In 2002, TOMASCO mulciber Inc. was running on only two cylinders. The automotive metal stampings and weldings manufacturer, formed in 1987 as a joint-venture company for the Honda supplier system, was having difficulty meeting Honda's requirements for Delta certification and fulfilling documentation requirements for ISO certification. The company often also found itself coming up short on inventory for its work in process, which meant consuming its safety stock or missing shipments, because of incorrect requirements data in its information system.
At the time, TOMASCO was using an IBM AS/400-based system and Honda-written MRP software, which American associates found difficult to use and maintain. As a result, various departments had been purchasing their own software and creating independent databases.
In late 2003, a small group, led by Marty Staats, assistant vice president, Business Division, knew that the time had come to overhaul the legacy systems. They brought in Karen Patterson of Revolution Group to help map processes, identify informational gaps, and eventually develop a request for quotes for a new system.
Over a four-month period, the team evaluated 49 business processes and identified 131 manual processes, 69 independent databases, 88 duplications of effort, and four interfaced databases. They also learned that TOMASCO was using 14 different software products on four platforms.
The team determined that any new system would have to manage all aspects of TOMASCO's manufacturing and business operations, be cost-effective, easy to implement, and certified by Honda. It would have to be browser-based to enable access from anywhere; multi-lingual, including Japanese; and capable of real-time shop floor data collection.
The team presented its analysis, cost estimates, and ROI projection to then-President Yasuharu Masuda, who gave them the green light. "He challenged us to find the best system and software for TOMASCO with the stipulation that we must have the buy-in and support of the American associates. He understood that we might need to go beyond the traditional ERP offerings to find our best fit," Staats recalls.
To fulfill this tall order, the team selected Plexus Systems LLC for its on-demand, Web-based software system. The Plexus Online implementation included 15 functional modules, which are accessed using a Web browser. The core implementation took about 18 months, and modules were added over the following year, as resources permitted, Staats says.
As a result, TOMASCO says it has reduced its work-in-process inventory by 40% and optimized its finished goods inventory, improving shipping performance. An EDI module within the Plexus system has enabled TOMASCO to keep up with changes in Honda's system, and TOMASCO has met both ISO certification and Honda's 100% traceability requirement.
The company realized a return on its $750,000 investment in software and services within 14 months of completing the project. As TOMASCO likes to say, the project has transformed a reactive company into a proactive one.
The judges on Managing Automation's Progressive Manufacturing awards panel were impressed by this overhaul and rapid return on investment. What stood out for one of the judges, Eric Mittelstadt, CEO of the National Council for Advanced Manufacturing (NACFAM), was TOMASCO's "total focus on customer needs and requirements, and [ability to translate] them into significant and far-reaching internal operational improvements."
It was the comprehensive nature of the project that drove TOMASCO into the High Achiever's circle for Operational Excellence Mastery. "The Japanese have a saying that the company that succeeds is the one that does everything very well, not just one or two things," Mittelstadt says.
No Gain Without Pain
A look back at any successful project tends to gloss over the pain points. Staats recalls: "When we began actual implementation, our management team was so constrained by time and jaded by their prior system experiences that they were wary about investing too much into the implementation." This meant that the project began with a small group of "super users," leaving "a knowledge void in our middle management." Buy-in did come, however, after users began to gain real-time visibility into the shop floor.
"Our biggest headaches were changing those processes and procedures that had been shaped around the limitations of our prior systems," Staats says. As the Plexus system kicked into gear, those time constraints eased, and more and more people got on-board. "We quickly re-engineered most of our processes to take advantage of the efficiencies that Plexus afforded," he adds.
The system overhaul has also brought a greater understanding of the interactions and interdependencies of the various functional areas, Staats says. "This has led to new ideas, suggestions, and projects to improve transactional efficiencies."
To manufacturing companies contemplating system overhauls, Staats has this to say: "I think the biggest mistake made is in the selection process methodology. I have seen many instances where an organization selects the wrong solution and then continues to pump resources — both financial and human — into trying to make it work. Don't just invite the known vendors into your facility to demo their products. Chances are that if your current system is outdated and inadequate, almost anything will look good at first."
Narrow down the potential vendors into a short list, and "invite them on-site for demonstrations and really kick the tires," he says. Also, make sure to have cross-functional representation on the evaluation team.
Today, TOMASCO is cruising along in high-performance style. Noting that Plexus continuously develops new functionality and tools, Staats says, "Our biggest challenge is to continue to keep up." He's well-aware that new automation opportunities are likely waiting around the very next bend in the road: "The next area of focus will be more machine interface and integration of the supply chain," he says.