Global Talk Q2 Web

8/9/2019 Global Talk Q2 Web

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Adverts

SYSPRO Asia Pacificrounds upthe cost savings

In this issue: SYSPRO helping you achieve a healthy Return on Investment

Keeping atight reinon inventory

Parallaxlooks long termwith SYSPRO

Hayward Gordon usesSYSPRO toreduce costs


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CEOs message

Helping youachieve ahealthy ROI

The world of information technology is

one ofrapid and frequent change, oftencreating a sense of uncertainty. The

demands on enterprise software are not thesame as they were five or even two yearsago. Amid all these fluctuations, SYSPROis keeping abreast of technology trends.We have worked with mid-market enter-prises since our inception, and we know andunderstand this section of the market. We willcontinue to ensure our solutions meet yourneeds.

As Im sure youve heard by now, SYSPRO6.1 offers significant functional, businessand industry-specific enhancements. Thisincludes business process modeling, enter-prise performance management, workflowfor automated processing, end-to-end sup-ply chain management and development ofthe cloud hosted SYSPRO SaaS (Software asa Service) offering.

Theres more though in addition to allthose good things, with SYSPRO 6.1 we areable to help our customers achieve a healthy

return on investment (ROI) more so thanever before. This is partly due to modulessuch as Inventory Optimization and WorkflowServices, and partly due to our focus on Leanprinciples.

The Lean philosophy is all about collabora-tion and working as a single unit in the mostefficient manner to achieve the businessobjective which is ultimately to reducecosts and increase profits. A key Lean initia-tive is to reduce inventory levels while improv-

ing service levels.

In fact, the basic goal of Lean manufactur-ing is to get more done with less by minimizing

inventory at al l stages of production, shorten-

ing the product cycle times from materials tofinished goods and eliminating waste.

SYSPRO supports the Lean initiativethrough the use of technology built on andaround a solid end-to-end business solu-tion. Technology facilitates automation inthe manufacturing arena of the businessby replacing manual transaction process-ing with bar-coding solutions; this has theimmediate effect of reducing waste andimproving efficiency. Introducing rules-basedscheduling tools can vastly improve through-put, reduce bottlenecks and better utilize theshop floor.

We all know the issues surrounding inven-tory are highly complex, and that organiza-tions are starting to understand more aboutthe link between inventory and achievingcost savings. By getting to grips with the roleinventory plays in the value chain, compa-nies can ensure that it adds value to theorganization, rather than representing costalone. By optimizing your inventory to add

value in the most effective and efficient waypossible thereby saving costs your organi-zation can improve profitability and competi-tiveness. Inventory optimization also improvesthe organizations ability to provide perfectorder fulfillment and manage a demand-driven supply chain.

In theory, inventory is held to balance varia-tions in demand with time lags and variationsin supply. Demand draws value, and invento-ry, through the supply chain. As supply chains

are often long and complex, it is difficult tomatch the dynamics of different parts of thesupply chain so that the flow of goods andmaterials is smooth and without waste. Large

SYSPRO Global Talk I Vol 7 No.21

Phil Duff CEO, SYSPRO

TECHNOLOGY INSIGHT Phil Duff


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TECHNOLOGY INSIGHT Phil Duff

2

manufacturing batch sizes, long or unreliablelead times, infrequent shipping cycles, largeminimum order quantities, demand that is dif-

ficult to predict and poor quality can all addto inventory that accumulates throughout thesupply chain without adding value.

On the other hand, having the right amountof inventory can improve service levels andadd turnover and profitability. Ideally, inven-tory optimization should be done across thesupply chain.

SYSPRO 6.1s built-in Inventory Optimizationmodule provides the tools and processes to

optimize inventory by tracking and manag-ing the parameters that shape inventory andits causes. This module also includes the toolsto determine the impact of changing theseparameters on service levels, stock-holding,delivery performance, and manufacturing orprocurement performance.

I mentioned SYSPRO Workflow Services (SWS)earlier this module comprises a flexibleand customizable workflow engine for mod-eling business processes. Using a graphicalinterface, it puts control in the hands ofusers to design and visualize workflow proc-esses for specific business process needs.

The software is based on Microsoft WindowsWorkflow Foundation and is fully incorpo-rated into the SYSPRO product, meaning that

workflow processes can be initiated from any-where in the SYSPRO product. The advantagesof a Microsoft .NET-based workflow solutioninclude greater flexibility, improved processcontrols and easy development of associatedprograms to augment business processes.

