September 11, 2009 by André Voshart
THE COMPANY: Flexahopper Plastics Ltd. is a plastic products manufacturer based in Lethbridge, Alta., that uses a rotational molding process serving agricultural, industrial, fishing and ecological industries.
THE CHALLENGE: Flexahopper has a complex product mix with more than 600 items and several dozen distributors that makes for a difficult management task in materials planning, BOM maintenance and production scheduling. Many of the products produced are often changed based on custom ordering. Under their old system, having a non-standard or custom BOM based on a sales order was next to impossible to maintain as it would require creating a new BOM for every custom order. This led to outdated and inaccurate costing of BOMs and production.
As well, material planning was a guessing game based on constant physical counts and checks of raw materials. The system in use had no practical or accurate material requirements planning system. Production scheduling was also a problem, as their old system had no facility for estimating production times of product runs.
THE STRATEGY: Flexahopper needed to find a manufacturing control system that would accurately cost their BOMs, make BOM management and customization easier, and provide them with both material requirement forecasting and master production scheduling. They needed to find a software system that would integrate with the existing accounting system rather than purchase an entire new ERP system. MISys Manufacturing for Sage Accpac ERP (MISys SAE) fit the bill as it allowed for easy cost “roll-ups” throughout BOMs when items are replaced or have price changes; allowed customization through the use of “manufacturing orders” that can customize a BOM without changing the standard BOM; did an excellent job of materials and purchasing planning based on unlimited customizable criteria; and accurately forecasted production run times based on the BOM routing details.
THE RESULTS: The cost savings and return on investment were enough to justify the purchase, the company says. They now always have proper stock levels and have reduced freight costs by an estimated 15 percent by eliminating “emergency orders.” It has also allowed them to negotiate better terms with their suppliers. They now have accurately costed finished goods, allowing them to determine the best product pricing for customers and themselves. They can also customize a production run and still know exactly what it costs based on standard, projected and actual costs – and can now give a customer accurate delivery dates.
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