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"SAP for
Industrial Machinery & Components (SAP for IM&C) is a comprehensive set
of solutions designed to integrate and streamline your enterprise, increase competitive advantage,
and reduce costs."
Source : SAP
SAP Customer Success Story: Industrial Machinery and Components
Industrial Machinery is also known as :
Industrial Machinery Applications,
Industrial Machinery Authorization,
Industrial Machinery Business,
Industrial Machinery Buyers,
Industrial Machinery Catalogs,
Industrial Machinery Company,
Industrial Machinery Components,
Industrial Machinery Credit,
Industrial Machinery Customers,
Industrial Machinery Dealers,
Industrial Machinery Diagnostics,
Industrial Machinery Directory,
Industrial Machinery Equipment,
Industrial Machinery Exchange,
Industrial Machinery Expertise,
Industrial Machinery Exporters,
Industrial Machine Fabrication,
Industrial Machinery Failure,
Industrial Machinery Group,
Industrial Machinery Importers,
Industrial Machinery Index,
Industrial Machinery Info,
Industrial Machinery Industry,
Industrial Machinery Installation,
Industrial Machinery Maintenance,
Industrial Machinery Manufacturers,
Industrial Machinery Manufacturing,
Industrial Machinery Market,
Industrial Machinery Mechanics,
Industrial Machinery News,
Industrial Machinery Needs,
Industrial Machinery Offers,
Industrial Machinery Products,
Industrial Machinery Process Engineering,
Industrial Machinery Repair,
Industrial Machinery Sales,
Industrial Machinery Service,
Industrial Machinery Shops,
Industrial Machinery Solutions,
Industrial Machinery Stock,
Industrial Machinery Supplier,
Industrial Machinery Topics,
Industrial Machinery Tools.
“The structure SAP [software] gave us really
helped kick our aftermarket parts and service
business into high gear.”
Jim Jacobson, Director of Information Technology and System Software,
Universal Instruments
Universal Instruments is one of the world’s leading electronics
productivity specialists, providing innovative circuit, semiconductor,
and back-end assembly technologies as well as equipment,
integrated system solutions, and process expertise to
manufacturers in every sector of the global electronics industry.
Universal Instruments is a global company with approximately
1,200 employees; manufacturing facilities in Shekou, China and
Binghamton, N.Y.; and offices in 21 countries. But it wasn’t
always that way.
“In the 1990s, things changed for us fairly rapidly,” says Jim
Jacobson, director of information technology and system
software at Universal. “In a matter of two quarters, our business
was in China. We became a global company.”
But there was a problem. The company didn’t have the processes
to sustain its new business model. Expansion and acquisition
resulted in an amalgamation of systems and processes that failed
to scale in a way that could accommodate the company’s
emphasis on business agility in a global market.
In the mid-1990s, Universal decided that something needed
to change. “That’s when we took a look at SAP,” says Jacobson.
“Basically, we decided to scrap our legacy environment all
together and go with a single-instance, global rollout of SAP
software using standard, out-of-the-box best practices to manage
our business.”
Consolidation and Scalability
In 1997, Universal Instruments completed its implementation,
installing SAP® software for enterprise resource planning (ERP),
financials and controlling, inventory management, human
resources, and other core aspects of the business. “This gave us
three things,” says Jacobson. “It gave us a single platform for the
entire organization, consistent processes for managing our core
business, and the ability to consolidate financially. Today, every
nickel that flows through the company goes through our SAP
software. This has helped us cut our monthly reporting time
by more than half. And we can do amazing things with the
numbers – analyzing information across regions, customers,
and product mixes. This just wasn’t possible before – at least not
with any degree of efficiency.”
The SAP implementation also gave the company the agility and
responsiveness it required to succeed in the fast-paced, rapidly
changing global market. “The scale happened,” as Jacobson puts
it. “Whenever it’s been necessary, we’ve been able to scale the
business using standard SAP functionality.”
Take, for example, the company’s new plan to establish facilities
in Brazil. “Things have heated up there and we need a presence,”
says Jacobson. “It’ll take about 30 days to be up and running, but
it’s no big deal for us now because our business processes are no
longer an impediment.”
Unexpected Benefits for the Aftermarket
Jacobson talks a lot about what he calls “SAP vanilla” – the basic
functionality of the software that is available immediately,
without configuration, right out of the box. “What I really
appreciate about ‘SAP vanilla,’” Jacobson says, “is the companystructure
piece. You set up relationships among entities within
the organization – all very explicit but flexible at the same
time – and that’s the core benefit. In fact, it’s an ongoing benefit
because it’s given us the flexibility to adapt quickly as our
organizational structure has changed.”
Universal’s ability to model and flexibly manage its organizational
structure within the software delivered some unexpected business
benefits as well. Jacobson explains, “We originally implemented
[the software] to get a handle on our core business – financials,
ERP, that sort of thing. The structure SAP [software] gave us really
helped kick our aftermarket parts and service business into high
gear. And that’s extremely important because that business is high
margin. It really became the poster child for the success of the SAP
implementation throughout the organization.”