While we are on the subject of costsavings, I would like to point out that whileother enterprise software vendors are addingto the technology stack that their customersmust adopt, SYSPRO understands that you

are looking for reduced complexity andownership costs. To achieve this, SYSPRO isreducing the technology stack that organiza-tions need to manage. This strategy includesadopting Microsoft Windows as the onlyplatform for SYSPRO in the future. With a singleproduct, single platform focus, the reductionof the SYSPRO technology stack will deliverexponential benefits to customers, channelpartners and the development community.

This edition of Global Talk focuses on howto achieve cost savings with your ERP system,and we are proud to present case studieswhich showcase how SYSPROs various fea-tures have helped our customers in theseareas. v

Phil Duff

CEO

SYSPRO

SYSPRO 6.1 offers significantfunctional, business and industry-

specific enhancements. This includesbusiness process modeling, enterpriseperformance management, workflow

for automated processing,end-to-end supply chain

management and development

of the cloud hosted SYSPRO SaaS(Software as a Service) offering.



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Frontline Australasia

Frontline Australasia manufactures precisioncomponents and assemblies for the automo-tive and defense industries. The company pro-vides full design and engineering services usingthe latest CAD design and modeling systems.Its high-tech, specialized equipment is shippedto local customers as well as those in NewZealand, Malaysia and Canada.

Integration of data across the company

quickly helped to gain management andadministrative staff support for SYSPRO. JamesClyne, Chief Financial Officer of Frontline, com-ments: Month-end used to be our biggestissue. Wed still be here at 7 or 8 oclock at nightgetting things done. These days were finishedat 3pm on the last day of the month.

Another big advantage has been theimprovement in data quality; people trust thenumbers and reports coming out of the ERP sys-tem. Margins in manufacturing are very tight,

Clyne adds. So the ability to accurately reporton costing is a vital part of what we have to do.

In the past we found it hard to analyze the


SYSPRO Asia Pacific

rounds upthe cost savings

profitability of particular products. We used towaste a lot of time going round in circles. Nowif there is a problem in any area we see it veryquickly.

Greater accuracy has also been introducedinto the companys international activitiesthrough new multi-currency capabilities whichautomate formerly manual calculations.

Clyne estimates that productivity amongadministrative staff has increased by around20% due to easier user interfaces and a reduc-tion in the time it takes staff to generate andinterrogate data.

WORKING WITH SYSPRO SYSPRO ASIA PACIFIC

In keeping with the theme of this editionof Global Talk controlling costs andachieving a healthy return on investment

our Asia Pacific office has created acollection of customers who have done just that by using SYSPRO. Here is a high-level overview of some of those customersand their achievements.

"Another big advantage has been theimprovement in data quality; peopletrust the numbers and reports coming

out of the ERP system."

James Clyne,Chief Financial Officer of Frontline


5/16SYSPRO Global Talk I Vol 7 No.2 4

Satake Australia

The ability to capture all costs related to equip-ment imports was a key requirement for SatakeAustralia. The company designs and constructsa wide range of specialized machines whichease the milling and bulk processing of cereals,pulses, nuts and even plastics. Its equipmentand processes are used to speed and improvealmost every area of agricultural processingfrom cleaning and sorting grain through to con-ditioning, de-hulling, polishing or pelletizing,weighing, blending and bag packing.

Accountant Mahesh Patel says Satakesrequirements included strong landed costingcapabilities to help track the progress of itsspare parts and machinery imports, and tocapture all costs related to each imported item.

Given the custom preparation that goes intoeach machine, a comprehensive contract orproject costing module was necessary. Thesoftware had to allow Satake to record labor,stock items and a variety of other costs againsteach client project, and reconciling project

estimates to actual costs was crucial.

Regency Media

Gaining visibi lity across all of its operationshas reduced costs for Regency Mediaby enabling secure online job bookingand management. Regency Media isAustralias largest privately-owned DVDmanufacturer, pressing and packaging

movies, TV releases and music from itsfacilities in Sydney and Melbourne.

Regency Media has linked its own web-site with SYSPRO so that customers canplace orders and submit their materialsecurely and electronically. Entire projectscan be managed via the website, reduc-ing the cost of order processing. This hasbeen an important benefit for a highturnover, low margin bus iness.



