July 1997 • Volume 7 • Number 7
Solutions
Big ERP Project For Television Manufacturer
In the 1990s, a strong trend among companies is to seek cost savings and additional productivity by simplifying their business processes and integrating them into an efficient, coordinated system. Many companies accomplish this by developing completely new business processes, starting from scratch and building a highly customized system from the ground up.
An alternative is to take established processes that work well and integrate them with a robust software package. That's the approach taken by Mitsubishi Consumer Electronics America Inc., a part of the Japanese giant Mitsubishi Electric Corporation. The company, based in Norcross, Ga., produces big screen televisions and other consumer electronics at three major plants located in Braselton, Ga.; Santa Ana, Calif.; and Mexicali, Mexico. With the help of its consulting partner, IBM Global Services, Mitsubishi chose SAP R/3.
"Once we decided to implement SAP, we looked at other companies that had done it or were in the midst of implementation. We concluded that we would not enter into a big reengineering effort before we began the SAP project," says Danny Rhyan, vice president of management information systems at Mitsubishi. "The SAP software provides industry-best practices as part of its design, so it's really not necessary to invent your own. Instead, we had our business units make reasonable accommodations to adapt their practices to the SAP applications."
The company also decided to avoid modifying R/3's basic system in order to keep things simple. "We've seen some huge benefits from this," Rhyan says. "First, the cost and time required for implementation is greatly reduced. Second, and just as important, is the ability to easily apply system enhancements as new software releases emerge. And finally, we get better support from the vendor if our system isn't modified."
Mitsubishi's implementation supports four areas of the company: finished goods, financials, service parts and logistics. Eight of SAP's R/3 applications comprise the solution, including financials, controlling, human resources, sales and distribution, materials management, production planning, and parts of the warehouse management application.
In addition, the solution will be integrated with barcoding systems at the plants and the IBM ProductManager, a product data management system designed to streamline and automate the transfer of information about products between manufacturing sites and engineering departments.
Mitsubishi elected to run its R/3 system on IBM's AS/400 Advanced Series Platform. "We've been using AS/400s in our factories for years and have been very happy with them. It's an extremely reliable and manageable platform, and is very cost effective. We wanted to extend that capability to our entire enterprise," Ryan says.
The implementation consists of three AS/400s which run in parallel, one located in Norcross and the other two at the Georgia and California plants.
Mitsubishi also chose IBM as its consulting partner. Early on, IBM provided a team of specialists to profile Mitsubishi's operations to get a good handle on the company's costs and processes to determine how to best meet their needs.
"Once we committed to the AS/400 Advanced Series, it followed quite naturally that we should leverage the connection between SAP and AS/400 with the implementation partner," says Rhyan. "And then, as we began to look at ProductManager, we were very pleasantly surprised at the level of sophistication and ability to integrate with SAP, so that became a natural extension of the decision to bundle the platform and implementation with IBM."
Howard Borsa, vice president of information policies at Mitsubishi, also highlights the cost savings achieved by partnering with a single vendor. "By addressing our technology issues and business integration needs, and teaming with our IBM integration/implementation partner, we are able to effectively use the full SAP application suite to achieve improved business processes and true cost control."
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