How accurate information systems enable responsive, flexible manufacturing

What is the value of more accurate information to any given business? More than limiting available inventory to that which is required for immediate production, it also means the ability to respond flexibly to sudden changes in demand…

SapphireOne enterprise resource planning solution

That’s become apparent for Nowra resins and plastics company Newkem. By implementing the SapphireOne enterprise resource planning solution, the business has considerably improved visibility across its operations, while equipping it to take advantage of unpredictable market demand for any of the various goods it produces.

Located in Nowra New South Wales, Newkem is a producer of waterproofing, floor and under-surface coatings, polyurethane acrylics and epoxies, vinyl resins, esters, putties and glues for a range of industries including marine and leisure.

Situation

Steve Schott, Newkem General Manager, said the company was using an accounting package to run its operations, but had come to appreciate the limitations. “There were a lot of manual tasks, particularly when it came to identifying and managing raw materials and stock re-order levels. The upshot was that we had to hold excessive stock in a separate location to ensure sufficient availability to fulfil orders.”

That excess inventory, said Schott, locked in several hundred thousand dollars of capital.

“We’d recognised that this was less than ideal,” he noted.

In seeking a more effective solution, Newkem not only wanted an integrated system which could provide better visibility into the supply chain and manufacturing operations, it also wanted a Mac-based enterprise resource planning package. “Document management, for accurate batch control and tracking of product from raw materials to finished goods, was also essential, as this provides accurate insight into the base cost of finished goods,” Schott added. “On a stock level, our product range is six or seven hundred wide. That’s too difficult to manage without a level of automation.”

Solution

SapphireOne ERP solution provides the collaborative platform for all users to spend more time collaborating on content. Some of the collaboration tools such as Softphone / VoIP, Tracking notes, email functionalities have increased the effectiveness in collaboration of SapphireOne ERP users. SapphireOne ERP is a platform that meets all the requirements an organisation requires to run the day to day business practices.  

In testing the market for a suitable solution, Schott said Newkem evaluated several vendors, including ‘big name’ international products. “One had a lower off the shelf price, but a massive implementation cost. The other, while it offered the right functionality, wasn’t available on the Apple Mac platform, which would have required the purchase of new hardware.”

SapphireOne stood out as an ideal solution from all respects, particularly when a site visit to a similar business demonstrated the ability of the software – and the vendor itself – to respond flexibly to specific requirements. “The solution was attractively priced and we saw a definite advantage in going with a local vendor as we wanted to have a direct relationship with the people who make the software,” said Schott. “We wanted to know that the software is being maintained in a way which is beneficial to us, with consideration of our needs. That’s something SapphireOne is very good at achieving.”

Schott said since implementing the solution, Newkem has noted how requests for particular functionality had manifest in upgrades to the SapphireOne solution which are made available to other clients, too. “If others use it, it becomes even more advantageous, as you have confidence that the add-on isn’t going to be left behind [in further development] as custom programming too expensive to maintain.”

Results

The predominant goal prior to the implementation of SapphireOne was for better visibility of the supply chain, and that has been well achieved said Schott. “At any time, we can see how the business is positioned within the sales period in terms of raw materials and finished goods. By knowing the stock levels, inventory is optimised, freeing up capital, while re-ordering is far easier with the establishment of an annual baseline; the system automatically re-orders and provides a level of reporting which simply puts the list in front of you,” Schott explained.

With all stock scanned into and out of the system, the level of usage of raw materials is accurately tracked. For example, said Schott, a particularly viscous raw material wasn’t being fully drained from storage barrels; SapphireOne alerted management to a discrepancy in raw materials in and finished goods out. “That meant intervening, heating the barrels and recovering material which hadn’t been used. Picking up stock usage means a real difference in revenue.”

Working as the company does with chemicals, Schott said SapphireOne has provided custom development for managing the data attached to sensitive materials – such as Material Safety Data Sheets – while delivering a document management system which digitises every aspect of every product. That makes traceability a simple matter of a couple of mouse clicks, compared with the manual process of hunting through filing cabinets to source paper-based information if required.

“That is a real improvement for staff members, who have a sense of control of what is happening around them. They are now confident that the right material is available at the right time – and when information is needed, it is almost instantly recalled,” said Schott.

But probably the greatest benefit of an integrated Enterprise Resource Planning (ERP) solution is the ability to rapidly take advantage of changing market circumstances. “For example, following a fire at another manufacturing facility, we were approached to manufacture a considerable quantity of product outside of the usual production plan. With clear information on our supply chain, we were immediately able to assess if manufacturing could handle the unusual demand by knowing the status of our raw material stock and supply,” said Schott.

Without accurate information, he said such opportunities would be missed.

There is a very real impact on business performance, too. “We saw an increase in sales during that period of over 50 percent. Thanks to the SapphireOne system, we knew we could do it; there is no question that without a good ERP solution, there is no way that would have been possible. If your business systems aren’t good, spikes in revenue become unpleasant and morale poor.”