6/16SYSPRO Global Talk I Vol 7 No.25

Craig Young, General Manager of A-dec,

notes that the systems sales history data is alsoessential when it comes to stock control. Weliterally have around 8,000 to 9,000 line itemsavailable to us from suppliers so we need goodreporting with regard to fast- and slow-movingitems to keep stock appropriately.

Detailed costing information is derived throughtools such as landed cost tracking, whichenables A-dec to more accurately captureshipping and freight costs.

A-dec

Managing the costs associated with inventory

management is one of the greatest challengesfor dental and medical equipment supplierA-dec. The company maintains nearly 7,000product lines, some of which have a lifespanof 30 years or more. Styles continue to change,so A-dec needs to be able to access a widevariety of replacement parts.

It is crucial to decide what to keep in thewarehouse and what to classify as a back-orderitem, says Joe Sanfilippo, A-decs LogisticsManager.

We have a three-month lead time for over-seas orders and shipping, so we need to ensuresafety stock levels and in busy periods wehave to calculate how much extra to bring in,Sanfilippo says. It makes visibility into stockessential.

To help customers understand the time fororder fulfillment, A-dec classifies products aseither key parts (items that sell every twomonths) or non-key parts (slower moving prod-uct). When customers receive a price list printed

direct from the SYSPRO solution, they can easi lyidentify which items are available off-the-shelfand which need to go on back-order.




Natural Beauty Care

Cutting costs by reducing stock levels has beena major benefit to Natural Beauty Care, a smallmanufacturing company. The business manu-factures beauty and body care products forother companies to brand and resell.

Today, Natural Beauty Care has 60 clientsand manufactures roughly 10 million individualproducts annually.

Managing Director John Dwyer says: We

probably have around 1,000 constantly activelines and another 1,000 which are much slowerin their turnover. We deal with about 2,000

different raw materials and the same numberof separate components. Mixing raw materials,components and formulations had becomeextremely involved. No individual could keeptrack of it all.

Before SYSPRO was introduced, lack ofvisibility into inventory led to over-orderingof raw materials, while at other times staffwould resort to physically walking aroundthe warehouse to determine whether thematerials they needed were in stock. SYSPROintroduced benefits in the areas of inventory,warehouse management, sales and pur-chase order processing.

Inventory changes have led to muchsmoother manufacturing and compoundingprocesses. Weve trimmed stock by 20%, whichis a significant amount. We are operating withbetter information and we now know what weuse, so we can arrange spot and longer termpurchasing deals, all of which is helping tostabilize prices, Dwyer says.

Enhanced monitoring of raw material use-by-dates has increased overall batch quality andreduced wastage.

Bee JewelleryBee Jewellery began as a tiny business special-izing in jewellery polishing and electroplating. Itis now one of the largest jewellery suppliers inAustralia, selling to independent jewellers andchain stores all over Australia, New Zealand andCanada.

One feature essential to the business is the BillOf Materials (BOM). As the value of gold chang-

es daily, the ability to quickly perform BOM andWIF (What If) cost implosions has a significantpositive impact on the costing and pricing ofBees jewellery. Since the business bases priceson last cost due to golds commodity value,the cost implosion feature provides new stockpricing whenever the price of gold changes.

Steven Sesselmann, Bee Jewellerys Directorand Founder, says: It means we have an accu-rate understanding of the value of our stock-holding based on the real price of gold; and

it gives us the confidence that were alwayscompetitive in the marketplace, regardless ofwhere the price of gold is sitting.




With a fall in product prices, we need to turnover more volume to get the same sales turno-ver and this creates complexities for ware-housing, importing and distributing, he says.

Investing in the right stock becomes critical.With SYSPROs Inventory Forecasting, we haveimproved customer service levels from 67% to

95%, with 30% less dollar value in stock in thoseproduct lines we now forecast.

It is very easy to hide key problems by havinga lot of safety stock and excess inventory. If youstart bringing inventory levels down, it revealstrue underlying problems. By using SYSPRO youhave tools such as the supplier performancereport for unreliable vendors, cycle counting forstock accuracy, forecasting for demand historyand fluctuations. The tools are already there tobring the stock levels down and get immediate

returns from it, Phillips says. v

Phillips & Smith (PSL)

Phillips & Smith (PSL) manufactures, imports anddistributes various fire and safety products tomore than 20 countries, with distribution officesin Sydney and Auckland.

