When small specialist motorsport pipes and hoses manufacturer Goodridge wanted to gear up for growth it went for IT slightly out of its league. But it paid off, says Brian Tinham.
Goodridge, established by Canadian racing driver Stuart Goodridge in 1974, manufactures high performance pipes and hoses for the motorsport, luxury automotive, aerospace and military industries. Customers include Rolls Royce, TVR, Mercedes, Harley Davidson and Jaguar, as well as jet skis maker Polaris. It also supplies the main teams in Formula One, F3000 and McLaren F1 Supercars.
From lowly beginnings in Totnes, Devon, the firm moved to a factory in Exeter in 1989, started a division at Silverstone race track and then went on to open in France and Holland, also expanding into Spain and Japan and acquiring a company in the US. It now has 150 employees world-wide, 60 in the UK, and notched up £20 million revenues this year, up £4 million on last.
Such growth, however, doesn’t come without its challenges. Until 1992, Goodridge had no IT, but in that year rising order volumes led it to buy bespoke software from UK-based Castle Business Systems. By 1997, the business had outgrown it, with the US in particular taking off on huge volumes of components. But the real catalyst for change was the firm’s decision to save money by cutting bought-in finished goods stocks and moving instead to buying in basic components and assembling to order. Goodridge installed five assembly cells for this, and a machine shop to build prototypes and small production runs.
New IT became a priority. Goodridge set up a project team, comprising part time IT manager Chris Hellier and the board, including managing director Stuart Goodridge. The team undertook what it describes as a thorough assessment of suppliers, including Castle itself and several small software firms, and global enterprise software (ERP) players like JD Edwards, SAP, Baan, Oracle and Geac.
Hellier takes up the story: “We wanted a system that was AS/400-based – there’s no full time IT here: if you go for NT you need people to look after it, but AS/400 is self-housekeeping. And we needed world-wide support, multi-languages, multi-currency and good scaleability for business growth.” So that ruled out the smaller vendors. But, he says, many of the bigger boys said that with just 30 concurrent users at the time, Goodridge was too small.
However, Goodridge found Geac, then JBA, able and willing to deliver, and settled on its System 21 ERP, signing a £400,000 contract in June 1997. The initial implementation, incorporating advanced order entry, financials, customer scheduling, purchasing, manufacturing (MRP II), warehousing and sales analysis modules, all on a single AS/400 for the entire company, went live six months later on 2nd January 1998.
Hellier says they did it all themselves, with a project team including accounts, purchasing, stores and sales – manufacturing was added during the project. “We had to handle the overwhelming task of setting up inventory and manufacturing processes, testing and so on, but the system went live without any delays or hitches.” He continues: “One of the challenges we faced was hundreds of components with no part numbers and no routings, because we had been buying in finished parts – so this had to be addressed at the outset. Our inventory of parts grew from 3,000 to 12,000 pieces.” And there was the huge task of data cleaning: “We had to re-enter all data from scratch,” he says.
Another challenge was that Goodridge decided to go for ‘vanilla’ software. Hellier: “We decided not to have bespoke work added for all the usual reasons.” But, he says, “You write your own rule book really: we didn’t have procedures for manufacturing, for example, so we wrote them to fit the standard software. But there are lots of ways you can work within that, and we do have our own specific rules that we have to keep otherwise we wouldn’t be in business. Sometimes we have to fast-track things through the system, for example by backflushing all work centres together when finished goods go into stock. And we need to be able to allocate and de-allocate parts.”
It all went well. Goodridge currently receives 200 to 300 orders per day in the UK, all on paper, and most items are now shipped same day from stock. Orders are entered onto System 21 and scheduled; components purchasing is then synchronised so that suppliers deliver the right quantities of components at the right time. Incoming components are received and processed in the stores, and parts produced and assembled in the workshop ready for despatch. Goodridge runs MRP three times a week: Hellier says this keeps pace with the changing demand for which the automotive industry is renowned and the large volumes of product being processed though the factory.
What about benefits? Hellier says: “They’re even greater than we predicted. The business is operating with greater efficiency; stock levels have been further reduced; and we are able to service our customers more accurately. We can also meet the demands of complicated schedules without having to manually calculate them: once an order is entered onto System 21, everything else is triggered automatically.” And he adds: “Purchasing processes have also been streamlined: we now get global purchasing reports so we can do global sourcing: and that means bigger volumes and lower costs. We have reaped immense cost savings as a result of these combined benefits.”
And there’s more. “Our customers grade us on our performance on a monthly basis, and since Goodridge has been up and running with System 21, we have scored consistent grade ‘A’s. We have a massive advantage over our competitors. Using Internet-based remote order entry, for example, our salespeople can check stock, process orders on customer sites and ensure that the order is underway while in front of the customer.”
Beyond all this, the system has also enabled Goodridge to link up with its international businesses. USA went live in 1999, the system being an almost exact duplicate of the UK, apart from modifications to the System 21 finance module. And Hellier says: “Because of the time difference between Goodridge UK and Goodridge USA, only 45 licences are required for our 90 users: when the USA logs on in the morning, the UK logs off!” France went live a few months after the USA, with another system dupication based on Geac’s French language module, and Hellier says he is looking to implement System 21 in Germany next year.
Hellier says that although it’s difficult to measure savings and benefits, he believes the system may well already have paid for itself. For the future, he says: “Now that we have accurate data for set-up, machine and assembly times, we’re going to put in advanced costing for quote accuracy and refining labour. Then over the next two years, we will probably implement EDI with our large customers, and then look at Geac’s e-commerce for customers ordering over the web if it comes about.
Hellier concludes: “[The system] really has transformed our business. We are constantly expanding, and our IT has handled this and will continue to do so. In hindsight, there is nothing major – modules, timing or the supplier – that I would have changed about this project.”
Author: Brian Tinham