MRP Implementation With Geotechnical Ltd

Geotechnical Instruments Ltd, based in Leamington Spa, Warwickshire was founded in 1976 and specialises in the design and manufacture of measurement and monitoring equipment for the landfill and environmental markets. Many years ago the company introduced an MRP system which failed to live up to expectations (due to poor implementation) and as a result the company developed its own in-house system, which in time also became unsuitable as the business grew.

Tony Watson, Operations Director, said “When the company was smaller the in-house developed system was adequate for our needs but as we grew the lack of discipline and structure in the way the company had developed and used the system was becoming apparent and I can see now why the original system failed. The level of information that the current system was able to provide was unacceptable and a line was drawn in the sand when a new Finance Director joined and he was unable to easily extract the historical information he needed on products sales, margins etc”.

Evaluating MRP

Geotechnical started to evaluate the market, and initially looked at a number of systems costing around £80,000-100,000. They came across 123insight and attended an Evaluation Workshop. Said Tony; “What was key for us was the low cost of entry. None of the other systems offered a subscription option. We couldn’t afford to spend £100k, especially if we could not confirm what the outcome would be. Also, there was an internal barrier from some managers because of the previous bad experience with another MRP system, which would have stopped the implementation before it was started.”

Integrating MRP with Access Dimensions

The Financial Director also replaced the accounting system with Access Dimensions, which provides seamless integration into 123insight due to both systems employing the same SQL infrastructure.

The company set up a trial in their IT room over a three month period, which Tony cited was more to demonstrate to other managers that the right system could work. Training was arranged for April 2005, with four people attending the three day user training course, three attending the implementation course and two attending the administration course. All of the training was provided on the understanding that if they chose not to take on 123insight they did not need to pay for training. Of the training Tony noted; “The system itself is very user friendly. The support documentation is also good as it's a training manual not a ‘nuts and bolts’ manual.”

Implementation

The trial was deemed a success in July of that year and approval was given to select 123insight and to roll the system out across the company. During this process Geotechnical realised that much of their data in the existing system was of poor integrity. Also, working with structured bills of materials was new to the company, so they decided to completely overhaul the data. Tony commented; “We had more than 12 years worth of poor data through lack of maintenance. We planned to go through the data systematically, cleaning and adding new analysis codes so that when we went live with each product group we got the benefits. In real terms we reduced our part count from 20,000 to around 4,000 during a three month cleansing period prior to going live, with a phased transfer (by product group) during the period December 2005 through to implementation completion in April 2006.”

Benefits after go-live

A number of benefits were immediately realised once the system went live. Stockholding used to run at between £1m-1.2m, but was reduced to £800k. Stock inaccuracies, which Tony cites previously as their Financial Director’s ‘biggest bug bear’ was also dramatically reduced; “Previously we could not even guess what the figure was. We used to shut down the factory for two days a month to do a complete 100% stock check. Now we’ve introduced perpetual rolling stock checks, only checking a fraction of stock. The last stock check we did was accurate to within 0.2%. Features such as being able to attach PDF PO’s to emails and issue control have also be very beneficial.”

The go-live process made Geotechnical reconsider many of their normal day to day operations. Tony said; “When we went live we were trying to structure ourselves in line with requirements for material planning. People’s jobs changed with these new requirements. For example, we had a production controller but as this role was no longer required they were relocated to another position in the business. The latest release of 123insight included margin control. As a result we could make better pricing decision and were able to remove low profit items from our portfolio. Due to a combination of factors including 123insight we reduced our leadtime on our core product by 75%.”

Integrating e-commerce with MRP

Service accounts for nearly 30% of Geotechnical’s business and is also a high profit centre. At the time 123insight did not support service so Geotechnical decided to write their own system, working in conjunction with 123insight’s own development team to ensure compatibility with 123insight. They also use Web Portal, developed by approved partner Solweb to provide an online ecommerce system that integrates tightly to 123insight. The company was also considering a CRM system, but during talks with 123insight it was confirmed that CRM was due to be written for a forthcoming release. Geotechnical were instrumental in working with 123insight to form the blueprint which was used to develop the final product. Tony said; “We looked at other systems such as ACT! which we’d used without much success before. We are constantly looking for areas of improvement, such as CRM and service, and fed this back to 123 Insight Ltd. We see our relationship with them very much as a partnership. By working with the same development team there is potential for this to become part of the core product in the future - a win-win all round.”

Tony finalised; “Implementing 123insight was actually the first stage of the company’s re-invention. We also introduced lean manufacturing along with Six Sigma problem solving and Kaizen continuous improvement techniques during this period. 123insight contributed enormously to providing more information on profitability, which allowed us to make some radical business decisions. Late in 2006 we were acquired which resulted in structural changes at director level. Within the first year, due to the various improvement initiatives that we had implemented, including 123insight we trebled our operating profit. As an organisation we are now looking for growth and are re-investing our profits back into the company by recruiting new design engineers to provide a quicker turn-round of new products for release into the market. The proof of the systems success is in our profitability – we needed data to effectively improve our management of the business, and 123insight gave it to us.”