Computing ERP Benefits
Comark Corp. is a computer manufacturer for companies such as General Motors, Goodyear, and many others since 1974. In this business, Comark must deal with a product mix that changes by the week, sometimes even by the day. It must also deal with a parts inventory where component values can drop by 50% in an hour. For example, the Intel Pentiums might be plentiful one week, and scarce the next. Or, the memory that goes inside the computer might cost $180 one day, and $380 the next. Additionally, Comark guarantees that every product it builds - or a fully compatible replacement - will be available for a minimum of 10 years. Needless to say, Comark found it very difficult to accurately track all of this ever-changing information.
In the past, Comark used a combination of several different systems to handle manufacturing and financial accounting. The result was good financial reporting and job costing, but no high-end, integrated manufacturing resource planning (MRP). Another problem was inflexibility. The lack of querying capabilities made it difficult to identify records that needed to be investigated or changed. When it was time to purchase an integrated system, Comark looked at several PC-based systems that had good financials, but lacked high-end integrated MRP. Then, they discovered Expandable Software (Santa Clara, CA). The solution provided integrated MRP in a PC framework that could be implemented in a few weeks. Its report writing capabilities allowed novices to create custom reports. Its querying capability made it possible to locate records based on virtually any criteria. Managers liked the low cost of the package - about $25,000 for a relatively small implementation.
A Switch Regretted
The system was installed and ran successfully for the next several years. Then, an increase in business caused management to move to a more expensive package. They installed a system that had more capabilities at a considerably higher cost. According to Susan Murphy, manufacturing manager at Comark, the result was a disaster. "The system forced us to change our operating methods in several important areas, all for the worse."
Not long after the new system was installed, management decided to pull the plug and go back to Expandable. Expandable offered backflushing capabilities. "The key is that we use a few bills of materials, each of which actually encompasses many different part numbers," Murphy said.
Users Write Reports
With the Expandable system now firmly entrenched, Comark uses the software to further increase reporting capabilities. A custom report was created by business users to replace the voluminous MRP report. This report was modified, so only assemblies, not individual components, would appear as line items. Demand is summarized on a weekly basis, rather than day by day. Each department has a concise, one- or two-page report.
The integration between MRP, inventory, order entry, purchasing, and financials has been another major factor in the success of this implementation. "With component prices continually dropping, the value of our inventory is dropping by the same amount," Murphy said. "Expandable provides powerful tools for keeping inventory as low as possible without incurring stock-outs that reduce our sales."