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May 2, 2000

5 Min Read
ERP for molders, Part 1

What if you could track your customer’s inventory and production schedule at multiple plant locations, and adjust your production and shipping plans to satisfy their needs—all just in time, automatically, with agreed-to triggering events, instantaneous electronic messaging, and automated raw materials purchasing, production scheduling, and order tracking?

Sound like too much to ask? Not if you’re taking advantage of new solutions to traditional supply chain management such as Enterprise Resource Planning (ERP) software.

Of course, if you’re like many molders, you’ve just gotten used to MRP (Material Requirements Planning). So what is ERP? Well, as Patrick McCrevan, business development manager for Syscon International Inc., a software developer in South Bend, IN, puts it, "ERP is MRP on steroids."

What ERP Does
ERP is, in fact, the next generation of MRP, linking production to all company activities. ERP works from the "shop floor to the top floor," connecting order entry, purchasing, accounting, and billing to production planning, inventory management, maintenance and labor scheduling, and barcode labeling. ERP even includes automatic e-mail confirmations to customers.

McCrevan defines ERP as the "replacement and recombination of MRP and MRPII," tying those functions into one application that also allows sales people to use the system to their advantage. "ERP has broadened and brought in more of the disciplines than MRP offers," says McCrevan. "MRP focuses on the things surrounding manufacturing. ERP adds proposals, quoting, document management, and relationship management."

Prior to the development of ERP, no link existed between the production monitoring system and the other "islands of information" within a company such as purchasing, planning, or sales, explains Amir Raza, partner, Enterprise Applications and e-Business Solutions for Mascon, an ERP software developer in Schaumburg, IL.

ERP streamlines company operations by giving people throughout the organization more information on a real-time basis, and eliminating redundant operations such as rekeying of production data into a material purchasing system or inventory control system.

Molder-friendly ERP
There are many ERP systems on the market, but only a few are designed specifically for the plastics molding industry. Some systems want to be all things to all people, and thus don’t work well for molders, points out Liz Alflen of IQ Management Systems Inc. in Paso Robles, CA. IQMS specifically serves the plastics industry with its integrated software programs for office and plant management, including real-time production monitoring.

Also focused on the injection molding industry, Mascon has developed an ERP system called Aims. "Tracking family molds, scheduling family molds, dealing with setup optimization issues, and regrind issues are all features that are key to the molding industry," says Raza. "And all have been integrated into the Aims software."

Syscon’s efforts have been mostly associated with things happening on the floor in real time, notes McCrevan. "Over the last 25 years, customers have pushed us into MRP functions because they wanted everything in one package," he says. "Material forecasting and usage, labor, setup, ISO documentation, and tracking and maintaining the details of production for the customer are the functions we’ve typically provided."

In recent years, Syscon has developed agreements with suppliers of MRP and ERP software programs to link the entire organization, integrating the real-time production monitoring capabilities of Syscon’s system with ERP software.

"A molder might buy the best of both production monitoring and ERP," adds McCrevan. "He might have an ERP system and not have a real-time production monitoring system. That’s where we come in. We can get the two systems to talk to each other without a person having to input data into the ERP system from the plant floor."

Competitive Advantage
Companies of all sizes are recognizing the competitive advantages of having an ERP system. Even the small mom-and-pop molders are moving into more sophisticated systems as they discover the value of ERP as a cost tracker.

ERP monitors production, quality, and scrap, and ties that information to the financials. Cash flow is critical to any company, but can mean life or death to the smaller ones.

In fact, Manufacturing Management from DTR Software International (Jacksonville, FL) was designed to help injection molders get a better picture of manufacturing costs on a shift to shift basis, according to the company’s William C. Russ. The package compares each shift against standards in a production run, providing a cost of goods sold report on a product by product basis, and reporting whether costs are over or under for labor, materials, and equipment.

ERP also offers advantages for companies active in mergers and acquisitions. Newly formed conglomerates can use ERP to tie in all of their plants and operations, says IQMS’s Alflen.

Part 2: ERP implementationInternational Data Corp., a market and business analysis firm with offices nationwide, surveyed 150 companies about their ERP systems in February 1998. About 39 percent said they had spent more than $1 million in implementation costs; 19 percent spent between $250,000 and $1 million. You might think that after having spent this kind of money, companies would be happy with the outcome. Yet, only 30 percent said they were satisfied. What was the cause of the dissatisfaction? Was it the system itself? Or was it failure to implement ERP properly?

In ERP for Molders, Part 2: Avoiding the pitfalls of implementation, we take a look at how you can ensure success.

Contact information
DTR Software International
Jacksonville, FL
William C. Russ
Phone: (800) 822-4387
Fax: (904) 281-1112
Web: www.dtr-software.com

IQ Management Systems Inc.
Paso Robles, CA
Liz Alflen
Phone: (805) 227-1122
Fax: (805) 227-1120
Web: www.iqms.com

Mascon
Schaumburg, IL
Amir Raza
Phone: (800) 240-2425
Fax: (847) 240-2480

Syscon International Inc.
South Bend, IN
Patrick McCrevan
Phone: (219) 232-3900
Fax: (219) 287-5916
Web: www.syscon-intl.com

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