Plasmor

IFS Applications business management software is helping Plasmor to set new standards for customer service.

The challenge

Success in the production and distribution of concrete products depends on some fundamental criteria. Building blocks and paving are heavy commodities which are expensive to transport and need careful planning for delivery. Order requirements and delivery times can change at short notice. Flexibility and immediate response are therefore crucial.

Plasmor’s target is to fulfil any customer order within a three day lead time. To do this efficiently, the company must manufacture to stock. Whilst this gives the company a competitive edge, such a strategy needs careful management to ensure that it can be maintained without carrying excessive levels of inventory.

Solution

The solution according to Financial Director, Keith Knaggs is in the use of IT. "We were an early convert to the idea of using computers to provide competitive advantage, particularly in delivery performance."

As an expanding company, Plasmor now has eight production plants all located within strategic marketing regions. The latest addition is a £5 million production plant in Boughton, Nottinghamshire. Designed for the production of concrete block paving, this new plant complements existing facilities in Knottingley and Heck, Yorkshire. Additional factories are located in Newton Aycliffe, County Durham and Widnes, Cheshire, each providing regional support for the group’s northern and western divisions respectively.

So far IT had been used within Plasmor to support sales order processing and distribution. To improve this capability further and provide greater flexibility, the company has implemented IFS Applications, a new generation Enterprise Resource Planning (ERP) management information system. The system went live in December 2003 and successfully completed its first financial year-end in August 2004.

An important benefit of the new system is that the sales department can allocate stock from any of the production units to meet order commitments. As well as improving customer service, this also ensures that the company achieves the most efficient use of its production facilities.

Computer upgrade

The IFS ERP system has replaced a bespoke order processing system which was used in conjunction with a separate financials package and various Excel spreadsheet facilities. This combination has supported the business successfully for over ten years with annual sales turnover increasing to more than £45 million.

"As the needs of the business were becoming more complex, these facilities were coming under increasing pressure. Since the computer hardware was nearing the end of its life, it was decided in 2002 to take this opportunity to upgrade to a unified ERP system. Now operational across the group, the new software runs on a central server and a networked PC/thin client environment, using robust and low maintenance equipment," explains Plasmor’s project leader, Deborah Smith.

ERP provides much wider business support by integrating all of the traditional management functions, such as financials, payroll and human resources with other functions such as sales order processing and manufacturing. For Plasmor the upgrade has made an immediate impact as previously all production planning, recording and control was based entirely on manual records.

Sales orders and distribution for Boughton, and the two Yorkshire production units are managed from headquarters in Knottingley. Both of the Yorkshire production sites have rail links to depots in the south of England. About half of the manufacturing output from the Heck plant is shipped out by rail on a daily basis.

Says Deborah Smith: "In order to manage the additional capacity we needed facilities to help us marshal deliveries and plan the most appropriate supply point for a particular order, a degree of flexibility which the previous system lacked."

Integration between sales order, production and distribution

From an ERP point of view the manufacturing process is relatively simple. Since it is a continuous process, materials requirements are geared to stock orders rather than make-to-order. The important element was the integration with sales order processing in order to exploit fully the company’s multi-site capacity.

One of the most challenging aspects of the Plasmor requirements was the haulage function. IFS put forward proposals for meeting this requirement by modifying its existing sales distribution module.

The haulage requirement covered all the logistics of taking an order, scheduling a load, the truck delivery, the paperwork, the forward order book as it stands, and how to manage orders that are in the system, at different levels of reservation. "Effectively this provided a bespoke solution without compromising the integrity of the overall system," says Deborah Smith. "Integration is crucial to ensure an immediate interface at every stage of the process."

Looking ahead the system has also provided the infrastructure to support future supplier chain partnership through electronic data interchange (EDI). It also offers the potential to develop a new channel to market via e-commerce, which will further enhance Plasmor’s competitive edge.

Benefits

Immediate improvements have been in the visibility of the production plan allowing the company’s sales team to take full advantage of the additional capacity from the new site at Boughton. "We can now rely on stock levels and availability to promise deliveries, which has improved customer service," says Deborah Smith.

The integration has also helped Plasmor to make more use of the data within the system. For example data required for planning and manufacturing such as process routings, product structures and lead times, are available to the accounts function for costing and accounting purposes. Another important benefit is the improvement in physical recording of inventory and stock control.

"We have full traceability of stock from procurement and manufacturing through to stock transfers to our Southern depots, as well as stock reservations against customer orders, through to delivery."

Deborah Smith concludes: "This investment has provided the key to maximising both customer service and operating efficiency. With better stock visibility, we can balance production output and stock to their optimum levels."

For additional information, contact:

Christine Murphy, Marketing Manager
Telephone: +44 (0)1494 428900
Fax: +44 (0)1494 428907
E-mail: christine.murphy@ifs.co.uk