Ian Phillips, General Manager of Phillips &

Smith, says: Previously, we had poor grossmargin and sales analysis. We couldnt evenidentify our top 10 customers without dumpinghigh volumes of data into Excel and doing a lotof manipulation.

We now have stable, accurate financialresults and excellent detailed transaction-al data. It is an incredibly powerful tool forCustomer Service and Sales people becausethey access the precise information they needthere and then. With the old system, Customer

Service people often had to take down a cus-tomer query manually and return the call laterwith the correct answer.

SYSPRO was introduced at a time when PSLfaced heavy global competition from com-moditization of many of its products. Low-costproducers particularly from China rapidlychanged PSLs business model. For example,within a period of two to three years the priceof a 1kg fire extinguisher fell by around 70% asChina became the largest worldwide manu-facturer of extinguishers.


"We now have stable, accuratefinancial results and excellent detailed

transactional data. It is an incrediblypowerful tool for Customer Service andSales people because they access the

precise information they need thereand then. With the old system, CustomerService people often had to take downa customer query manually and return

the call later with thecorrect answer."

Ian Phillips,

General Manager of Phillips & Smith



WORKING WITH SYSPRO SYSPRO SOUTH AFRICA

Over the past 40 years, Orley Foods hasproduced a comprehensive range ofquality ingredients for the South African

food industry. The company specializes in themanufacture and distribution of products, aswell as providing solutions services to businesses

in the food industry.

The previous ERP system employed at OrleyFoods did not properly cater for the manu-facturing process, and upgrading the existingsystem was not an option. The companytherefore developed stringent selection criteriafor selecting a new ERP system before finallydeciding to implement SYSPRO. According toFiona Byrns, the project manager on the imple-mentation, the costs and lack of local supportwere the biggest inhibitors to upgrading theexisting system.

Orleys existing ERP system was unique inSouth Africa, and it was extremely difficult tofind companies that understood the technol-ogy, much less support it. For this reason, oneof the main criteria for Orleys new ERP systemwas that it should be available locally throughmultiple companies, and that it could be easilysupported, she says.

EOHs Impact Africa business unit was select-ed as the implementation partner. Supporting

more than 800 companies running SYSPRO,EOH Impact Africa has over 120 consultantsnationally, making it one of SYSPROs leadingdistributors.

Other selection criteria included a completesupply chain solution, strong manufacturingcapabilities, audit tracking throughout thesystem, close integration with SCADA systems,local support, minimal need for customiza-tion, as well as integration of currently bespokesystems.

With the implementation of SYSPRO, OrleyFoods has achieved detailed control overits manufacturing processes, expenses, androutings. SYSPRO provides cost centers againstwhich we can allocate overhead costs, laborand material usage, Byrns says. SYSPRO is alsoable to close works orders/jobs and account fora variety of by-products, and it provides real-time dashboard information with reference to

progress and completion of jobs.

Andrew Janik, CEO of Orley Foods, com-ments: This system has the ability to cater forour environment. The integration with our fac-tory automation system has given us accessto performance data, and we are planningto add scheduling as the next phase of theproject. Once this has been completed, we willhave a fully integrated scheduling system whichwill allow us to use live data to plan procure-ment.

SYSPRO has enabled Orley to generate devel-opment bills of material, allowing for costingsand version scenarios. All what-if costings andestimates, as well as actual costings, are beingdone within the system, enabling greater accu-racy.

A future phase will be the implementation ofa fully integrated Engineering Change Controlsystem, which will be used and controlled bynew product development to ensure all chang-es are tracked and approved, says Janik. We

will also be implementing batch card and labelgeneration information to replace the currentsystems.

Furthermore, the system has increased infor-mation availability at order taking, with stockavailability and back order status now all avail-able on one screen.

The change management aspects makingpeople feel comfortable with the new after theinitial discomfort of something new, something

different - was a challenge, but everyone inthe company is seeing the benefits of the newsystem, says Lynda Benn, Director EOH ImpactAfrica. v

Mixing the right

ERP ingredients



Take a huge range of products (half pro-duced by your own manufacturing facility,half imported from specialist manufacturers

in the Far East), the need to react to specific cli-ent demands and seasonal changes in the end

customer market, and always make sure youget the right product, in the right number, tothe right place at the right time. That's exactlywhat George Wilkinson International, the UKsleading bakeware manufacturer, consistentlydoes to maintain its number one position in thebakeware, kitchen tools and gadgets market.

