Two factors frequently prevent small to midsized manufacturers from achieving 100 percent just-in-time delivery and its related benefits: reduced warehousing, more efficient use of labor, increased customer satisfaction and greater profit margins.
The first factor is limited vendor control. The other is disparate software applications that prevent a company from having complete accounting, manufacturing and executive information about its manufacturing process.
La Marche Manufacturing has overcome these limitations by using Millennium III, an enterprise resource planning (ERP) software system from Rover Data Systems. Headquartered in Des Plaines, IL, La Marche is an ISO 9001-certified manufacturer that has been designing and making power conversion productssuch as industrial battery chargers, rectifiers, power supplies and inverterssince 1945.
The Millennium III application is a customizable ERP system with several modules that La Marche uses to track its entire manufacturing process from start to finish. These modules are for sales and marketing management, finance, engineering, manufacturing and production management, customer-relationship management and inventory control.
Before the software change, La Marche’s inventory accuracy was only 70 percent, primarily because some of the company’s product in the warehouse didn’t show up in the system. Since the change, La Marche’s inventory accuracy has improved to more than 98 percent.
Equally important, the company is able to deliver 96 percent to 97 percent of its product on the day that it was scheduled, with only a three to four week lead time. Under the old system, lead times were typically six to 12 weeks.
“When your inventory is inaccurate, it costs you a tremendous amount of money because you’re constantly placing orders to replenish something that you really already have, but just don’t know it,” says Mike Britton, vice president and chief information officer for La Marche. “Or, you’re counting on having something in the plant, and you go look for it but can’t find it.”
The ERP’s accuracy stems from the fact that it acts as a single entry system. For example, when a La Mache salesperson enters an order, it immediately drives demand down to the planning side of the house without having to re-enter it anywhere else.
“ERP integrates all the pieces very nicely, making it easier to manage when the MRP, the inventory files and the shop floor reporting all ties in,” says Britton. “A complete ERP system goes beyond that, helping to manage internal resources such as manpower. It guides us on how to redistribute our cross-trained workforce to best accomplish what needs to be done.”
Another cost-saving capability of the Millennium III is its classification of inventory locations to identify exactly where inventory is at all times, including items being tested in the lab. Britton says the system is so accurate that La Mache no longer needs to do any cycle counting. By comparison, older software systems required the manufacturer to physically set aside “safety stock,” which tied up its dollars in idle inventory.
For more information on ERP software, call 714-258-8444 or visit www.roverdata.com.