Taking control of global manufacturing

Schumacher Electric knew it needed new enterprise resource planning (ERP) software a few years ago. The system at the Illinois-based maker of battery chargers, transformers, and related products for the NHRA drag circuit and other race applications lacked needed shipping functions, was overly complicated, and relied on a soon-to-expire version of the Windows operating system. Worst of all, the system did not provide timely information from manufacturing operations in China.

“That was the biggest pain point, the biggest hurdle we had,” says Chris Hasdall, vice president of corporate strategy at Schumacher Electric. “We had no visibility into our plant operations in China.”

That lack of visibility links directly to the old system’s inefficiency. The software required several manual processes, relying on assembly-line employees to enter identical data from one computer to another for ticket orders. Because the process was time consuming, order entry often did not occur until after manufacturing, and executives in Illinois were planning shipments and handling production runs using out-of-date data. What they wanted was real-time visibility.

Like many companies, Schumacher’s information technology teams had bolted on new pieces to its existing ERP software as needs arose. Schumacher’s legacy system lacked several necessary functions. In addition, the internal IT effort needed to maintain the system had gradually become more and more costly and resource-intensive.

“It was tough to get mass updates across the whole company,” Hasdall says. “And to get useful information, you had to go through multiple screens and take lots of extra steps.”
 

Automating with barcodes

Hasdall notes that Schumacher knew it had a deadline to upgrade or replace its ERP software. Microsoft was going to stop supporting Windows XP (something that finally happened in April 2014), so company officials began looking for a package that would prepare it for the future by offering web apps that would allow managers to monitor systems from computers or tablets.

After evaluating the ERP market, company management moved to Infor SyteLine 8.0. Hasdall says the system’s scalability was important because Schumacher Electric expects to grow and will need software that matches future needs.

The single, integrated ERP solution includes shipping and all other mission-critical business functions, so users no longer need patches or disparate databases. Also eliminated are the manual processes that previously drove duplicate data entry, delays, and other inefficiencies.

One of the first advantages was a move to a more automated process by adding barcoding to its manufacturing operations. Hasdall says Schumacher Electric has put barcodes on its packaging for years, but that was for its customers. The company did not use them internally until it upgraded its software.

Workers at the company’s plants in China and Mexico now scan equipment as it moves through the assembly process, into packaging, and out through shipping. Eliminating human data entry eliminated possible human errors, and that improved quality and efficiency. Hasdall says shipping accuracy recently hit 99.95%, something that would not have been possible without the barcode scanning.

Most importantly, barcoding at manufacturing plants and distribution centers solved the visibility problems. Executives can track machines as they’re being built in real time. Inventory levels at distribution centers are instantly available, giving managers a clear, instant picture of sales and manufacturing capacity.

A new, automated conveyor system at one distribution center has automated product labelling, which speeds shipments dramatically. Hasdall says he expects to save as much as $400,000 per year from automating the system, something that would not have been possible without a software upgrade and the increased use of barcoding.
 

Upgrades lead to measureable results

In an industry where speed determines winners and losers, management at Schumacher has always measured and monitored the exact amounts of time it takes to perform internal transactions. Increased automation and system processing times have driven dramatic, quantifiable results. For example, the previous software took nearly three hours to run steps that the system now completes in three minutes. And the company has reduced its average transaction time from five minutes to 30 seconds or less.

The new ERP technology has also saved the IT department time and money. Getting rid of the cobbled-together system means fewer servers and fewer systems to support. The results have been measurable. IT costs as a percentage of revenue have been trimmed by almost 300% – from 1.37% before the SyteLine launch to 0.51% today.

The next step for Schumacher, says Hasdall, will be further expanding the use of barcoding in manufacturing. Now, a handful of components can be scanned before being installed into battery chargers and equipment, but Hasdall says he’d like to increase that to nearly all parts.

Schumacher Electric
www.batterychargers.com

Infor
www.infor.com
IMTS 2014 booth #E-3155

About the author: John Flavin is executive vice president, Global Manufacturing at Infor. For more information about the company, contact innovate@infor.com.