Gearhart United

IT Objectives

• Produce a single ‘across-the-business’ system to better support growth.
• Readily provide management with accurate and timely information on all key operational areas and make these operations far more transparent.
• Continually monitor manufacturing, in particular production costs.
• Streamline the assessment of long term inventory needs against manufacturing requirements.
• Facilitate the traceability of all manufactured products to meet American Petroleum Industry (API) accreditation standards.
• Meet all required general ledger requirements.

History

Very much as a result of its exponential growth, Gearhart United had determined that a substantial re-think of its use of information technology was warranted.

Over time, a plethora of quite disparate stand alone systems had been adopted. And while these had proved useful, it was felt they were now standing in the way of effective management reporting rather than contributing to it.

Above all, it was believed that there was a considerable amount of important data that not sufficiently transparent and readily available. Often, required data needed to bring together inputs from several systems. And there were instances where critical data from one application was not automatically passed to another. This required arduous, error prone and time consuming manual calculation.

In making this assessment, Gearhart also recognised the challenges brought about by the diversity of its business.

As General Manager Albin Richtsteiger notes, “Because we are involved with manufacturing, product sales, equipment rental and repair, we are doing far more operationally than many businesses who are much bigger. We have to do everything exceptionally well, but always in the context of a company that is relatively small in global terms.

“All of which demanded that we aggressively harnessed computer solutions to achieve what was needed in a very cost effective manner. Above all, with IT applications that would automatically talk to each other right across the company.”

Further adding to Gearhart’s challenges is the volatility of lead times that are experienced between orders and deliveries. As well as the need to source production raw materials for sales that that may be signed for delivery several years in the future.

“We will often face a situation where a customer needs a product and wants it immediately. That means we have to maintain adequate stock holdings. And the costs of doing that have to be built into prices”, Mr Richtsteiger explains.

“Conversely, some customer will place an order, today, for a drilling product that is not required to be delivered for some 12 months or so. Here, we have to quote a set price without the comparable ability to fix the cost of our manufacturing inputs. In fact, some of the contacts we are now writing are for deliveries that will take place in three years time.

“A situation in which it’s imperative to have meaningful, timely and accurate manufacturing cost, inventory and sales data readily to hand and which are all automatically cross referenced.”

Partnering with Pronto Xi & MDS

Now a long term partner of MDS and Pronto Xi, Gearhart has, over time, implemented modules within the Pronto Xi ERP solution including Financials, Distribution and Shopfloor Production. Implementation still continues today through an ongoing review process and as reflected in the recent deployment of new time and costing methodologies.

Outcomes

• Management has access to all key data it needs for effective decision making, with information being immediately available when it is needed and in the form it is needed. The performance of all operations is totally transparent.
• All activities, such as sales, manufacturing, inventory and invoicing are fully linked, enabling the business to better plan its finished product inventory and purchase of manufacturing inputs.
• All products can be fully traced by serial number in conformance with API accreditation standards.
• The serial number can then be used to determine when an item was manufactured, what raw
• materials were used, where these were sourced from and the relevant inspection certificates that were issued.
• Detailed manufacturing costs are now available. These facilitate the monitoring of cost changes, the assessment of long term cost rise trends and the review of what action, if any, can be taken to address these. The information also contributes to the precision in setting long term customer prices.