E-Business -- Eliminating The Missing Tub

Often it appears that technology, with all its associated costs and organizational difficulties, has a questionable payoff. In recent years, manufacturers have spent untold billions of dollars on enterprise-resource-planning (ERP) systems, only to get mixed results. Others have installed expensive warehouse-management systems only to have them "blow up" in their faces, causing huge snafus in filling product orders. Still others have purchased expensive supply-chain-management software only to find its integration with the rest of the company and with the systems of suppliers a daunting task. So much for technology's bad and ugly. But many manufacturers have embraced new technologies and experienced the good side: a real business payoff. One such company is Berkline Corp. Not long ago this manufacturer of upholstered reclining chairs and loveseats faced up to a painful business problem: The company literally didn't know where each customer's order was. Moreover, information about work in process was so imprecise that the company typically lost one "tub" of materials being shipped interplant each day. "Right from the raw-materials stage, we're concerned about where that material is that's going to end up in a finished product," says David Hood, vice president of operations services at the Morristown, Tenn., division of Lifestyle Furnishings International Ltd. The $300 million company churns out 5,000 pieces of furniture daily with three assembly plants supported by four other plants and two distribution centers. Berkline already had a warehouse system as well as a shop-floor tracking system. "We wanted RF technology in our warehouses to improve our tracking and we wanted online, real-time updating of our ERP system," Hood explains. And Berkline wanted a configurable system that could be tailored exactly to its specific needs and that users could adapt to easily. The manufacturer chose a system called Synapse from Integrated Business Systems and Services Inc. (IBSS) in Columbia, S.C. Used for data collection and tracking as well as for warehouse management, it sits between the shop-floor control system and ERP. On the plant floor the company installed Intermec RF scanning devices for data collection. The Synapse system tracks work orders and products, but capacity planning and scheduling is still done by the company's old MacPac ERP system. Berkline's make-to-order business and relatively short manufacturing cycle necessitates that management keep close tabs on every component for each product order. The company starts out with rolls of fabric, sheets of plywood, and steel coils, and transforms these materials into recliners to be shipped to furniture retailers. There are 600 product styles, with some 1.5 million different permutations of product when color variations are thrown in. "Knowing where all the components and subassemblies are is very critical to us," adds Hood. "If the system is down, we literally cannot operate." The company went live with the new software on Jan. 2. Reports Hood, "We now have much better control of our interplant activity. With plants in four states, we were losing one tub of material each day, and we've lost none since." Berkline moves 9,000 tubs of cut fabric between plants daily. Typically, three tubs hold the parts for a group of sofas. But the loss of even one tub represents at least part of a customer order that can't be located. One of the lessons here is that Berkline was smart to not overreach with its technology goals. It wasn't looking to make any breakthroughs. Nor was it expecting to use the software to enable it to meet a huge surge in business. And Berkline wasn't overdependent on the new software working perfectly right out of the box. Even though the software was mission critical, the company did plenty of simulation and testing to make sure everything worked. "A big plus of the new system is that we have current, real-time information," concludes Hood. "It used to take our customer service people two days to learn if a product had been loaded and shipped. Today they know instantly." Training-wise, Berkline already had used some IBSS software, so the learning curve wasn't too steep. "We have new screens and menus, but the process is the same," Hood reports. So, not only did tubs not get lost, people didn't get lost either.