Senior Flexonics

The need for change

When it came to the decision to implement a new Enterprise Resource Planning (ERP) system, Senior Flexonics Czech´s (SFC) primary driver was the need to improve its supplier rating. The goal was to achieve an ‘A’ rating from its most important cus- tomers, Renault and Ford, according to the Global Materials Management Operations Guideline/Logistics Evaluation (MMOG/LE). SFC also aimed to lower its stock levels, decrease the time needed for monthly physical inventory checks, as well as reduce unproductive time owing to more efficient production planning. The company also aimed to reduce the costs associated with the rental of returnable packaging.

The functionality of the SFC’s existing ERP system did not facilitate the processes which would have enabled the company to achieve its business goals, especially those relating to logistics and production. The public tender process for a replacement solution stipulated that only ERP suppliers with verifiable references could apply. Only three vendors took part in the final stage of the proceedings, all of which had to submit a pre-implementation study. The selection pro- cess was performed in a strict manner by a committee consisting of managers from individual departments, using weighting coefficients to rate the suppliers with the highest being vendor experience and references in SFC‘s field of business. SFC chose Minerva primarily because it had the longest record of successful projects in the Czech automotive industry. The experience and professionalism showed by Minerva‘s consultants during the proceedings also positively contributed to winning the contract.

System implementation

The entire QAD ERP implementation which only took 6 months and was finished by January 2011 was divided into the follow- ing stages: Implementation team training, process analysis and optimization, data processing, load tests and start-up operations. During the implementation, SFC optimized its processes, espe- cially those relating to production and logistics, where it utilized Minerva‘s experience and best practices regarding the use of barcodes in warehouse management, distribution, and production record keeping. SFC also benefited significantly from Minerva’s expertise in Electronic Data Interchange (EDI).

In terms of impacting the company’s existing infrastructure, SFC did not have to make any substantial changes its IT platform with the implementation requiring the installation of just a single new physical server on which the QAD ERP solutions runs. Users simply log into the application using a client that runs on Windows.

Benefits of the QAD implementation

The primary benefit from the QAD ERP implementation is that SFC achieved its goal of achieving a repeated MMOG/LE A rating during its annual evaluation by its core customers, which has strengthened the company‘s market position as a stable and reliable supplier in the automotive industry. The new system also helped reduce inventory levels, exceeding an average inventory turnover reduction target of three days by delivering an actual reduction of 8.3 days. It was the same when it came to a reduction in the time required for monthly physical inventory checks, with QAD delivering an actual reduction of almost 30% against a target of at least 15%. Another area in which SFC required improvement was the reduction of unproductive time as well as a lowering of overtime and unscheduled work shifts by at least 15%. This was to be accomplished by optimizing the production plan with Minerva again not only meeting this but exceeding it with an actual improvement of 15.5%. A final aim was to reduce costs related to the rental of returnable packaging by 15%, something the new QAD ERP system implemented by Minerva again exceeded, delivering an actual reduction of15.7%.

The evaluation of the abovementioned metrics was performed after six months of standard operation of the system. Above all, SFC‘s customers value the comprehensive accuracy of deliveries, adher- ence to agreed shipping dates, the provision of flawless shipping documentation, and the confirmation of orders via EDI, all of which were improved by the QAD ERP implemented by Minerva.

The biggest innovation driver connected with the implementation was the extensive implementation of barcodes and barcode readers in the logistics and production departments. Data gathered during the production process enables the work of individual employees to be displayed on a big screen on the shop floor which means that everybody can see the productivity of each individual worker in the current work shift, indicated by a colour scale. This has had a substantial motivating effect with employees becoming more involved in reducing unpro- ductive time due to maintenance, machine setup, and so forth. During the implementation, SFC also installed terminals for online production reporting meaning that accurate and current production information is now available, which in turns, has enabled SFC to plan more efficiently.

„What we expected of the new system was realistic, well-mapped and linked to concrete metrics to achieve the goals set in the contract,“ said Jaroslav Majzlík, IT Manager at SFC. He concludes, „Minerva consult- ants have always tried to find the best solution supported by the QAD ERP system; their expertise is simply above average.“