"We have identified many explicit

savings as well as the softer but equallyimportant operational benefits. Ourheadcounts have not increased; in

some instances we have decreased thenumber of people assigned to admin-istrative tasks and made them more

productive. We have also reduced coststied up in excess stocks, significantly

streamlining the operation. The speedwith which we can react to customer

demands and market changes hasturned GW International into a very agilebusiness."

Tina Carswell,Commercial Director at GW International

WORKING WITH SYSPRO SYSPRO UK

Keeping a

tight reinon inventory



Based in Lancashire, GW International managesmore than 2000 product lines, which equatesto 16 million items a year. Manufacturing on thisscale involves a mountain of associated data,all of which requires automation and manage-ment. For GW International, SYSPRO cures thedata management headache and ensuresthat the company can meet its commitmentsto its 400-strong customer base.

Meeting numerous challengesAccording to Tina Carswell, CommercialDirector at GW International, the companysgreatest challenge is to manage its huge prod-uct range and make sure that its customers get

exactly what they need, when they need it.

Essentially, the production and supply chainrequirements, together with warehouse stock-holding, are of paramount importance to ourproduction planning. SYSPRO provides this infor-mation and is a huge improvement on ourprevious system, Carswell says. SYSPRO effec-tively balances the manufacturing and import-ing sides of the business right across the board,she says.

In addition to ensuring that the bakewarepresses are turning sheet metal into tins andtrays, the system plays a key role in making surethat sufficient supplies of kitchen accessoriesare stocked and distributed to customers. Thismay sound like straightforward manufacturingand distribution; however, GW Internationalprovides value-added custom manufacturingfor specific customers worldwide. This typicallyentails a change in design, color and labelaccording to the customer's requirements. Suchagile manufacturing requires efficiency andaccess to quality data.

GW International operates two distinct manu-facturing styles: manufacturing for stock toserve the domestic market and made-to-ordermanufacturing, predominantly for internationalcustomers. In such situations inventory manage-ment can be a huge issue as there is a needfor product visibility and traceability, but GWInternational has solved the problem by usingSYSPROs Advanced Warehouse Managementmodule to help manage inventory.

We wanted a one-stop-shop system thatwas totally integrated into a seamless system.We had no motivation to include a second

software company, Carswell says. SYSPRO isproviding us with full traceability of productsand full documentation.

We have identified many explicit savingsas well as the softer but equally importantoperational benefits. Our headcounts havenot increased; in some instances we havedecreased the number of people assigned toadministrative tasks and made them more pro-ductive. We have also reduced costs tied upin excess stocks, significantly streamlining the

operation. The speed with which we can reactto customer demands and market changes hasturned GW International into a very agile busi-ness.

Above all, the system has united the infor-mation for the company and rendered theidiosyncratic spreadsheets held on differentPCs unnecessary. Information is now transpar-ent and available to all, she says.

Results that count

The results truly do speak for themselves. Sinceimplementing SYSPRO, GW International hasrecorded some interesting facts to give a clearview of its Return on Investment: Accounts staff reduced by 50% Sales administration tasks decreased by 50% Overheads reduced by 1 million Stock reduced by 25% Stock accuracy improved by 100% Accounts preparation following month-end

100% more efficient (less than 10 dayscompared to more than 20)

Instant stock visibility Lead times improved by 80% (now running at98%)

WORKING WITH SYSPRO SYSPRO UK



Hayward Gordon designs, manufacturesand distributes process equipment; prod-ucts and systems relating to pumping,

mixing, filtration, and bulk solids handling.With 78 employees and branch locations in

Vancouver, Calgary and Montreal, HaywardGordon is headquartered in Ontario, home ofits custom-built 50,000-sq.ft. office and plantfacility, opened in 2006.

Company President John Hayward, whosefather, Len Hayward, started the business in1952, says: We're particularly strong in min-ing and waste-water treatment, but we alsowork with a wide variety of process industries:chemical processing, food processing, pulpand paper.

Very strong in North America, HaywardGordon has established a growing global pres-ence and is exporting to South America andcountries such as Madagascar, Australia, theDominican Republic, Mexico and Chile.

In 1990, Hayward Gordon decided to runits operations on SYSPRO. We went througha number of false starts before settling onSYSPRO, says Hayward. We used other ERPpackages, and even tried to make one our-selves. When we realized what an immense task

it would be to create and maintain our own ERP,we went back to the market and eventuallychose SYSPRO.

and supported. Many of the ERP companieswe considered back then don't exist anymore.SYSPRO has stayed, and has supported its prod-uct very well, he says.

