Reducing Inventory Obsolescence By More Than 50%
Raychem RPG set out to achieve complete integration of its operations on MFG/PRO. It succeeded, and achieved significant bottom line benefits.
THE COMPANY
Raychem RPG Limited is a 50:50 joint venture between Raychem Corp., USA, a $2 billion inter-national company, and the RPG group, one of the largest industrial houses in India.
The company supplies critical components to the telecommunication, power, pipeline, and electronics OEM sectors. These products are primarily based on polymer technology and many of these have a unique "shape memory" characteristic that provides vital joints to cables, wires, and pipelines.
Raychem RPG is 10 years old and has sales revenue of over $20 million annually. It has a manufacturing facility in Vasai, near Mumbai, and sales offices in New Delhi, Bangalore, Calcutta, and Madras. Raychem RPG is headquartered in Mumbai, and employs approximately 110 people.
THE CHALLENGE
In 1995, Raychem RPG faced numerous challenges. First, the company was embarking on a period of exponential growth over the next three to five years. It wanted a system that could manage that growth. Second, the company had different systems for
Order Entry/Invoicing and Financials, so integration and consolidation of information was a problem. Additionally, duplicate data entry and error-prone manual processing were causing problems. Finally, the company did not want to add headcount to the operations staff.
THE SELECTION PROCESS
Raychem RPG had two options: make major changes to its existing software, or implement an ERP package. The company chose the latter option.
Raychem RPG considered all the leading ERP suppliers, including SAP and J.D. Edwards, and chose QAD for several reasons. Among the key reasons were: speed of implementation, open system architecture, cost of ownership, and ease of implementation.
"MFG/PRO is so easy to administer that it can be supported locally by one person who doesn't have to be dedicated to the IT support role," says Hormuze Tata, assistant manager, IT. MFG/PRO was implemented at Raychem RPG in a record time of 100 elapsed days for all modules.
THE BENEFITS
After the transition to MFG/PRO, the company has simplified processes and reduced cycle-times. Some achievements include:
- Reduction in inventories from 120 days to 75 days
- Reduction of inventory obsolescence by over 50%
- Reduction in production cycle time from 18 days to 10 days
- Increase in on-time deliveries from 75% to 95%
- Reduction in dispatch paperwork from five documents to one document.
SUMMARY
Raychem RPG set out to achieve complete integra-tion of its operations on MFG/PRO and consolidate all its operations onto a single system to support exponential growth without adding operations staff. Having achieved these results, the company is considering QAD's e-commerce solutions, to integrate the entire value chain from vendors to distributors.