When Sun Chemical Corp. (Fort Lee, NJ) and Eastman Kodak Co. (Rochester, NY) formed the Kodak Polychrome Graphics (KPG, Norwalk, CT) joint venture in January 1998 and then purchased Horsell Graphic Industries and merged it into the business in April 1998, officials at the new company immediately set out to replace the legacy ERP systems each company had been using with a single platform, the iSeries-based Prism ERP system from SSA Global (Chicago). Prism went live just a few months later.
Soon, however, KPG officials realized a key piece of the picture was still missing. While KPG now had a consolidated system for tracking financial and other transactions, it lacked a common reporting platform that would allow demand planning and other organizations to easily access data generated by the new ERP system and other systems. So, at the end of 1999, KPG deployed Graphical Performance Series (GPS) business intelligence software from Vanguard Solutions Group Inc. (Glen Ellyn, IL).
GPS WINDFALL
"Prism could generate reports, too, but required programming time to create them," explains Nigel Penhearow, KPG's business operations director for the U.K. and Irish markets.
Currently used on a daily basis by KPG's IT and demand planning personnel, as well as for major projects, GPS has helped the company consolidate warehouse operations, cut production cycle times, improve picking and order accuracy, monitor product shelf life, calculate costs per customer, reduce losses due to out-of-stocks, determine order profitability and significantly slash freight costs. In fact, since implementation, freight costs have been cut by about 50%, a figure that translates into hundreds of thousands of dollars over the past four years.
BI WITHOUT THE DATA WAREHOUSE
Now owned solely by Eastman Kodak and part of its Graphic Communications Group, KPG provides products and services to the graphics communications market including printing plates in stock and custom sizes. With operations on six continents, the company generates about $1.7 billion in annual revenue. Since plates are cut to size, turnaround time and waste monitoring are critical. In addition, plates have a finite shelf life; therefore, expiration dates must be monitored so product can be shipped before it becomes out of date.
At KPG, GPS pulls about 99% of its data from the Prism ERP system. "However, it can pull data from any ODBC-compliant database," says Michael Powers, director of marketing at Vanguard Solutions. "Our customers use GPS to consolidate data from a variety of databases, including ERP, CRM, Logistics, Demand Planning, even Excel spreadsheets."
Most reports run in just a couple of minutes. The eDeployment function sends analyses to the appropriate recipient via e-mail. Users also can set up personalized information views and schedule them to be delivered at regular intervals.
The first major project to use GPS was a consolidation of U.K. warehouse operations in Watford, a town located about 10 miles north of London. With inventory and shipping divided 50/50 between facilities in Watford and a second KPG facility at Leeds 150 miles away, it was clear consolidation could cut operational costs. "Merging inventory could reduce stock levels while providing better service to customers," explains Penhearow.
In preparation for the move, GPS was used to track all sales activity via postal code using information from Prism. Movement of inventory, as well as factory replenishment, was then planned and carried out by postal code. This allowed KPG to transfer slow moving product first and then shift blocks of inventory to ensure adequate supply for customers in a given postal code.
Moving inventory in these controlled phases made the warehouse move transparent to customers. At the same time, British Telecom sequentially switched over phone accounts from different areas to route customer calls to Watford. The project went so smoothly the move was finished by the end of August 2002, a full month ahead of schedule.
GPS is now being used for another warehouse move, this one from the existing facility in Watford to a new one a mile away. It began in August 2005 and is scheduled to be completed by the second week of September 2005.
SLICING CYCLE TIMES
KPG has also used GPS to cut order-to-delivery cycle times. In addition to the warehouse, the Watford location has a small production plant that cuts printing plates to size. "Some competitors could turn around cutting in 48 hours, but we were cycling about five days from order to delivery," recalls Penhearow. Running GPS every three or four hours to analyze cutting helps KPG identify glitches, as well as orders, that are cut more quickly than expected. As a result, cycle time has been reduced to 48 hours and "we are looking for further improvement," says Penhearow.
