Fletcher Challenge subsidiary Winstone Wallboards makes gib board. Twelve months ago they installed JD Edwards’ OneWorld software to manage their supply chain. The results have been remarkable, says IT manager Jonathan Iles.
“Immediate direct benefits were with the pricing system, which used to take week to update, it now takes six hours. So that’s huge saving in time.”
But the keys are in production. “With our former system, for example, the plant manager, would work out what he was making next week or next month manually. He would go through the finished goods and raw material store and work out if he was short of, say, gib board “Fyreline” (a type of fire rated board), or gib compound, and visually would work out whether or not we needed to make bit more.
“Manual forecasting has worked for many years, but can lead to excessive inventory holding and fair bit of expediting. In addition, there was no ‘system’ for sharing information, and lot of work went into creating standalone databases which might have been good for the individual.
“What we are now doing with JDE OneWorld is to roll out system which a) looks at historical usage, and b) also looks at mass of other information such as seasonality, sales promotions, major building projects, sales forecasts etc. So if, for example, our commercial marketing team is doing promotion in schools, the forecast effect of these promotions will flow into JDE OneWorld through the monthly sales and operations planning (SOP) meeting then down into the production plan and through into the bill of materials (the list of ingredients which makes up each product) – and out into purchase order for raw materials.
“Schools tend to install gib board which reduces noise levels (Noiseline) or reduces wear and tear of walls (Toughline), so in the past, if our commercial marketing team had successful promotion with the schools sector we were dependent on the right people talking to each other and the manual spreadsheets being correct.
“In the past it might have caused bit of panic for the production team making the product – because they might not have heard what marketing was doing.
“This information is now fed into OneWorld, from these formal SOP meetings. It’s new discipline, but it massively reduces the need for rushed orders, inefficient use of productive capacity, excessive stock holding, expediting and general ‘manufacturing Black Magic’.”
Getting it right
This way of doing things is called MRPII and is not new to manufacturing. It is, however, difficult to get it right – and needs an enterprise resource planning (ERP) system like JDE OneWorld to make it possible.
“What’s great about OneWorld and MRPII is that, for the first time, Winstone Wallboards can integrate demand and supply. So we can see the effect of demand from our customers on our suppliers in an immediate way.
“For example, OneWorld looks at the recipe for making run of gib board (which is essentially two sheets paper with slurry mix sandwiched between). The ingredients are determined by the type of board needed.
“So the three monthly forecast might say we need more Aqualine (water resistant board) and Toughline. This will flow through the entire supply chain right to the suppliers of wax emulsion and fibreglass overseas, so they have plenty of warning to ship their products in time.
Today the supply chain is driven by customers. Previously it’s been driven by our manufacturers. Now, rather than us pushing products through the market, we’re having our customers pulling products through from the suppliers, and we’re simply step along the way.
Results
The effects are reduced inventory, fewer stockouts, less panic, less “noise” in the organisation, says Iles.
“There’s more efficient allocation of resources – the right plants make the right products in the right location, and we achieve more efficient planning changeover time from one product to another.
“We’re seeing more efficient plant utilisation because we’ve been planning better. The ultimate result will be improved cash flow,” says Iles.
New disciplines
“It’s meant new discipline for us to put in place. The informal way of doing things has been replaced by formal business processes and communication. It takes while to understand, but we’re starting to see the benefits now.
Our national production manager Campbell Benton has been driving these changes and is very impressed with the potential within JDE OneWorld – especially the very powerful and sophisticated forecasting programme. As he progressively automates the key processes, he will be able to spend more time dealing with strategic issues, rather than tactical day-to-day work.
Right people critical
“What’s interesting is that we had an idea this was what we could do – but until we had right people in place couldn’t quite see it. Recruiting national planning manager who understood MRPII implicitly (and who had implemented it successfully before) was the key to making OneWorld fly.
“It’s essential to get the right people in place. We were convinced we had the right technology, we then had to make sure we had all the right people.”
Technology is simply an enabler, emphasises Iles. “We could have continued to run as in the past, without an ERP system, but would have done so less efficiently. With ERP there’s no doubt you have to put more effort into in. People have to enter more data than they used to, and they have to ensure that it’s accurate. But this also means we can start turning this data into knowledge to improve decision making. As long as we use this knowledge to add value to our business, then the effort is worth it – and we have ‘smarts’ team of business analysts within Winstone Wallboards, who focus on turning this data into the knowledge we need.
“So you can either ignore the disciplines and have powerful expensive system being used only 10 percent. Or you can buckle down and do the hard work to get all the value out. We have found that the more we understand OneWorld, the more excited we become with the potential we can see – with MRPII and beyond into the e-business world. But you need the right people to get excited about it. They must be enquiring, energetic and have passion for continual improvement and ideas. If not, it’s just dollars down the drain.
