An enhanced enterprise resource planning (ERP) system has transformed Siddco Plastics’ operations, reports Benjamin Daniel
in its third implementation of an enterprise resource planning (ERP) system, the UAE-based plastics manufacturer Siddco Plants is confident it has at last found the perfect tool to optimise its operations.
While two earlier installations were each unable to deliver key functionalities, a switch to Epicor 10.1 ERP recently is providing all information and reports the Sharjah-based firm needs to ensure quality, profitability, and environmental accountability, according to Saymaad Mansoor, head of IT at Siddco Group.
“The group’s vision for IT is to create a corporate culture whereby business intelligence is driven through collaboration and standardisation of processes,” he told Packaging MEA.
“When we decided to first invest in an EPR system, we chose a solution that had very strong financial capabilities but couldn’t provide us the features we needed to efficiently run our manufacturing processes. Our core business being manufacturing, it wasn’t long before we decided to change to another ERP solution.”
The second solution, however, offered an extremely rich feature set and capabilities for manufacturing but lacked all the functionality needed by the finance and accounting teams, he explained.
“We were essentially working on several disparate systems,” said Mansoor. “We had one system for sales, one for manufacturing, another for accounting and finance, and yet another for quality.
“The lack of visibility and transparency across all departments posed several challenges for our team. For example, because our sales team didn’t have visibility of our manufacturing schedule or inventory, we had instances where sales associates ended up booking several jobs simultaneously that required the same machine. This unfortunately meant that some customers were not going to get their orders on the promised date which obviously wasn’t good for customer satisfaction.”
The lack of an integrated ERP system that provided a holistic view of the business was a particularly acute problem for the finance team. Siddco Group financial manager Faisal Memon said he was unable to provide an explanation for company figures,
“My job is not just to present financials to the management team at the end of each month,” he said.
“I need to understand why the numbers are what they are. For example, we had months where there was significant variance in our cost of sales [COS] and short of reporting the numbers to the management team, I couldn’t explain why we were seeing the variance. This meant that we couldn’t find the root cause of the problem, which ultimately had an adverse impact on our bottom line.”
But although the Siddco team had a business justification for a third change in its ERP system, it was its commitment to sustainability that triggered the change, Zakee Siddiqi, chairman and CEO of Siddco Group, explained to Packaging MEA.
“I firmly believe that while the goal of the business might be to grow the bottom line, we need to do it in a socially responsible way,” he said. “A couple of years ago, we took a decision to invest in 10 state-of-the-art, fully automated, multilayer, high-speed blow-moulding machines that would allow us to manufacture environmentally responsible plastics. However, in addition to having the right machines for the job, for compliance purposes, we needed to ensure that on the back end, we had 100% traceability of every single component/material, from the minute it came in the door to the minute we shipped out a finished product. This would only be possible if we had a robust, unified ERP solution.”
Customisation over six months
Having gone through a couple of iterations, the group was very familiar with all the ERP solutions available in the market, said Mansoor.
“With a large install base, Epicor has an extremely good reputation in the manufacturing sector,” he said. “I would venture to say that Epicor is the No1 ERP vendor for the industry, so when it came to selecting a new ERP vendor, it wasn’t so much a selection process as it was a conversation with Epicor to understand the capabilities of the solution and make sure that the solution would meet the extremely specific requirements of our business.”
While Epicor’s reputation in the market gave them the inside track, it was the ability to customise the solution, with relative ease, that ultimately led Siddco Plastics to settle on Epicor.
“For us, it wasn’t enough that the Epicor solution was customised for manufacturing, we wanted it to be customised specifically for plastics manufacturing. So, in addition to leveraging some of the out-of-the-box capabilities, we made more than 600 additional customisations to the software to suit our specific needs. These include a specialised configurator that now allows us to identify and track any product by a 26-digit unique number and over 115 business process management [BPM] commands.”
All said and done, the Siddco Plastics team spent six months customising the Epicor solution and then another eight months on testing the new system before going live in January 2014.
Speaking the same language
With the entire company now operating on one uniform ERP system, 40 users across sales, purchasing, manufacturing, quality, logistics and finance and management have access to the information they need with just a few clicks. Coupled with the feature-rich, easily customisable reports and dashboards, Siddco Plastics associates now have the ability to make better, faster, real-time decisions that have a positive impact on the business.
“The reporting has definitely been one of the biggest benefits of Epicor ERP,” said Mansoor. “With our previous system, each time we wanted a new report, we had to work with the developer to set up the specific report. With Epicor, not only do we have the ability to create certain key report templates that are accessible to the entire organisation but each user can set up his/her own customised report or dashboard without any assistance from the central IT team. As of today we have over 50 reports and a 100 dashboards that we use daily to make critical business decisions.”
For sales, visibility of production schedules and inventory levels means that associates can now manage customer expectations better. With the ability to analyse customer sales data as well as costs of every single component and raw material, the management team has recently rolled out a standardwork process called ‘conversion margins per turn’. In this process they can identify certain customer-product combinations that have low margins and then decide what are the next best steps for the business.
Eliminating human error
Implementing Epicor ERP has allowed Siddco Plastics to significantly reduce the element of human error in manufacturing. With over 4,000 stock keeping units (SKUs), prior to Epicor the onus was on the associates on the shopfloor to make sure that they didn’t mix up jobs or manufacture the wrong product for the wrong customers.
With Epicor, the entire manufacturing process is automated with just a scan of the 26-digit barcode. Moreover, the system has been configured to flag a process and require a manual override if it believes there might be an issue.
From a quality standpoint, since the implementation of Epicor ERP, the team approximates a reduction in external parts per million (PPM) of about 20%.
“Prior to Epicor, when we received a complaint about a product defect, it was very hard for our quality team to determine what exactly the problem was because there are so many variables that can affect the final product – everything from the batch of resin used to the temperature,” said Mansoor.
“With the rich reporting capabilities of Epicor ERP, our quality engineers can now analyse vast amounts of data on just about any parameter. This has allowed us not only to get to root cause and correct defects sooner, but more importantly, we have been able to put in several preventative measures that have significantly reduced material wastage and improved manufacturing processes and quality.”
The improved visibility and transparency has also given the financial department the ability to truly understand what is driving the numbers. As Memon explained, “Epicor ERP allows me to translate non-financial parameters into financial paramenters. With the integrated ERP system in place, I can dig into the manufacturing numbers to understand the manufacturing cycle, our wastages, etc. This gives me a true understanding of why our COS are what they are and I can then trigger a feedback loop and put measures in place that will positively affect our bottom line.”