Wandsworth Group

Better use of working capital following implementation of new generation ERP system.

The Wandsworth Group is the UK’s oldest manufacturer of electrical switches and accessories. Products are specified by architects, consulting engineers and contractors, and can be found in Windsor Castle as well as prestigious hotels, airport terminals and large commercial buildings, in the UK and the Middle East.

Diversification has included the development of a range of hospital patient call systems and more recently, an internet based bedside multi-media communications system for the global hospital market. Today, healthcare products account for a significant part of the business and they are being marketed successfully into Canada, Australia and New Zealand.

Currently employing 160 personnel and with annual sales of around £16 million, the Wandsworth Group has maintained its independence by holding its share of the high end of the market. Key to this has been its focus on customer requirements. Customisation however has led to a high level of product variants.

Need for greater flexibility – making to order

"The emphasis is now on our manufacturing procedures and stock turnover to ensure we obtain maximum profitability for the capital employed," explains administration manager, Gerry Thornton.

"Flexibility on the shop floor is the new watchword and attitudes have had to change totally from pre-set machine runs, manufacturing to stock; to a new lean approach - only making what can be sold."

Business operations at the group’s Woking premises have been restructured to complement the implementation of a new generation business management computer system. IFS Applications has replaced an ageing proprietary system which had become increasingly uneconomic to maintain.

The previous system had been in service for over twenty years and Wandsworth were careful to ensure that its replacement would retain all the specialised functionality it provided, as well as meeting future needs of the group.

The challenge – balancing throughput and capacity

Production planning is an important function and managers have to make a judgement on sub-contracting work based on costs or capacity. Specialised suppliers are used for electronics work and other complex components such as grids and bulky assemblies.

The big challenge is in balancing order fulfilment and availability without creating excessive levels of stock. Wandsworth’s portfolio covers around two thousand generic products plus an infinite number of variations. Specials are made to order. A lot of stock is also part finished and then completed against customer orders.

Customer ordering is complicated by the fact that components are often installed at different stages as the building work progresses. Products are supplied both direct to installer, or through stockists and demand can fluctuate from high volume to small quantities for refurbishment projects. In order to encourage smooth ordering, Wandsworth provides a range of pricing options and discounts.

The solution – making the change to MRP

Although the IFS software met most of the project requirements, some modifications were undertaken in order to meet the needs for quotations, which are geared to the special characteristics of the building services market. For instance quotations for large projects are often split into different phases, each of which may have subordinate stages.

The management of shop orders was another area in which the generic IFS software worked in a different way to the legacy. Previously Wandsworth used Re-order Point Control in conjunction with sales forecasts based on historic demand patterns, rather than a traditional materials requirement planning (MRP) approach.

"Our immediate reaction was to start creating interfaces so that IFS would perform in the same way as the legacy," says John Williams, associate director support services. "Eventually we realised that the IFS MRP function would provide a neater solution and decided to make the change. And this has proved to be very successful."

Gerry Thornton agrees. "At first there was some reluctance to change but now we have moved across to MRP we can already see some reduction in our inventory."

"It has opened our eyes to the next problem with manufacturing and that is capacity. Now that we have got the materials under control, the next thing is to ensure that we have the correct resources available to meet our delivery commitments."

Concurrent to the IFS implementation, Wandsworth has undertaken a major project with a view to implementing lean manufacturing techniques. Detailed studies have been carried out into the movement of materials through the manufacturing process, economic batch sizes, bottlenecks and available capacity. The aim is to eliminate waste in various forms from excessive stocking to idle capacity, blocked because of batch runs and scheduling issues.

This work preceded the switch over to an MRP based shop ordering system. The aim ultimately will be to carry this forward with the implementation of IFS constraints-based scheduling. This will enable the company to balance throughput and therefore achieve more accurate lead-time forecasts and improve its performance for on-time order deliveries.

Benefits

The biggest advantage achieved through the IFS implementation was the improvement in getting information out of the computer system. Benefits are felt throughout the organisation as users can now interrogate the system as and whenever necessary, rather than await the publication of reports.

Wandsworth has worked with IFS to adapt sales order processing and quotation documentation so that individual lines can be discounted. Typically a sales order may have up to thirty line orders. This modification accommodates the need to allow different discounts according to different customers and product types.

"One of our biggest worries was in our ability to manage the transfer of data," says John Williams. "IFS however provided some very useful tools to support this activity, and given the tools and an explanation on how they worked we were able to do most of the work ourselves. The project was relatively painless. IFS consultants kept an eye on things and were readily available to provide support on site during the implementation."

Historically about 20 per cent of the company’s business has been from specials or non- standard products, ranging from simple variants to totally bespoke design. The IFS software is helping to improve visibility in costing and helping management to achieve a better understanding of the profitability of individual contracts.

Another area the company is looking at is in capturing information and criteria used for preparing price quotations to ensure consistency in pricing smaller re-order quantities.

Future development

Work is continuing to deploy additional modules. These include configure-to-order, which the Wandsworth sales team see as a potential solution for managing product data and in particular, keeping track on all the variations. Looking ahead, the marketing department want to explore ways in which the system can be used to involve customers more in the automated processing of orders.

Whilst the integration of disparate systems may still be a distant objective, the implementation of IFS has marked an important step forward for the company. John Williams and the Wandsworth team can now see many opportunities open now that couldn’t have been contemplated with the previous system.

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