Fibrelogic Pipe Systems

IT Objectives

• Produce accurate and timely management information to support growth.
• Eliminate month end reporting delays.
• Ease the production of budgets and give all relevant staff simple online access.
• Provide fast and responsive data on which to base purchasing decisions, thus avoiding the unnecessary use of working capital.
• Streamline production control and scheduling.
• Deliver advanced support to plant maintenance activities.
• Contribute to QA

History

With its exponential growth in both sales and staff, in early 2007 Fibrelogic recognised the need for a matching expansion in management systems and controls.

Since its inception, the company had been using MYOB and a range of detailed spreadsheets for almost all data recording and to transfer such things as inventory movement details into its financial records.

All systems were totally standalone. And at month end, transaction data was forwarded to an external accounting firm who produced key accounting and management reports. A process which, by that time, typically saw six weeks passing before month end financials were available to the owner.

The company recognised that the increase in such delays was impacting decision making. For example, without accurate and up to date data, it was not uncommon to err on the side of caution and over order materials to ensure production would not be compromised – a decision that resulted in the unnecessary use of working capital.

As Finance Manager Peter Clayfield explains, “production commitments and scheduling were maintained manually causing inaccuracies. Plant maintenance was also manually planned, as was the serial number control of most everything we produce. Further, we were not able to properly monitor manufacturing variances.

“The original accounting systems were not designed to handle the complexity that growth had introduced to our manufacturing. For instance, we had grown our operations so that they were running four 12 hour rotating shifts on four days, four nights basis – something that we had difficulty in accurately coping with.

“Most importantly, we were not getting the management information we needed, when we needed it, to adequately support the forecasted company expansion and to effectively set our forward budgets.”

Joining the company early in 2007, Mr Clayfield notes that one of the first tasks on his agenda was to improve the visibility and timeliness of management information. It was accepted that this would require solid internal systems reform. It was equally acknowledged that a suitable organisation-wide ERP computer solution would be vital and that this needed to be sourced from a supplier who would be apable of helping the company install and implement its new IT tools.

Considerable discussion was held with managers spanning all facets of company operations, to determine precisely what they needed. And, at the same time, a number of possible software solutions where examined. Following such work, a comprehensive specification was produced.

Partnering with Pronto Xi & MDS

In all, some five ERP packages were short listed for detailed review with Fibrelogic electing to install Pronto-Xi with implementation support by Adelaide headquartered MDS.

Specific Pronto Xi modules chosen included financials and payroll – to form the backbone of application – manufacturing, plant maintenance, project management, and inventory management.

Explaining his company’s decision, Mr Clayfield says, “The full integration and depth of functionality of Pronto Xi was seen to provide everything we wanted as well as catering for our future growth. We were also very conscious of the local advice and support that MDS was going to be able to offer and which was forcefully backed by strong local references.

“The total integration of Pronto Xi across all our business processes gives us the full visibility we need. It is also meets our insistence that whatever IT we introduced had to be as easy to use as possible. Some options we examined appeared to be far too complicated with far too many screens being needed to carry out specific tasks. We felt this would make the day to day use of the system unnecessarily complex.

After seven months of intense work, the system went live on April 1 2008 on completion of phase 1, which involved the greater part of the ERP system including financials, inventory, payroll, sales order and manufacturing.

It was a “demanding and challenging” time for the company, but strong planning and excellent training meant that all staff were well prepared for the introduction.

“Our aim was to implement the new system without any additional or specialist staff. And we achieved that by partnering with MDS. They provided consulting, training, technical support and project management. An arrangement that, in hindsight, we can say was a very good one that worked very well.”

With its phase 1 installation now complete, Fibrelogic’s next slated phase 2 systems roll out, began in May 2008. This addressed fixed assets and had the task of giving the company greatly enhanced control of plant and equipment and a far more precise allocation of depreciation to cost centres.

To follow, later in 2008, is a scheduled Phase 3 which will use further Pronto Xi capabilities to enhance plant maintenance, quality assurance, laboratory testing, and materials resource planning.

Among other things, such developments will see the better scheduling of preventative maintenance and the use of historical data to advise when particular components should be replaced. Equally importantly, the system will streamline the timely ordering of spare parts, many of which need to be sourced from overseas.

Outcomes

• Month end results are now available in less than five days as against six weeks.
• Faster budget preparation with all relevant staff being able to now directly access information.
• Better cost management and control.
• Streamlining of all internal processes from sales order, through works orders (now with BOM capabilities) to final despatch.
• Manufacturing variances (including scrap, material prices and labour productivity data) are now automatically generated and are available, online at any time.
• Automatic pipe serial number recording and tracking.
• Enhanced control over fixed assets.
• Better allocation of plant and equipment depreciation to cost centres.
• Contributions to HR, including the streamlining of the complex maulti-shift payroll.

Further Directions

While Fibrelogic’s three phases IT implementation has targeted all major commercial and operational areas of business activity, the company expects that further system initiatives will continue to be adopted on an ongoing basis.

Says Mr Clayfield, “to a large extent, what we will have implemented by the end of 2008, will be all of the major and essential tools we need. There is then still a lot of room to go back and introduce many ‘value added' capabilities. Effective IT helps everyone to do their job better. And so the task is really never complete – provided, of course, you have a system that can keep on evolving with you.”