PRO. The company behind the software was ISYS-ON. As they checked the size and turnover of the distributor it proved to be successful, growing company. The reference visits increased their impression. What concerns the hardware, they decided to buy an IBM RS/6000 with an AIX operation system.

The implementation of the system

From 1997 June on, the first modules of MFG/PRO - Purchasing, General Ledger, Inventory management, Inventory accounts, as well as Incoming and Outgoing invoices - were installed. What was hindering the implementation work was that a temporary solution had to be found for the end of 1997. As all data had to be processed retroactively, from the beginning of the year, the system was temporarily set to batch process. This period was a difficult one from accounting point of view as well. It was a difficult task to keep account and bank transactions in balance: Differently from reality, not a transaction followed another transaction, but a period another period. The same was the situation with incoming and outgoing payments. Before the software implementation, an outside firm kept the accounts for Suoftec. Although there were no strong practices in this regard, the company had to modify certain processes. First of all, they had to learn the logic of the software, and then they could finalise the processes and the company structure. Moreover, the company had certain special processes. Certain fields were going live, while bookkeeping and processes were being organised simultaneously. In addition, some people were working on the test files, and documentation should have been done as well. Furthermore, as the capital of the company was defined in German Mark, the accounts had to be kept in that currency. Once a year - according to the law - the company presents the balance sheet converted to Hungarian forint to the Tax Office. One more thing that makes the situation even more complicated is that the company stands in a bond zone. First, the Inventory and Purchasing modules started in February, later the Financial modules in March-April.

Results

The opportunities of the existing modules are used with 80 percents efficiency, and even so the advantages of the system are apparent. All data are up-to-date, and they provide much more information to the owners than earlier. Moreover, this progress appears, while MFG/PRO has 12 concurrent users. Even these favourable experiences encourage the company to increase the user number, and to benefit more from the possibilities of the modules. What concerns the future, the company is planning to complete the system by the manufacturing management modules that is a strong point of MFG/PRO. The company needs a system that integrates the manufacturing management and accounting. Since Suoftec produces in big series, there are considerable changes in manufacturing within short time. In the factory, 3000-5000 wheels are produced daily, which has strong effect on inventory and assets as well. Continuous monitoring of the changes is a huge task that would be supported by integration with new modules.