Our team at Ultra has been partnering with a US-based manufacturer of welded and cold drawn mechanical steel tubing, fabricated parts and precision components. Through the partnership, we’ve uncovered business issues commonly faced by many metal component manufacturers and suppliers.
This post is the first in a series showcasing the process for effective ERP selection and business process improvement in the metals fabrication industry.
About the Manufacturer
The metals parts supplier produces components for demanding manufacturing challenges, including steel service centers, automotive and truck, construction and agricultural equipment, machinery and appliance OEMs.
The fabricator operates ten strategically located tube facilities in North America. These facilities are located in close proximity to major customers, minimizing shipping time and expense.
Multiple locations also help the manufacturer deliver maximum flexibility in production planning, a major advantage when lead times are particularly short, or customer emergencies arise.
Business Process Overview
The overall business goal of the supplier is to become the highest-quality, lowest-cost producer within its tube-manufacturing range.
To that end, the company experienced key drivers that motivated them to shift from their legacy ERP system to a more advanced and robust ERP solution that could accommodate business process improvements.
Key Drivers in ERP Selection
At the outset, we teamed with the company to view the ERP selection project as a “business process improvement” project.
The overall purpose is to implement improved business processes that are enabled with new technology.
After a careful assessment, the following issues were uncovered as key drivers in the ERP selection project.
- Multiple locations, facilities: The fabricator found it difficult to coordinate and manage production operations throughout the ten geographically dispersed manufacturing facilities. Real-time reporting, consolidated financials, and other aggregated metrics were difficult to track and monitor across the enterprise
- Multiple solutions, multiple versions: We discovered that the fabricator was using four different and outdated legacy ERP systems throughout each of the plants. In the case of the facilities that were using the same ERP solution, each plant used a different version or implemented the system differently in some manner, through customizations and other system modifications.
- Functional inefficiencies: Each of the ten plants experiences duplicate data entry, manual handling, and other Inefficiencies in inventory management, customer service, and manufacturing stemming in part from lack of common item, supplier, and customer numbers.
- Standalone spreadsheets: As a form of “workaround,” each of the plants has developed a set of standalone and proprietary spreadsheets to track shipping, inventory levels, quality reporting and other metrics. This meant each plant had its own spreadsheet library to gather, analyze and make business decisions.
These challenges, among others, motivated the leadership team to begin the ERP selection project.
After identifying these key drivers, our next activity was to undergo a thorough business mapping process.