pressdudes
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A Canadian
manufacturer retools its supply chain for global commerce
BY BURKE CAMPBELL AND MURRAY CONRON In a push to meet supplier and buyer deadlines and
maintain quality standards as a globally competitive appliance maker, Guelph,
Ont.-based W.C. Wood will coordinate all the internal supply processes in the
manufacturing, shipping, and distribution of its products. This rigorous
approach to supply chain management (SCM) has meant a fundamental redesign and
reengineering of plant operations. W.C. Wood is a successful
privately-owned Canadian manufacturer that produces refrigerators, freezers, and
other appliances, supplying major vendors with its own labels and “store
brands” for giant retailers. Vice-president of finance Ted Sehl says at a time
when most firms are hesitant to proceed with new IT initiatives, the company
continues to invest in technology and staff training. Also, its major suppliers
and vendors – Panasonic is one – have become technologically advanced and
expect the same from their business partners. Like many firms, W.C. Wood
realized that survival meant becoming a truly modern enterprise. SCM works to transform enterprises by reducing
costs and increasing productivity. Traditional supply chain strategies focus on
planning for production. The enterprise sees production demands resulting from
sales, so the purchasing department orders the supply of materials required for
production. Uncertain of suppliers’ abilities to meet sudden demands and short
lead times, companies tend to react by increasing inventory as a stock buffer.
Other factors then conspire against the best-laid plans – shorter competing
product life cycles, shorter notices, a reliance on outsourced component
manufacturing and distribution, expanding markets and globalization. Mastering
these complexities requires greater visibility into the operations and
capacities of suppliers, customers and other supply chain partners. While a division within a company may handle its
own enterprise resource planning (ERP) with conventional systems, the messaging
and signaling required to manage cross-enterprise and interdependent processes
are frequently manual and resource-intensive, creating a bottleneck. W.C. Wood investigated SCM software giants such as
Oracle and SAP, eventually going with J.D. Edwards because it says the software
maker had good SCM tools for a medium-sized enterprise. W.C. Wood found a
customizable system and good rapport with the vendor’s local user group. In
addition, J.D. Edwards has at least 200 licensed Canadian sites in manufacturing
and distribution. While the software solution was standardized, it
was specific enough for a broad range of manufacturing processes, without having
to be modified and customized at every turn. “[This is] modular, out-of-the-box software, so
customers can pick their modules, not necessarily the entire package,” Alison
Wheeler, country manager for J.D. Edwards Canada notes. “They may want to
enhance only SCM or one other area.” Wheeler suggests clients go through an analytic
rationalizing process to help them estimate the cost of introducing technology
and projecting the benefits. “Each situation is unique and each client
individual. We have online tools to do value assessments tied to
performance-indicators. This helps the client see what has to be done in order
to improve its business.” Payback on technology expenditures comes in one to
five years, depending on the organization, says Wheeler. In today’s tight
markets, such an investigative approval process is essential. “No SCM or ERP
project will be approved by a board of investors without this kind of due
diligence.” Along with the software, W.C. Wood got testing and
training services and a suite of supporting software tools. Then the firm worked
with IT consultants to evaluate the business requirements, plan and configure
the system, test it and train staff, then post go-live support. Further, the
process generated complete reference materials to allow streamlining and
documentation of the implementation. Many small- and medium-sized companies
agonize over the disruptive effects of technological changes, but Sehl says
it’s easier for a medium-sized firm to decide what’s needed. However, it
must have a sufficient number of employees on a project to ensure success. Adds
Sehl, “There is always the temptation to drag people away to work on core
business problems, but these practices undermine installation, testing, and
training and can eventually doom an IT project.” Further, by creating a dedicated internal team –
one that is both eager and able to learn – W.C. Wood avoided becoming too
consultant-dependent. Carol Begg, director, consulting and training services,
J.D. Edwards Canada tried to enable such a team. “Our implementation crew
trained the staff so that they could take over and solve any problems that might
arise after the consultants had signed off on the project,” she explains. At
W.C. Wood, the goal of installing SCM is to
increase inventory visibility and accessibility. Eventually, the new technology
will create a vendor-managed inventory, where parts are automatically reordered
and inventories replenished. “We want to be more responsive to customers. To
do that, we need to be able to retrieve key information at will,” says Sehl. Today, the challenge for W. C. Wood is to excel while moving its products into a broader international marketplace. The firm enjoys a logistical edge in its North American market. It is able to distribute products more quickly, reliably, and cheaply over land, while its Asian competitors must freight by air or ship first, driving up delivery costs. With a wakeup call from tech-savvy partners and the understanding that no advantage is permanent, W.C. Wood has launched headlong into SCM. With the power of a streamlined supply chain, automatic replenishment and inventory visibility, it now has the tools with which to conquer global markets. HOW
SUPPLY CHAIN MANAGEMENT
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