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Shabra
Plastics & Packaging
1 . Overview
Based in Carrickmacross, Co. Monaghan, Shabra Plastics
(www.shabra.com)
was founded in 1986 when Oliver Brady, a close family
friend of the Shah family, returned to Ireland from
Kenya. With little idea of what he would do on his return,
he was persuaded by the family to open a plastics manufacturing
facility using the knowledge he had gathered while working
at other Shah manufacturing plants in the Far East.
Shortly after Oliver founded the company, he was joined
by Rita Shah, and thus the Shabra name was born –
ShahBrady.
When wondering how to break into the Irish market for
plastic bags, the two went to a landfill site, collected
discarded bags and brought them home. From these samples,
Shah was able to gauge the specification of bag that
was required for the Irish market.
Premises in Carrickmacross were purchased in 1989 and
Shabra bought its first printing machine to overprint
the imported boutique bags itself. Shortly after, the
company started to manufacture its own plastic bags
(starting with black bags), using recycled material
from the UK. From there, realising there was a demand
for recycling in Ireland, Shabra set up its own plastics
recycling plant. Not only did this allow Shabra to provide
a value added service to its customers (any customer
spending over €10,000 pa with Shabra was eligible
for free waste collection) but it also provided them
with a ready source of raw material for the recycling
plant.
Like many other companies that took advantage of the
Enterprise Ireland eBusiness Acceleration Fund, Shabra’s
eBusiness project was heavily market driven. “Had
we not have been pushed into it, we probably would never
have gone down this route”, commented Shah. In
Shabra’s case, the eBusiness Strategy was driven
by one of itsmlargest customers, Musgraves, which insisted
all its major suppliers (of which Shabra was in the
top three) implement EDI.
Although driven by Musgraves initially, the implementation
of EDI meant that there was potential for Shabra to
more easily increase the volume of business they did
with other large customers. At the time many of Shabra’s
other large clients were taking advantage of centralised
ordering and billing. Those companies were not submitting
orders via EDI (though the potential was there) but
were still submitting orders electronically via email.
The main driver behind Shabra implementing an eBusiness
system was, of course, to retain Musgraves, one of its
key clients. Additionally, the implementation of new
systems would make the company more efficient and make
it easier to conform to the requirements placed on the
company by both the ISO standards board and Repak, the
government department with responsibility for waste
management and recycling.
The EDI link to Musgraves allowed the company to:
- Receive
invoices directly into its accounting system
- Gain
direct access to a Shabra pricing catalogue that
allowed Musgraves to check the price of any given
item
Additionally,
the new systems allows many of Shabra’s other customers to order online
via the Shabra website. Around 50% of Shabra’s 3000 other customers
are now placing their orders via the online web-ordering system, the second
part of Shabra’s eBusiness project. The website was built for a number
of reasons:
- To allow
customers with web access to order products online
- To allow
customers to send in queries on Shabra products
and services
- As an
info-site for customers wishing to get further information
on Shabra’s products and it’s recycling
services
The online web
ordering system allowed customers to quickly and easily place orders and
send them directly to Shabra. Upon receipt, the order was logged (and with
no re-keying required, was less prone to errors), shipping booked and the
customer emailed, almost immediately, with delivery day and time. Shabra
was awarded a grant of €33,775 of which 93% was drawn down over the
duration of the project. The rollout of both the EDI system and the web
based ordering systems had a number of benefits for Shabra’s customers:
- Increased
efficiency – Web ordering now means that customers
can quickly and easily place orders via the Shabra
website.
- Direct
invoicing – For Musgraves, linking in via EDI
allows them to directly receive invoices from Shabra
and therefore increase their own efficiency.
- Less
errors – With online ordering, it is far less
likely that an incorrect order is shipped to a customer.
- Last
minute order changes – Once an order is received
and confirmed, a delivery date is supplied. If the
customer realises they need another item prior to
that delivery date, they can simply call and have
it added to the order.
Shabra and the
team that developed the system have seen a number of benefits in the 12
months the system has been operational:
- Increased
margins - Profit margins increased 4.5% in 2002.
- Higher
than expected revenues - Revenues stayed at their
2001 level and didn’t drop, as anticipated,
as a result of the environmental bag tax.
- Increased
efficiency – The new system removes a lot of
manual data re-entry and staff that used to perform
simple data entry can now be refocused to add value
elsewhere in the organisation.
- Better
utilisation of staff - Sales people are now driving
new business acquisition as they have to visit current
customers on a less frequent basis.
- Better
coordination of orders – A double order doesn’t
have to be generated if a customer wants to add
an item to an existing order.
- Better
quality information – At point of order entry,
the system allows staff to tell customers what is
in stock and what isn’t in addition to the
value of their order.
- Standards
- The new system makes it easier for Shabra to document
the required processes to adhere to standards laid
out by ISO 9002 (2000).
Rita Shah and
the team in Shabra learnt a number of lessons during
the rollout of their eBusiness system:
- Putting
an eBusiness system in place is a must
- Organisations
must shop around for a vendor
- Senior
management should be involved in the project
- Research
should be undertaken before any decisions are made
- Any software
rolled out should be easy to use
- The system
should be future-proof
Like many of
the companies that took part in the eBusiness Acceleration
Fund project, Shabra’s system development is ongoing.
Specifically in the future, the company wants to roll
out an online system to its wider customer base, thus
giving them some of the functionality organisations
like Musgraves are getting with EDI.
This is likely to happen once the company has moved
to new premises in Castleblaney and can accommodate
a dedicated eBusiness team.
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