Electro Systems proves that big isn't always best

“What small companies like us need is no-frills software that does the job well, is robust and doesn’t cost the earth to install. What’s the point in spending huge amounts on IT when there are affordable systems out there. It would be like using a sledgehammer to crack a nut!” So says Mark Downing, managing direc tor of Electro Systems, a £1 million turnover electrical connection systems manufacturer based in Chorley, Lancashire. The software Downing is talking about is Concept 3000, an MRPII (manufacturing resource planning) system that the firm purchased and implemented back in 1997 from a small manufacturing-focussed software author, Concept Computer Systems, based in Aldershot. Electro Systems itself is a modest size, but is growing rapidly, and Downing expects to double the sales turnover in the next couple of years. So having the right IT underpinning the manufacturing operations is essential to the company. There are 25 employees in all, 15 in production and assembly, the rest spread across accounts, stores, purchasing, despatch and quality control. Electro’s market, specifications need to be accurate. Why? Because for Electro’s customers, there can be catastrophic results if the incorrect cable or wire assembly is installed in their equipment. Apart from the possibility of fire or damage to expensive electronic components there are also the public liability consequences of damage. So four years ago, the business decided it needed to look for robust, reliable IT that also had some form of in-built traceability. Hence Concept 3000. In 1997, Downing moved to implement the software at the Chorley site, after using Concept in his two previous companies (both also in the electrical connector industry). “I knew the software very well from previous experience, and it was very affordable to install … and because Concept is a small vendor, you usually get a good, fast response to any problems. I did consider other vendors, but their solutions were much more expensive. “The initial installation in ’97 and the software upgrade to Concept’s client server NT version in 1999, both went very smoothly. We’ve got a five-user system now with networked PCs running on Windows NT,” says Downing. “Just after installation there was a slight delay as we needed some customisation of the reporting module, but the work was free of charge and the response was fast.” Downing estimates the total software cost to be around £10,000, with an additional £5,000 for the new server, plus about £3,500 per year for software support services from Concept. Says Downing: “Basically, Concept is essential to our business as it grows. In fact, I’d say it’s the most important piece of equipment in the company. Without it we wouldn’t have the information necessary to control such a complex variety of similar but essentially different assemblies.” Track the changes And by ‘complex variety’ Downing means Electro’s diverse range of customers and industries, which call for many different combinations of product (ie. wire, cable and terminations). As he points out: “The tremendous number-crunching capability of Concept 3000 enables us to keep track of all these variations and allows rapid input of changes, including costs, purchasing requirements and also to find viable alternatives.” But there was another reason for installing the software. Providing accurate quotations is also vital for the firm. Quotations need to be competitively priced, but profitable at the same time. This is where Concept 3000 performs well. It costs down to 1/1,000th of a penny per unit. In contrast, before implementing the new software, every order needed to be completely re-costed, taking into account the latest material prices, labour costs and productivity rates which changed when new machinery was introduced. “Using Concept, all these changes are constantly monitored and new costings instantly produced, saving us a great deal of time, ensuring our margins are correct and allowing us to offer a more efficient service to our customers,” says Downing. Setting up the BOM In fact, Concept 3000 does pretty well everything. It’s manufacturing and resources management modules cover sales order processing, database control for materials and operations, inventory management, purchase order control and invoice clearance, works order control, materials resource management, contract costing, estimating and traceability. Electro Systems uses all the modules apart from ‘contract costing’. This is because most of its orders are not on a long term, contract basis. “But this may change in the future as we grow,” says Downing. Incoming sales orders are keyed into Concept which checks whether the order is a repeat or new. If it’s a new order, it goes through a technical stage involving setting up a BOM (bill of materials); drawings are produced (or subcontracted to a third party); preferred suppliers and lead times are then calculated; and the MRP module is triggered accordingly. Concept also asks whether each part to be made in-house or bought-in. Once MRP and purchasing have all the correct parts for the order, a works order is released to the shop floor. On completion, the job is then recorded in Concept and despatch and invoice notes are issued accordingly. So has the software implementation been a success? “Apart from reductions in inventory and work in progress, the speed and ease with which we can now obtain management information from the software and assess profitability of orders is very impressive – and is vital in helping me run the business at a profit,” Downing insists. As for the immediate future, Downing is considering e-commerce software to run alongside Concept. “We want to give some of our larger clients password access to our website, so that they can log on and view exactly where their orders are in our factory. We’re currently looking at a system from a company called AMnet [based in Staffordshire] that we want up and running in the next six months or so. “We also have a sister manufacturing facility based in China so it would make sense to let them view what’s going on over here, and vice versa,” he adds. And one of Electro’s most important customers, Russell Hobbs, is also currently installing e-commerce software, and wants its suppliers to follow suit and communicate with it over the Internet, sharing, for example, stock level data, order status and purchasing information. Does Downing feel he’s being forced into these web-base operations, and the investment that goes with them, by large, powerful customers? “Not at all,” he says. “It’s a way of offering our clients a better service than the competition. And it will help us develop better relationships.”