Manufacturers speed production with ERP warehouse integration

Understand how close ERP warehouse integration can reduce inventory and improve customer service. Learn the benefits of replacing legacy systems with best-of-breed ERP and SCM modules.

Manufacturing ERP systems aren't much good without tight integration to the warehouse and shop floor. Sometimes that integration comes entirely within a monolithic ERP suite. Other times, it requires tying together software from different vendors through ERP warehouse integration.

The Gem Group Inc. opted for the latter when it implemented IFS Applications, a componentized ERP suite, two years ago. Headquartered in Lawrence, Mass., and operating under the Gemline name, the company sells promotional items, such as pens and duffel bags, to distributors. It designs the items, outsources their manufacture, then custom-prints or embroiders them, often under tight deadlines.

Before installing IFS Applications, Gemline ran an old, highly customized SyteLine ERP system from MAPICS that was integrated with Frontstep's customer relationship management (CRM) package. The hardware, a Hewlett-Packard Unix server, was no longer supported. While the two applications served the finance and customer-service departments, the manufacturing side had to get by on Microsoft Access and Excel for such mission-critical tasks as scheduling, inventory and routing.

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Gemline wanted to process orders through manufacturing more efficiently to maximize use of materials and capacity and minimize missed orders. "Everything we do from an order standpoint is custom," said Peter Richards, Gemline's planning and scheduling manager. That means Gemline can't treat orders the way many manufacturers do, with processes that dictate when the product can be shipped. "Here, it's the other way around," Richards said. "You look at when the customer needs it, and then figure out how you're going to deliver it."

As a result, when the time came to implement IFS, "there was a big focus on scheduling," said Tom Conlon, Gemline's manager of business applications and a former IFS employee assigned to the project.

Getting started with ERP WMS integration

To automate its attached warehouse, Gemline turned to the WorkForce Productivity Solution Suite from Radley Corp., which, along with Intermec handhelds and a Loftware barcode server, has reduced data entry and improved accuracy, Conlon said.

Strictly speaking, Gemline doesn't have a warehouse management system (WMS), but Conlon said the Radley software serves as "WMS lite" that handles the core functions of a WMS, such as picks and put-aways. It doesn't directly touch the IFS software's 64-bit Oracle 10g database, which runs on an operating system backed by Oracle's Unbreakable Linux support program. Instead, the two communicate through application programming interfaces (APIs) that basically work right out of the box, Conlon said. A separate machine serves as the IFS print server.

Because the Radley system talks directly to IFS, Gemline workers can view an order's status in both applications, he said. For example, the raw material inventory for shop orders is tracked in IFS, and move orders within IFS can have the related staging and warehouse information from Radley attached to them.

The Radley system is also linked to a customized version of Kewill's Flagship multi-carrier shipping software that runs on a separate server, providing interfaces to Fed-Ex and UPS.

"We treat Flagship as a black box," Conlon said. "It handles all the ratings and uploads to the carriers."

 

Though the software has the ability to "shop" for the best ratings (shipping prices for a given box and destination), Gemline doesn't use the feature because customers usually require a specific carrier, he said. The company also uses Kewill's Global Trade Compliance software for shipments with overseas suppliers.

Gemline opted for the point-of-service transactions in Flagship -- picking logic and pick ticketing, for example -- over those in IFS's module, finding the latter to be less user friendly, Richards said.

The IFS CRM module sees widespread use, according to Conlon. Gemline's in-house and remote salespeople use it to manage quotes and special pricing agreements, while administrators record changes of address. Detailed financial data shows each customer's credit situation and payments and serves as a mechanism for checking order accuracy. IFS document management keeps each customer's paperwork in one place, Conlon said.

Benefits of ERP inventory management software

The front-end ordering system underwent a near-total transition from paper. Previously, order takers looked in notebooks to see what imprints and embroidery were available for each item. The information was entered into the rules generator in IFS's Sales Configurator module, which outputs the shop order that manufacturing uses to route the product through its steps. Conlon said these shop order controls have speeded up work and reduced inventory by making it easier to substitute raw materials.

"Inventory reduction has helped reduce some of the need to have large quantities of pallets in the warehouse and have all the associated handling and management costs," Richards added.

Auditors said the last physical inventory came within $400 of the IFS figure -- accuracy that he said is the best in his 30-year career. IFS Applications also support a lean manufacturing initiative.

"Through a combination of IFS and lean methodologies, our WIP [work in process] has probably been reduced by about 80%," Richards said. Gemline's on-time delivery rate exceeds 99%, up from the mid-90s, and lead times have been shortened by approximately 30%. "It's the visibility that IFS gives you in terms of orders," he said. "We know at any point in time where any order is, and we know everything that is going on with that order."

If he were to do one thing differently, Richards said, he would resist the temptation to customize the software to fit existing business processes, rather than adopting the methods enforced by the software. "You had to look inward and deeply at how you were running your business."

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