Quote-to-order ERP saves €390,000 pa

Analytical instrumentation manufacturer PANalytical, part of the Spectris group, is expecting savings of Û390,000-plus per annum from an advanced 'quote to order' management system that it believes will transform its internal sales engineering supply chain to what the company describes as "waste-free processing". The firm, which is among world leaders in X-ray diffraction and X-ray fluorescence spectrometry, has a sales and service network covering some 60 countries, while manufacturing is carried out at two sites in the Netherlands. To an extent, it was a victim of its own success: its X-ray systems have numerous options so have to be configured to individual customer requirements - which was pressurising the link between sales and engineering on quotes. Processes were too slow, and some products could not be manufactured as specified, leading to expensive re-work and further delays. Tight integration Why? Because the sales team's old basic configuration application had 'passed away', so additional resources and time were being consumed in developing professional quotations. It also meant 'swivel chair' integration - with sales, purchasing, logistics and production all locked in their own circles of inefficiency. PANalytical's mantra soon became 'deliver waste-free' by creating a lean order processing chain. That meant being able to configure quotes accurately and quickly, offer reliable and easy-to-access order information, and comply accurately right through production to on-time, in-full delivery. And in the spirit of lean thinking, that translated to a requirement for error-free, single entry of data, elimination of non value-adding steps, minimal handovers, minimal wait states and so on. The company chose a Socrates configuration and quotation management system from Cincom for what has become known as the 'Quote Maker' project, to interface to its existing QAD Mfg/Pro ERP system and SalesLogix CRM (customer relationship management). Says Andre Balogh de Galantha, PANalytical's business improvement manager: "The Cincom solution will support key objectives for growth, including a reduction in the time required to produce quotations, leading to improved sales efficiency and elimination of pricing errors - resulting in reduced commercial risk. Our aim is zero tolerance for technical errors, enabling cost savings through reduced checking processes and re-work." It's going to deliver in spades. PANalytical believes that, with improved quotation production efficiency and savings on quotation re-work, sales will see an increase of 15% in efficiency, equating to over Û160,000 per annum. As for the back office, reductions in the requirement for product management support, order checking, re-keying and handling will produce a full 80% improvement, resulting in more than Û180,000 per year. Then in the supply chain, improvements in order accuracy, reductions in order changes, re-work and checking will mean a 50% improvement, generating a further Û50,000 improvement per year. That's Û390,000 - and the company is the first to admit that it's been conservative in its ROI calculations, taking into consideration only efficiency improvements; not, for example, areas like increased revenues brought about by improved customer service. In operation, the Cincom system will now cover: quotation production and management; product and sales configuration; regional dynamic, rules-based pricing; local part and item number management; and technical validation, management reporting and analysis - all with seamless integration to the company's existing ERP and CRM systems. Not bad.