Switching on to global integrated business and manufacturing

Keytech, the cable assemblies and electronic systems manufacturer that supplies high volume, short lead-time parts to the likes of Dell, Gateway and Packard Bell, has seen annual growth of more than 70% since its foundation in Limerick, Ireland in 1994. It’s done so by being responsive and acquisitive: in its short history, production has been ramped up and factories and companies acquired that would take most companies decades. By 1997, production of cable harnesses alone was rising towards 250,000 a month, and delivery times on constantly varying orders had in some cases been driven down to four hours. Also the firm had already acquired extra plastics and engineering companies in Ireland to expand its product range and manufacturing capacity. The aim was to provide electronics companies with broad production and system integration facilities: effectively a ‘one-stop’ production build shop. It all meant managing serious change quickly and carefully, and IT was no exception. Keytech had started with a mix of a Unix-based manufacturing system, Novell accounting software and a Lotus office suite. But in 1997 it was already clear that integration and standardisation would be needed to support the scale of growth. “Control is critical with a short lead time, multi-site operation expanding at 70—100% annually,” says Robert O’Donnell, group operations manager. “To continue growing successfully, we needed new IT foundations that could meet the business’ needs for the foreseeable future.” Keytech saw the priority as a new unifying ERP (enterprise resource planning) system. It also needed better, faster information and management reporting accessible globally; and office software to work seamlessly with both the ERP and the reporting software. Further, all systems would have to be rolled out world-wide – so they had to be easy to install, simple to learn and supportable globally. “Our aim was to establish a common set of applications for all our present and future businesses, whatever their location,” says O’Donnell. “We wanted near identical installations so that staff from a site in one country could walk into a factory in another and immediately be productive.” For group IT manager, Paul O’Connor, that meant Microsoft: “At an early stage, we decided to go for a solution using Windows NT [and] Windows 95 and Office Professional for the desktop,” he said. “We had the skills in-house to handle installation and support.” And the same applied to the ERP: with its consultants, Keytech evaluated 10 packaged systems, quickly whittling these down to three, based on “value for money, functionality, flexibility, simplicity and local support”. Ultimately, Fourth Shift was selected for Limerick becauuse, says O’Donnell, “it was the best fit.”. Dublin-based MSP (Manufacturing Systems Products), Fourth Shift’s Irish business partner, carried out the implementation. “This was a challenge to our own staff and MSP’s, particularly as we decided to replace both our manufacturing and accounting systems at the same time,” says O’Donnell – a decision made when the company realised that it’s investment in manufacturing management needed to be reflected with modern integrated financials. Just nine weeks were scheduled to implement the new system – and that included some business processes re-engineering, as well as data cleaning and input as well as training. O’Donnell says that with hindsight this was very swift: “we wouldn’t do it again.” He would use the more structured approach the company has used since, “with time lines and goals”. But, he explains, the business was growing very fast and things just had to be done on the fly. The system went live on time on June 30 1998, and says O’Donnell, that was achieved not least because “[it is] very flexible and avoids complexity, so we could focus on refining procedures to improve our efficiency.” At the same time as upgrading its ERP software, Keytech updated its infrastructure, hardware and networking. It imstalled Windows NT Server Enterprise Edition running on clustered NT Intel-based servers to get scalability, resilience and performance. In Limerick these are linked to a 100Mbps LAN supporting 50 users, including 30 Fourth shift ‘seats’. Keytech says the system rapidly achieved its objectives – it improved planning, reduced inventory and raised productivity and profitability. The firm now has a good master production scheduling environment that includes work-in-progress control with multi-level bills of materials (BoMs) encompassing 2,500 components. Also, standard costing was introduced (“putting the levels of discipline into the organisation we needed by then”), more timely and accurate information became available across the business and accounts became available two days after month end, instead of two weeks. Inventory went down 30% and success in getting products on the warehouse shelf in the right place at the right time moved to 95%-plus. “With customers like Dell on three hour delivery at rates that can change daily, the new system lets us stay one step ahead in very dynamic situations,” says O’Donnell. “The new ERP software is more than fast enough to let us do MRP runs every day, and it is now planning, not pressure, that gets the orders out on time.” And with success under its belt, the company quickly rolled out the new software to its other factories. First were Boston and Penang – each implemented within just two weeks – by using the Limerick configuration on these greenfield sites with only minor amendments despite different products and machines. Says O’Donnell: “Installing the system at new subsidiaries lets us see where efficiency can be improved, and established proven approaches implemented across the group”. And he adds: “Fourth Shift gives us the flexibility to match local needs while enforcing common standards and producing information that we can compare right across the group.” To give the subsidiaries access to Fourth Shift on the Limerick servers, a Citrix Metaframe system was implemented. In conjunction with a 384kbps frame relay WAN, this distributes screen and keyboard functions to sites world wide for applications such as centralised order processing. The terminal software also allows representatives on the road, as well as other sites, to work live with the ERP system via PCs and laptops. Also via the WAN, ERP data is harmonised for all sites using Fourth Shift’s VisiWatch module. It polls the databases at each subsidiary, and every time pre-defined changes are detected, they are communicated. It means management in Limerick are free to monitor and control the overseas factories as if they were local. Says O’Connor: “Installing a common IT platform at each factory not only simplified installation and operation: it also ensured all the information we get is of the same quality, which is critical in optimising performance across a multi-site, multi-national business like ours.” And Keytech has set up an intranet for its subsidiaries, based on IIS and Fourth Shift’s VisiWatch, to maintain common standards in the use of its ERP. This distributes information and documentation on how to use the system, accessible via a browser. It also simplifies creating, monitoring and harmonising part numbers and quantities globally, with unified descriptive information on the databases and the ability to create purchase orders and the rest automatically. Overall, O’Donnell says information is now consistently more complete, accurate and up-to-date. Data from Fourth Shift is automatically transferred to Microsoft Access, and bespoke reports mean managers can see developing situations and deal with them. Slow moving or obsolete stock, for example, is quickly flagged and can be dealt with before it causes difficulties in the warehouse or accounts. O’Connor agrees that the ERP system is providing the foundation for the business and its success, but adds: “It is the facilities provided by Access that allow us to reap the full benefits. And because everything is compatible, creating a powerful integrated system has been relatively straightforward.” “We are making our systems an increasingly powerful tool for monitoring and managing what is now a global business,” says O’Donnell. “This strategy has worked because the applications not only do the job – people also find them easy to work with.” For the future, the firm says it will be expanding into e-business, starting by creating an extranet accessible to customers and suppliers, and providing them with information about order status and planned material requirements. Keytech says it’s looking at the new version of Fourth Shift’s software, v7.0 e-RP which it hopes will enable it to integrate the up- and down-stream supply chain with the core ERP system.