Universal Instrument’s aftermarket business operates on a
direct-service model. This means the company itself maintains
direct control over operations, whereas competitors may
outsource the job to distributors. “It keeps us close to the
customer,” says Jacobson. “And it gives us a lot of credibility
during the sales phase because we can make promises about
service levels that our competitors can’t really make due to the
fact that they don’t have direct control over their aftermarket
operations.”
Before implementing SAP software, Universal’s aftermarket
business was profitable, but inventory carrying costs continually ateinto margins. “We had depots all over the world with parts
just piling up,” Jacobson explains. “But now, with our SAP
software, we have so much more visibility. If a customer needs
a part, we can get it to almost any place on the planet within
24 hours. And we can do this with lower overhead because now
we have the power to forecast demand.”
“Previously, it would have required
a major undertaking to adjust our plans.
But now, it’s just trivial – just press
a few buttons. Instead of the mechanics
of how you change a plan, our focus
is on what the market is doing and how
this impacts our business strategy.
What used to take about 80 work hours
a month now takes minutes.”
Jim Jacobson, Director of Information Technology
and System Software, Universal Instruments
In fact, Universal has been able to reduce cycle times by 30%
to 40% and significantly increase inventory turns. “This has
really given us a market leadership position in the aftermarket
business,” Jacobson says. “And, you know what? It also helps us
sell our machines in the first place. Customers need to know
that you’re going to be there when they need you, and, in very
unambiguous terms, we can demonstrate impeccable service
capabilities and a clear record of customer satisfaction.”
The Snowball Effect
The success of Universal’s aftermarket business generated
substantial buy-in for moving forward with other SAP software
projects at Universal. “Initially, we weren’t using the software for
materials and product life-cycle management, although the
software gave us the capabilities,” says Jacobson. “But successes in
other areas just generated a snowball effect. Now, we’re using it
to manage product configurations and the associated planning.”
In the past, materials planning for the complex machines
built and delivered by Universal demanded significant time
and resources. “A single machine has somewhere around
250 plannable items,” Jacobson explains. “So what we would do is
sit in a meeting, go through each item for about 30 machines,
and figure out the requirements for each plannable item –
all using an Excel spreadsheet. Today, we just use a variant
configurator in the SAP software. It takes no time at all.”
What does this mean to Universal’s core business? Jacobson
offers an example. “Recently, we had a slight dip in what we were
expected to build toward the second half of the year. Previously,
it would have required a major undertaking to adjust our plans.
But now, it’s just trivial – just press a few buttons. Instead of the
mechanics of how you change a plan, our focus is on what the
market is doing and how this impacts our business strategy.
What used to take about 80 work hours a month now takes
minutes.”
With increased speed and agility, Universal now finds it easier
to compete in a crowded marketplace that demands increased
responsiveness. “A few years ago, we had about 14 weeks’ lead
time for each order,” Jacobson explains. “That meant we were able to operate under a build-to-order model. Today, that cycle
has been cut to about two weeks, which means we have to build
ahead of the market.”
Universal now operates under an assemble-to-order business
model, building subsystems ahead of time and then piecing these subsystems together to meet customer requirements after
an order is placed. “This means that we’re required to take on
considerably more risk,” Jacobson says. “But with our SAP implementation
in place, we have the visibility and process
efficiency to succeed.”
“We had depots all over the world
with parts just piling up. But now,
with our SAP software, we have
so much more visibility. If a customer
needs a part, we can get it to almost
any place on the planet within
24 hours.”
Jim Jacobson, Director of Information Technology
and System Software, Universal Instruments
Moving Forward
Is there anything else in store for Universal and SAP? “Actually,
we just turned on mySAP™ Product Lifecycle Management,”
Jacobson responds. “Already this is making design change a lot
more efficient.”
In addition, the company is planning to implement customer
relationship management functionality to drive even greater
efficiencies in its aftermarket business. Internet sales and
employee self-service – both enabled by the SAP NetWeaver™
Portal component of the SAP NetWeaver platform – are also
on the table.
“There’s still work to be done,” Jacobson says. “But SAP has
proven its value. It looks like we’ll be working together for a long
time.”
AT A GLANCE
Summary
Universal Instruments
Corporation, a leading capital
equipment manufacturer,
streamlined global processes
and dramatically improved its
aftermarket business with help
from SAP® software.
Web Site
www.uic.com
Key Challenges
- Enabling business flexibility to
meet challenges of globalization
- Driving down process costs
- Driving down process costs
Project Objectives
- Consolidate systems
- Make global processes
consistent across all
geographical locations
- Ensure scalability
Solution and Services
SAP for Industrial Machinery &
Components set of solutions
Why SAP Solution
- Integrated offering; no point solutions required
- Functional completeness
- Industry expertise and reputation
Implementation Highlights
- 1,200 users
- On time and within budget
- Fixed-price contract
Key Benefits
- Reduced parts-delivery cycle
times from weeks to less than
24 hours
- Streamlined material planning
processes, reducing total work
hours by 95%
- Reduced monthly reporting time
by more than 50%
- Ensured leadership position for
aftermarket business
Existing Environment
MAPICS and Lawson
Database
IBM Informix
Hardware
IBM
Operating System
IBM AIX