The sky's the limit

Many small to medium sized manufacturing firms simply haven’t got hundreds of thousands of pounds to shell out on the latest enterprise (ERP) software suite. Thankfully though, it’s not always the most sophisticated software that results in the most impressive results. Skyforce Avionics, a subsidiary of Honeywell International, designs and manufactures portable navigation systems for the aerospace industry. Established in 1990, the company is based in Boxgrove, near Chichester in a converted farmhouse with 2,000 square feet of manufacturing space. There are 25 employees in total, 10 in engineering design, five in production and assembly, the rest in sales and management roles. The business is now lean and efficient in every sense of the words. The fact that 25 employees were able to turn over a staggering £2.5 million last year shows the firm is performing well. But it’s not always been like this. Managing director at Skyforce, Mel White, comments: “In 1998, our business was growing fast and we needed more control. We were running the business using software from Sage. It was basically doing our financials and stock control.” There was no material requirements planning (MRP) up to this point; inventory was backflushed which meant, in a batch manufacturing environment, Skyforce had poor forward build capability, and bills of material (BOMs) were also becoming a problem. As White explains, “We make-to-forecast and our average batch size is 10. Our products typically have 300 components. Sage limited the number of ‘children’ we could have under ‘parent’ BOM headings to 10, which simply wasn’t enough for us.” And there was another key requirement for the firm – lot traceability. The new system had to be capable of tracking exactly which batch and supplier a component came from. The company had been employing one person full-time, who manually assigned lot numbers to batches of stock. So White decided to seek out an MRP system that also provided sales order processing (SOP) capability. “We were looking to spend between £15k and £20k on software. We considered a couple of specialist PCB [printed circuit board] MRP software suppliers, but they didn’t have the breadth of functionality we required. In the end it was an easy choice to go with Concept 3000 [from Concept Computers],” says White. Better stock accuracy Skyforce has purchased various software modules: stock control, BOM management, purchase order control, production management (which is really works order release), MRP (which is run once a month) and sales order processing. After using the system for the last two years, there have been many improvements to the business. White: “The best measure of its success is in stock accuracy. This figure was hovering around the mid-70s per cent before Concept. It’s now better than 95%… And we’ve seen a corresponding improvement in our cashflow. It’s now 50% higher than pre-1998.” That’s not all though. He also says there have been headcount savings of between 15 and 20% over the last two years as a result of the new software. But what investment was necessary? White explains: “It’s taken us about 12 months to implement everything and get it all working the way we wanted it to. I’d say with the sales order processing module [which was added after the initial implementation of Concept 3000] we’ve spent roughly £30,000 in all for an eight-user system.” The implementation of the new software did cause a few disruptions to the business though. “Concept helped us transfer all the stock data from Sage to the new software, as well as our supplier lists, so that all went pretty well. But we had to validate our actual stock levels [do a stock take] before switching on the new software. “We also had to reconstruct all our BOMs and link supplier information [Skyforce had 98 active suppliers at that time] to their respective part numbers,” he adds. “You can’t afford to stop the business running so we had to run the new SOP system in parallel with Sage for about two months.” There was also cultural resistance. “Our engineers and manufacturing people were fine working with the new system. But we did have a little resistance from sales,” says White. “In order to maintain the lot traceability, sales had to start being more disciplined, especially with our low value [£80 to £100 per order] orders. They have to allocate everything from stock now so it means there are more keystrokes for them to do. Education is the key.” The company is also now looking at Concept’s product data management (PDM) software. The design engineers use various CAD systems, including Pro-Engineer (from PTC) and Autocad 2000 (from Autodesk). “We want to get our products to market faster,” says White. “Currently we have a 12-month engineering lead time for new products. We want to halve this figure. But we’ll need some kind of PDM system to help us do this.” outsource your IT? Says White, “Our IT department consists of one person. We want to be lean with overheads kept to a minimum, so we outsource most of our IT work. They [service provider, SMT] support our servers by just dialling-in to fix any problems we have.” So does the company plan to use the Internet in the future to communicate with other business partners? “We already do,” replies White. “We supply a lot of our products to Honeywell and they insist we take web-based orders from their own e-procurement system. “And although we don’t have access at the moment, we want to start using Honeywell’s intranet so that our engineers can download part numbers, technical information and drawings of Honeywell products to their desktop. Problem is, two years ago our ISP wanted to charge us £2,000 per month for the privilege of using their high-speed land line. That’s far too much for a firm our size.”