Customer Solution Case Study
/ / New ERP Solution Gives Steel & Alloy a Rich Data Source to Mine
Overview
Country/Region:United Kingdom
Industry:Manufacturing
Customer Profile
Steel & Alloy Processing is the United Kingdom's leading automotive steel processor.
Business Situation
Steel & Alloy's ageing enterprise management systems were constraining the company, and hampering its ability to optimise processes.
Solution
Microsoft® Business Solutions-Navision's®functionality enables precision supply chain decision-making and management. Capacity planning and full traceability has enhanced customer relations significantly.
Benefits
Improved Automated Services
Real Time Tracking of Stock
Consolidation of Processes / "MicrosoftBusiness Solutions-Navision helped us overcome the classic problem of being data rich but information poor."
Crawford Fisher, Financial Controller, Steel & Alloy Processing
Steel & Alloy Processing is the United Kingdom's leading automotive steel processor. In business since 1969, the company remains privately held and has grown considerably over the years, investing over 90 percent of all profits back into the business. Currently operating with annual revenues of £85 million, Steel & Alloy fulfils a fundamental role in the supply solution between raw steel producers and parts manufacturers. It needed a system that could handle sophisticated supply-chain management data, and Microsoft® Business Solutions-Navision® met those needs.
Situation
Steel & Alloy is a tertiary supplier in the highly competitive automotive manufacture industry. Located in West Bromwich, United Kingdom, where it currently occupies two sites, each in excess of 200,000 sq. ft, it is centrally placed at the centre of the United Kingdom's manufacturing industry. Sourcing steel worldwide, primarily from Western Europe, Steel & Alloy processes 320,000 tonnes of steel per annum, and provides a range of flexible services to major United Kingdom suppliers to the automotive industry, as well as directly to U.K. based original equipment manufacturers.
As a key element of the supply solution between raw steel producers and parts manufacturers, Steel & Alloy's primary differentiator is its management of steel stock, from customer planning through to delivery. The company also manages third party stock on behalf of customers and suppliers. As specialists in the provision of raw steel 'blanks', slit or cut from coils, its annual supply contracts are based on schedules received from customers. This gives Steel & Alloy a top-line estimate of demand with which it negotiates supply requirements from suppliers. These estimates are defined into quarterly and finally, fixed weekly delivery schedules. At each stage, estimates and call-offs become increasingly detailed, incorporating delivery times and locations.
The need to maintain readily accessible data, capable of being traced from planning through to the parts supplier, was a primary reason for Steel & Alloy taking the decision to change its enterprise management systems. The company was using an ageing character-based steel stockholder package, which interfaced to Tetra C2000. However, these systems were not meeting Steel & Alloy's needs. Crawford Fisher, Steel & Alloy, Financial Controller, says, "We faced the classic problem of being data rich, but information poor."
A major concern was that implementing new software would lead to a significant amount of business re-engineering which could compromise the specialist nature of the company's business processes. "There was a real risk that our business would be torn apart if we acquired the wrong product," says Fisher. However, putting in place the right software would give the company with an opportunity to start optimising its processes. "We were willing to make change where it was appropriate and where it could be undertaken with the minimum of disruption," continues Fisher.
In addition, Steel & Alloy had been unable to find a solution in the market that met its needs, "We looked at large enterprise resource planning suppliers who had a presence in the automotive sector, but couldn't find the perfect fit—we were not confident of finding a suitable partner," says Fisher.
Solution
Working with K3 Landsteiner, a Microsoft®Gold Certified Partner, Steel & Alloy finally selected a flexible combination of modules from the MicrosoftBusiness Solutions-Navision®. "It was apparent from the early stages that K3 Landsteinar was prepared to listen and understand our needs," says Fisher. Rather than prepare a detailed list of requirements, both companies agreed to a simple, three page term of reference. "We didn't want to create a bible that set things in stone," says Fisher. "Both sides recognised the need to be flexible as the project proceeded."
The scheduling and development of the project began in October 2000, with the introduction of financial ledgers from December 2000.
A working partnership between the two organisations enabled recommendations to be discussed, modified, and then included within the implementation plan, thus avoiding the rigidity that is often the outcome of pre-designing everything from scratch. This incremental approach allowed Steel & Alloy to 'buy into' the processes as they were developed within the context of what each department required.
The design and implementation phase took seven months, and included the creation of new, core business processes. Once completed, the company rolled out the initial phases of the system to its 80 plus users in June 2001.
Benefits
Improved Automated Services
Steel & Alloy has now been able to automate much of the raw material throughput, from the pre-allocation of steel at the point of entry into the supply chain through to sales and work orders, including location tracking. Control over what was actually happening to the products is maintained by references allocated and entered into Microsoft Navision at the railhead or other point of entry into the supply chain.
The company now receives emailed spreadsheets from customers, which are taken directly into the Microsoft Navision system for scheduling updates. References are created according to customer schedule and pre-allocated. When the steel arrives, it can be booked-in rapidly, using either purchase order number, mill coil number, or batch reference. These receipt details are compared with the information already inputted, linking the product to the original customer part references. Barcode scanning technology, utilising low radio frequency, is used to facilitate accurate recording of stock movements within the various plants.
"This gives our customers a better service because we can assure them we have full traceability, from both their numbering references and ours," says Fisher. "Administrative processing time has also being minimised with Microsoft Navision for instance, we don't need sales orders but can skip straight to work orders," says Fisher.
Data garnered from this overall management system may be used in various ways, such as presenting company usage histories online and ensuring current requirements are validated.
Real Time Tracking of Stock
Steel & Alloy also operates a full warehouse management system for some of its customers. Within this system, business alert emails are utilised to advise other vendors of current stock holdings and customer usage for invoicing purposes. "When you are managing other people's stock, keeping tabs in real-time is critical. The Microsoft Navision system has been successfully developed to allow this and our customers certainly appreciate it," confirms Fisher.
Consolidation of Processes
In addition, Steel & Alloy has developed a self-billing transportation system, which helps the company plan transport cost cash flow from a position of certainty, and allows it to retain a higher level of cost control on critical-cost components.
"We are attempting to consolidate all company processes within the Microsoft Navision environment, be it a forecast, a planned maintenance system or a proof of delivery control," says Fisher. "Gone are the days when individually owned databases, created by users, were the norm."
Steel & Alloy is also in the process of developing a range of new financial indicator reports that provide business managers with a greater level of understanding about what is happening inside operations.
The company plans to utilise the solid platform that has been established to ensure that it continues to reap the benefits of improved operational cohesion. "We now have a platform on which we can continue to drive business efficiency, effectiveness and competitive advantage. All future systems will be built with that in mind," concludes Fisher.
Microsoft Business Solutions
Microsoft Business Solutions offers integrated business applications and services that allow small and mid-sized organizations and divisions of large enterprises to connect employees, customers, and suppliers for improved efficiency. The financial management, customer relationship management, supply chain management, and analytics applications work with Microsoft products such as Microsoft Office and Windows® to streamline processes across an entire organization, giving businesses insight to respond rapidly, plan strategically, and execute quickly. Microsoft Business Solutions are delivered through a worldwide network of channel partners that provide specialized services and local support tailored to a company's needs.
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