Solutions
It Takes Two (Planning Levels) To Really Tango
For Wayne Wakeland, information resources manager at Leupold & Stevens,
the most memorable image of the Beaverton, Ore.-based company's cut over
to their new Interactive system centered on a section of sidewalk in the
firm's parking lot. A scrap company was hauling away the pieces of the old
mainframe that had been costing the manufacturer of spotting scopes and
water gauges $700-a-day in staff and maintenance costs to keep operational.
A small fortune in hardware and programming had been expended on the system,
now disassembled by the curbside. The scrap company's payment? One hundred
dollars!
Despite the large overhead associated with the old system (the support staff
alone was 18 strong) and years of custom programming, the decision to upgrade
to Interactive's UNIX-based, fully integrated enterprise resource planning
(ERP) system was not an easy one. Wakeland describes the firm as needing
software that supports "real manufacturing," and the old mainframe,
while brutally unwieldy, did represent a system customized to address Leupold
& Steven's specific requirements.
Founded in 1907 to make hydrologic gauges for dams, reservoirs, and municipal
water departments, the firm began to produce high quality sport rifle scopes
in the late 1930s when one of the company's principals missed a shot at
a deer while out hunting. Both the water measurement products, which rely
on high-accuracy clocks, and the rifle scopes in particular, which are precision
optical instruments, require a complex series of fabrication, assembly,
and test steps. At Leupold & Stevens, that kind of "real manufacturing"
includes million-dollar machines churning bar stock into one-piece "main"
tubes for rifle scopes and the precision milling of leaded-steel mounts.
Behind the firm's manufacturing expertise lies a level of craft knowledge
that includes meeting customer demand for variations in rifle scope finish
and cross hair design. Such subtleties have led the company to develop a
rather ingenious method of production planning, built around Interactive's
two-level master scheduling logic.
First, a production plan is created for "families" of items that
have mostly the same parts. Each family is specified via a planning bill
of material (BOM) expressed in option percentages. The BOM is used to plan
the mix within a product family, exploding down to the end item (final assembly)
to create production forecasts that are computed by multiplying production
plan quantities by the option percentages within the planning bill.
The Interactive system also helps automate the process of reconciling production
forecast quantities with actual customer orders to assure the forecasted
mix is "replaced" by the actual mix once it is known. Actual customer
demand is known to a reasonably high degree well before production begins
due to an incentive program that rewards Leupold & Stevens' customers
for placing orders early in the year.
To align final assembly activity to real customer demand, the production
of non-standard items is based solely on sales orders. Items containing
standard-or "prime"-reticles (the actual sighting pattern) are
planned for and produced to forecast in conjunction with sales orders, with
system logic using both in determining what to do. It's a requirement that
was created through partial customization, a service offered by Interactive
to its customers.
"Reticle mix and product finish determine final production," notes
Wakeland, "but we keep the manufacturing process 'dancing' by automating
the balance between customer demand, capacity availability and material.
The outcome of this two-level master scheduling process is remarkably pragmatic
and efficient."
ICI Forest Products Chooses Client/Server
ICI Forest Products, a division of ICI Canada, distributes products to customers
in the pulp and paper and chemical industries throughout North America.
With headquarters in Montreal, ICI operates major chemical manufacturing
sites in Cornwall, Ontario; Becancour, Quebec; and Dalhousie, New Brunswick.
ICI was one of the first North American customers for SAP's R/3 mainframe-based
system, but the Forest Products division required its own information technology
(IT) solution to optimize its resources. Specifically, it wanted to address
three concerns:
- IT development. ICI Forest Products depended on the "corporate"
IT system for the development of new functions, making independent exploration
virtually impossible. In addition, new functions tested or implemented in
other ICI divisions had a cascade effect on the whole system, forcing ICI
Forest Products to test and re-test its own applications.
- Flexibility. Data access through the mainframe-based system was
not fast enough to meet ICI Forest Products' needs. The lack of immediate
access to information hampered IT performance and productivity.
- Costs. Because ICI Canada's mainframe was located in North Carolina,
there were constraints involved in sharing information, including high corporate
charges.
Client/server computing, which promised both reduced costs and higher functionality,
was judged to be the best solution.
The client/server solution provided for ICI Forest Products by SAP seemed
the best choice for several reasons. First, the integration required was
a key feature of SAP's R/3 System. Second, ICI users were already familiar
with the SAP environment, which meant a shorter learning curve.
ICI looked to the R/3 System for the following major benefits.
- Functionality. The system offers the division a number of new
business functions that had been unavailable before. For example, the sales
and distribution module will help improve decision-making within the company.
- Responsiveness. The SAP system's faster response can help ICI
Forest Products boost the productivity of its employees by allowing them
to work faster and smarter. The system's graphical user interface encourages
employees to retrieve the information they need themselves, rather than
relying on the IT department.
- Cost reduction. R/3 will reduce ICI Forest Products' operating
expenses while the client/server environment will allow for greater autonomy
in the decision process, reducing lengthy and costly decision cycles.
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Control Society Inc. All rights reserved.
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