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Connaught
Electronics Ltd
1 . Overview
Connaught Electronics Ltd (CEL) is dedicated to the design and
manufacture of electronic systems for the automotive industry.
Initially selling alarm (security) systems exclusively in Ireland,
CEL subsequently became a leading player in the vehicle aftermarket,
dominating the domestic market. In 1991 the company changed
strategy with products being supplied directly to car manufactures,
by 2000, 98% of sales were to the OEM (Original Equipment Manufacturer)
automotive electronics sector.
CEL's
products are targeted at the luxury sector of the market. The
supplier network in the automotive industry operates on two
distinct levels:
- Tier
1 operators supply products directly to vehicle
OEM's
-
Tier 2 operations sell to an integrator who then sell on
to the vehicle OEM's
CEL,
being a relatively small company in their new marketplace, operate
mainly in a tier 2 capacity but are striving to become a Tier
1 supplier. To achieve it's targets, CEL has highlighted a need
to create efficiencies and cost reductions in their business
and operational processes. System automation and streamlining
will be supported by the strategic development of an eBusiness
model to support day-to-day operations and business processes.
CEL had been operating a traditional MRP system (see
Glossary of terms)
with a low to modest use of its functionality. Their
problems can be summarised as:
- Over
stretched human resources that had to manage raw material
scheduling, procurement, tracking, delivery and payment.
- The
potential increase in human resource required in administering
the company's operations, if it was to meet its ambitious
sales targets.
-
The lack of traceability during the manufacturing process.
- The
inability to accurately forecast demand and maintain corresponding
stock levels.
- No
consistent method of receiving and processing orders.
CEL
decided to tackle their problems with the following plan:
- conduct
a feasibility study looking at the best solutions for:
-
automation of forecasting, sales, order entry and purchase
order placement with a fully fledged ERP (Enterprise
Resource Planning - see sidebar) system
-
automation and integration of supplier delivery programme
into production
-
online delivery, ordering, scheduling, invoicing and
payments
A
team of internal experts in each area of the company's business
and consultants set about planning the implementation. In areas
where their own expertise was scant, CEL wanted an independent
perspective where critical decisions had to be made.
CEL
set about looking at a variety of ERP systems until two contenders
remained. As there was little between the two vendors the company
visited several reference sites to assist in their decision-making.
CEL were surprised at these findings. Each of the very expensive
ERP systems, were only, in reality, providing functionality
for invoicing and goods receiving. CEL needed a major rethink
of their strategy. It was felt that investment in either of
these, top of the range, ERP systems, would be a poor spend
for the company. Instead of bringing in a new supplier, CEL
upgraded their existing systems choosing a 'one stop shop' for
their web based ERP server and bar coding system.
Their
planned implementation consisted of:
- a
web server providing a front end to customers and suppliers
- an
ERP system
- an
in-house bar coding system to record the delivery and monitor
products in the manufacturing plant
- a
traceablity system to track and record the process of all
products and components through the manufacturing cycle
To
support this extensive architecture, CEL had to update their
entire existing network. They had to designate a dedicated IT
area within their facility to house the new servers.
Although
the full scope of the project has yet to be fully implemented,
the planning stages for each step are now fully detailed. The
traceability project has helped CEL to secure a significant
new contract. Every step of the production process can now be
monitored, logged and retraced by both the customer and CEL.
This degree of control over the production life cycle increases
customer confidence in CEL's ability to deliver products and
will help secure more contracts.
Once
the bar coding system is fully activated, the number of man
hours required to manually progress raw materials and products
through production, will be greatly reduced. The implementation
of the EPR system will allow further efficiencies in communications
between suppliers and customers. The automation of many processes
will reduce errors and allow CEL to be more responsive to customer
demands.
CEL
have never shied away from investing in their future. Their
expenditure in R&D is an example of their commitment to
growth and innovation. The ebusiness strategy will allow the
company to continue its rapid growth and development into new
markets.
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