Over recent years, the company has faceda major challenge the strengthening of theCanadian dollar. That's put immense pres-

sure on us to become more productive, and toreduce our costs, says Hayward. In response,we have been implementing LEAN practices,which has a lot to do with leveraging our

The decision to invest in SYSPRO was basedon three main considerations. Firstly, the workwe do is highly varied we're more of a jobshop than build-to-stock. We felt that SYSPRO'sBill of Materials (BOM), Work in Progress (WIP),and Requirements Planning modules lent them-selves well to a job-shop environment. Secondly,SYSPRO's integration of operations and financewas excellent far better than anything else welooked at. Finally, we wanted to be sure that theERP we chose would be properly maintained

WORKING WITH SYSPRO SYSPRO CANADA

Hayward Gordon

uses SYSPRO toreduce costs

"We're very happy with SYSPRO: the product,the support, and the ongoing development.

The fact that we've been with it as long as wehave says a lot. We continue to build it into our

operations in a very important way."

John Hayward, Company President



ERP. We underwent a very extensive business-process mapping project to find areas in whichwe could create efficiencies, and many ofthe ways we chose to streamline our businessinvolve SYSPRO.

For example, Hayward Gordon has imple-mented electronic time tracking in the shop,and has automated its labor posting function.We get the tracking in real time now, saysHayward, and by having SYSPRO do it, we'vebeen able to eliminate a data entry position.We've also integrated Microsoft CRM (cus-tomer relationships management) directly intoSYSPRO, thereby automating our order entry.Now people in the field can enter their orders

automatically, eliminating the need for dupli-cate entry.

WORKING WITH SYSPRO SYSPRO CANADA

Soon, the company is hoping to implementelectronic funds transfer (EFT) to streamline itspayables. The timing for all these efficiencieshas been good, because despite the market

challenges, we've been seeing some growth.Getting more out of SYSPRO has allowed us toexpand without breaking apart at the seams,Hayward says.

Leveraging SYSPRO has not only reducedcosts, it has helped Hayward Gordon reliablymeet its lead times. The company has com-pressed its lead times and made them morereliable, and taken advantage of the fact thatprocesses which used to run consecutively cannow run concurrently.

For example, when an order is entered, itgets reviewed and the credit check is trig-gered along with a customer number request

electronically and simultaneously. Previously,a paper file would spend many days travellingto multiple departments for approval beforethe order was placed. Now, if there's a problemwith the order, action can be taken right away.

It's much more efficient, and it's helping usserve our customers better, Hayward says.

Commenting on SYSPRO's ROI, he offers auseful metric: We've seen our revenue per

employee increase by around 65% in the pastfour years. You can't do that unless you buildinto your company the ability to grow saleswithout growing costs in lockstep. If you don'thave the right infrastructure in place, your salescan cost more to make than they're worth.That's what productivity is about if you havethe right systems in place it gives your companyextra capacity, without adding costs. That'show we've been able to measure what SYSPROhas done for us.

We're very happy with SYSPRO: the product,

the support, and the ongoing development.The fact that we've been with it as long as wehave says a lot. We continue to build it into ouroperations in a very important way. v



When a hobby is infused with dedica-tion andpassion, it often evolves intoa highly successful business. Meet

Parallax, a California-based, privately-heldcompany that traces its origins to founderChip Graceys teenage interests in program-ming and electronics. Gracey first transformedhis hobby into a business called InnovativeSoftware Engineering (ISE), which he ran from

his bedroom. ISE made software duplicationhardware for the Commodore 64 computerand within a year had sold 20,000 units. Ongraduation from high school, Chip and friendLance Walley started Parallax from their sharedapartment.

Today, Parallax designs and manufacturesmicrocontrollers, sensors and robotic compo-nents for hobby, educational and commercialuse. Parallaxs own microcontroller design, themulti-core Propeller chip, as well as its line of

sensor products, which measure humidity, light,color, proximity, vibration, location and infra-red, are big sellers in the hobbyist and commer-cial markets. The educational market, whichcomprises about a third of Parallaxs revenues,is a major customer of Parallax kits which aredesigned for microcontroller programming androbotics courses.

