GKN Germany gets into gear with advanced planning

Better plant productivity and business efficiencies, as well as improved customer service and, in particular, the wherewithal to change and optimise production plans at very short notice: all are among key benefits at GKN Off Highway Systems' (OHS) gearbox plant in Sohland, Germany following go-live this year with a Fourth Shift ERP system backed by Preactor APS (advanced planning and scheduling). The system replaced two non-integrated applications for inventory control and accounting, together with reliance on computing resources from GKN Walterscheid's main manufacturing site in Germany. Says GKN OHS IT manager Wil Logsdail: "For the first time we will be able to operate entirely on our own and fully integrate a number of important functions within the plant. Throughout the company, Fourth Shift will improve data flow and synchronisation. It will also support production of the new automatic gearbox product later this year." Fourth Shift has been the preferred ERP and supply chain systems provider to GKN OHS since the turn of the century. It's been installed in five of its other locations around the world, running factory and supply chain operations for the manufacture of driveline components and systems destined for the world's leading manufacturers of everything from off-road vehicles to tractors to construction equipment, forestry and agricultural machinery and combine harvesters. The US was first, at GKN OHS' Armstrong wheels manufacturing facility back in 2000, where Logsdail says the system's simplicity in terms of implementation and cost of ownership was noticed. He also says the fact that the system is multi-national – in terms of support and handling local European requirements – was another key factor in the group's choice. Subsequently, Fourth Shift was introduced to three further associated plants in the US, along with considerable business process re-engineering for best practice and workflow automation. EDI and work centre cost tracking subsystems, with shopfloor data collection (SFDC), have sine been added, and now management is looking at implementing a supplier collaboration web portal add-on, probably early next year for forecasts, call-offs, electronic purchase orders and the rest. In 2003/2004, GKN OHS moved on to its Italian wheels production site, using the US experience as its template, and rolled out production control, EDI, SFDC and so on. "We set down a clear standardisation policy for data and reporting," says Logsdail. "Each business has the same data standards so that we have, for example, consolidated customer codes across the whole of the businesses. We also started a major Cognos data warehouse and business intelligence initiative, pulling in data from all sites on sales, contribution, order book and so forth for analysis. And we have similar ideas in the pipeline for production analysis." Additions like these, or more importantly the way they have been executed, have revealed another key benefit often hidden when decisions are being made about which packaged ERP system vendor to go with. Says Logsdail: "One of real benefits of Fourth Shift v7.3, that I don't think they market well, is its FSTI, the .Net-based translation API (application program interface). It follows all the business rules and it's very open, so we can build on specific third party systems and improve productivity or whatever without impacting our upgrade path." It also enables software written by existing sites, specific to that location's manufacturing requirements, to be utilised across the entire group by quickly integrating with the core Fourth Shift applications, and allowing seamless exchange of data. The point is well made at the current OHS implementation in Sohland, which went live in the summer. With mostly more traditional production, rather than the flow and cell manufacturing in operation at its other plants, the ERP system had to be implemented somewhat differently to improve on traditional scheduling and thus reduce otherwise high WIP (work in progress) inventory. Hence the Preactor add-on, which has been tightly integrated with Fourth Shift – hassle-free. Revitalising schedules "Preactor was brought into the equation to address that, and to optimise the group technology layout in terms of scheduling the plant," explains Logsdail. "The Scheduling Biz [a Fourth Shift and Preactor implementation partner] used the FSTI interface to allow real-time updates between the systems." And it's made a good tight fit. In brief detail, the sequence starts with MRP running nightly, considering all orders (firm planned, released for manufacturing and so on), and downloading to Preactor for forward plant scheduling to re-route orders to machines that are available and make best use of CNC machine tool resources. Says Logsdail: "That aligns the immediate finite plan with MRP due-date requirements, and planners then use Preactor to run production scenarios with 'traffic light' feedback to find an optimal schedule. When they're happy, they publish the plan, and FSTI pushes all changes back to Fourth Shift so that the next MRP run can change material procurement and allocation." It's a similar story with a software module that handles material surcharge calculations – passing on costs to key customers to deal with the fluctuating steel market, for example. "FSTI allows us to use the software tool to calculate the rates and pass data back into the Fourth Shift financials. And we can now use that anywhere: for example, we've just upgraded the Armstrong site and our bolt-ons cost us nothing: they just work." Back at the firm's Sohland site, there's another example of FSTI in action, in this case with the firm's off-site subcontract processes being handled by another add-on third party module. "Fourth Shift handles the requirements from a costing standpoint," explains Logsdail. "But the process for raising orders, pallet labels and documents of transport, which are mandatory in Germany, is quite lengthy, so our add-on program creates the PO, pack labels and packing list for shipping, and does the necessary financials." All good stuff. Returning to the business benefits, however, just one more thing. Although Logsdail makes the point that it's too early to give precise figures, he says it's not just about achieving savings in this case related to inventory: it's also about improving on-time, in-full delivery performance and right first time throughput stats. "So from the shareholders viewpoint, if we can improve those positions by working on our IT and business processes, we're improving the chances of repeat business and growth."