Sales personnel receive beginning-of-the-month and end-of-the-month reports from GPS. The beginning-of-the-month reports are organized by customer and list stock and non-stock -- or cut -- products purchased in the past six months. Products being purchased for the first time are flagged, as are products the customer purchases consistently but has not ordered that month. This information helps salespeople forecast new sales and allows them to provide proactive customer service by making sure regularly ordered items are not accidentally omitted.
Prior to month's end, sales personnel receive a report that compares order value for the month versus the previous two months. With this information, salespeople know how they are doing for the month. It also pinpoints under-spending customers and gives sales an opportunity to generate additional orders.
REAL-TIME INFORMATION
GPS also is helping KPG's quest for perfection in picking accuracy -- currently at 99.5% -- and order accuracy -- currently at 99.9%. "GPS allows us to see picking activity at any moment," says Penhearow. In just a few seconds it can show what shipped today. Working with information from Prism and data collected by bar code scanners in the warehouse, KPG can tell in real time what has shipped, whether daily targets have been reached and what will bill the following day. "This is powerful information to have. As we start to reach the end of our monthly fiscal cycle, we can see sales coming through and know if we will hit our target," he adds.
Another quickly-run report monitors expiration dates of printing plates, film proofing products and chemicals. This knowledge allows KPG to ship products before they expire and reduces losses related to out-of-date stock.
Another GPS report monitors the value of cutting waste and stock adjustments made over the course of a month. This allows management to identify any negative or positive adjustments in inventory, drill down to item and location and track deviations. As a result: "We can do detailed investigations into variances on a daily basis," reports Penhearow.
MONITORING DAILY INFORMATION
Recently, KPG began testing GPS' Extension Builder module, which allows information to be drawn from multiple data sources including outside vendors' systems. With Extension Builder, KPG plans to combine ERP or Excel spreadsheet data with information from its Manugistics Group Inc. sales forecasting system. Consolidating data from the sales forecasting system will allow KPG to monitor demand on a daily or weekly basis, compare it to forecasts and adjust replenishment plans accordingly.
KPG also is looking at the possibility of pulling data into GPS from systems operated by some of its service providers, including its freight carrier, Pall-Ex Ltd. (Ellistown, U.K.), as well as the Target Express parcel shipment network. Analyzing data from carriers will help the company control freight costs by, for example, computing how much it costs to ship to each individual account each month. That's an extremely important consideration with fuel prices at $8 per gallon in the U.K.
Eventually, KPG may also be able to reconcile inventory faster by pulling data from its CODA Financials Inc. financial intelligence software and matching it with data from Prism.
Extension Builder also will allow KPG to pull and analyze information from vendors. In fact, in one of its earliest uses of Extension Builder, KPG matched proof of delivery information from a carrier to the shipping file and identified a performance problem.
KPG also has used GPS to analyze orders from small accounts in terms of order size and frequency. As a result: "We have set a minimum order value for customers and reduced shipping costs," notes Penhearow.
REGULATION COMPLIANCE
And GPS helps KPG comply with European Union rules related to shipping chemicals by truck, which require specially qualified drivers and payment of fees. "Since the fee levied is the same if the shipment consists of one cubetainer or one pallet, we found we could save a significant amount of money by consolidating orders," he explains.
The company also has realized numerous "soft" benefits such as reducing write-offs because slow moving inventory is identified before it reaches its expiration date, improved customer satisfaction resulting from better cost control, shorter cycle times and generation of new business.
"GPS gives us truly measurable results," says Penhearow. In addition, training needs are minimal. Most users need only an hour or two of instruction. Power users complete two or three days of training to learn how to define and pull the information they need and format reports.
Even though KPG has used GPS for several years, Penhearow believes there is more he can do with it. "We come up with ideas every day for new ways to use GPS," he concludes.