Parallax products can be purchased onlineand from mainstream electronic distributors,such as Digi-Key, and retail outlets, includingRadioShack and Fry's, as well as 70 distributors

around the world. Ken Gracey, Vice Presidentof Sales and Marketing, says: Our products aredesigned to empower our customers, who area creative problem-solving bunch. We docu-ment the products extensively with applica-tions and code examples so our customers canquickly integrate our microcontrollers or sensorsinto a project or product design and speedtheir time to market.

Parallax maintains two manufacturing plants:a pick and place surface-mount assembly

line and kitting operation in California, and anadditional electronic assembly line and chiptesting operation in China. With 120,000 indi-vidual customers, Parallax fills 100 to 200 ordersa day.

Until the mid-1990s, Parallax had been using alow-end customer service program which it ranon an Apple Mac. We reviewed our businessneeds, including manufacturing, distribution,sales, planning, purchasing and accounting,and realized we needed more comprehensive

software, Gracey says.

After an extensive search, we hit on SYSPRO,an integrated package with all the rightpieces. SYSPRO software has evolved alongsideParallax and continues to give us the sophisti-cation and customization capabilities we needto grow our business.

Parallaxs SYSPRO environment is a typicalthree-tier installation. SYSPRO runs on its ownWindows 2003 R2 application server. The SQLServer 2005 database runs on a separate

Windows 2003 R2 server with all clients runningWindows XP.

While SYSPRO has improved our business, it's

the MRP functionality that gets the most acco-lades inside the company, he says. In fact,weve developed a chart showing the effectsof a properly configured MRP, which causeda total inventory reduction of 16.1% since ourinitial efforts were put in place to configure itcorrectly.

The MRP set-up requirements made us care-fully analyze our manufacturing run times, oper-ation and BOM (Bill of Materials) correctnessand lead times for a variety of processes and

WORKING WITH SYSPRO SYSPRO USA

Parallax looks long

termwith SYSPRO



parts: made-in goods; sub-contracted; kittedproducts; and parts manufactured offshore.Throw in requirements planning from a varietyof warehouse demands, and we've got a fairlycomplex system to manage. But we found thatonce it was working correctly, we were able to

measure the effects of our choices.

Explains Gracey: The use of MRP has madeamazing improvements to our efficiency. Beforewe had MRP, we were frequently out of stockof key finished goods, yet overloaded with anexcess of raw materials and the wrong finishedgoods. Once we put MRP to work and trainedour staff, we were able to reduce our inventoryby about $350K. We are rarely out of stock onany product anymore, and the live connectionbetween SYSPRO and our web site allows us todisplay our inventory levels in real-time on the

web.

Parallaxs warehouse setup is unique. Thecompany maintains five SYSPRO warehousesand three physical warehouses. The SYSPROwarehouses are arranged by the functionsperformed: raw materials; finished goods; RMAreturns; China; refurbished items sold via eBay;and reworked items.

This set-up allows us very convenient use ofMRP because we can omit certain warehouses

from requirements planning and plan purchaseorder and job actions effectively by warehouseand/or location, Gracey says. We just put inthe EBQ (Estimated Buying Quantity) and MRQ

(Manufactured Required Quantity), the buy-ing role and the lead time. In this manner, wehave automated the issuing of purchase orders,reducing the time to write and issue them fromabout 4,5 days down to about two. Moreover,rather than having a central planning bureau,weve dispersed planning among our staff.

Gracey lauds Parallax IT Manager, Jim Ewald,for establishing a Service Oriented Architecture(SOA) that automates online sales. Ewald wrotea .Net application that provides an interfacebetween the companys ecommerce web siteand SYSPRO. The interface pushes product pric-ing, inventory and availability on the web. It

also collects sales orders placed on the website and creates the sales orders in SYSPRO.Customer accounts on the web and in SYSPROare synchronized so that repeat orders canbe attached to the correct SYSPRO custom-er account. The interface can also createnew customer accounts as needed. Once theorders are approved, they are simply printed asa packing list for the shippers.

The application interfaces to SYSPRO e.netsolutions business objects through SYSPRO Web

Services. It is installed on the SYSPRO applica-tion server as a service, Ewald says.

Gracey concludes by offering plaudits forSYSPROs report output capability. Havingaccurate data from sales, inventory, account-ing and manufacturing allows us to quicklyassess changes and trends, he says. v

WORKING WITH SYSPRO SYSPRO USA


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Global Talk Q2 Web

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