An audio systems manufacturer grows exports by implementing new ERP software
After 50 years in business, a manufacturer of high-end audio systems decided to expand overseas in an effort to offset domestic competition for its amplifiers, tuners and speakers from Far East importers. However, an influx of new orders created serious production challenges. The first obstacle encountered was manually costing the finished products as they were built. Not having adequate purchasing and forecasting systems created inventory shortages affecting assembly line production. In order to avoid running out of inventory, the manufacturer overstocked parts resulting in excess inventory.
Facing these issues, the management team decided it was time to replace outdated software with new Enterprise Resource Planning (ERP) software. The change would help the company seamlessly integrate and retrieve information in real time from across all departments, find a product configuration system that could simultaneously cost items and price orders, and implement a purchasing and forecasting system that would enable the company to achieve “just in time” inventory levels.
After an extensive search, the company found ERP software that met its needs and utilized “data mining,” enabling the company to determine product movement, sales activity by countries, regions and customers, as well as evaluate the performance of its sales reps.
One year after going live with the new ERP system, the company’s VP of operations reflected on overcoming the challenges. “We took our time searching for the right ERP system,” he said. “We looked for a vendor who would not only provide us with excellent support but would also be our business partner for years to come. The new ERP System enabled us to achieve just in time inventory with 99 percent inventory accuracy. Our manufacturing plant was able to keep track of the multi-bill-of-material usage.
“Having accurate machine production and forecasting systems improved productivity and eliminated inventory shortages,” he continued. “With the new system we were able to open additional markets in Europe and make plans to sell our audio products in the Far and Middle East. Opening the new markets in Europe enabled us to increase our market share beyond everybody’s expectations.”
About the author:
Since 1980, Dani Kaplan has worked with manufacturers and distributors as the trusted advisor helping them lower their operating costs, streamline the operations and control their inventories. SMC Data Systems information can be found at smcdata.com.