Case study: Senior Flexonics Czech Implements QAD ERP to Achieve MMOG/LE ‘A’ Certification

Senior Flexonics Czech Implements QAD ERP to Achieve MMOG/LE 'A' Certification

SFC was founded on March 23, 2001, under the name Senior Automotive Czech, s. r. o. Manufacturing started in July 2001. SFC is part of Senior plc, a multinational group with operations in 11 countries worldwide (U.S., Canada, Mexico, Brazil, Republic of South Africa, India, the Netherlands, France, Germany, the Czech Republic and the UK) and 4,800 employees.

SFC's activities focus on the design, manufacture, and sale of steel and aluminium pipes for the automotive industry. SFC had 146 employees and a total turnover of CZK 300 million in 2012.

The main reason SFC implemented the new QAD ERP system was that it needed to improve its supplier rating. The goal was to achieve the highest possible rating, an A (according to Global Materials Management Operations Guideline/Logistics Evaluation, or MMOG/LE), from SFC's most important customers, Renault and Ford.

Moreover, SFC aimed to reduce its inventory, decrease the time needed for monthly physical inventory checks, and reduce unproductive time owing to more efficient production planning. SFC also aimed to reduce costs connected with the rental of returnable packaging.

SFC's customers conduct a supplier evaluation on a yearly basis, and SFC has consistently achieved its goal of an A rating, according to MMOG/LE, since the QAD implementation (delivered by QAD partner, Minerva Czech) in 2010.

The new system also reduced inventory levels at SFC. The company had required a three-day decrease in average inventory turnover, which was accomplished and even exceeded (the actual decrease was 8.3 days).

SFC also aimed to reduce the time required for monthly physical inventory checks by at least 15%. The new QAD ERP system proved extremely supportive here, as this goal was far exceeded, with an actual reduction of almost 30%. Another area in which SFC required improvement was the reduction of unproductive time and the reduction of overtime and unscheduled work shifts by at least 15%. This was to be accomplished by optimizing the production plan. Again, the new system met this criterion and slightly exceeded it, with an actual improvement of 15.5%.

Lastly, SFC aimed to reduce costs related to the rental of returnable packaging by 15%. The new QAD ERP system reduced costs by 15.7%. The evaluation of the aforementioned metrics was performed after 6 months of standard operation of the system after Go Live. Above all, SFC's customers value the comprehensive accuracy of deliveries, adherence to agreed shipping dates, the provision of flawless shipping documentation, and the confirmation of orders via EDI, all of which were improved by the new ERP solution.

Conclusion

SFC's primary benefit from the QAD ERP implementation is that it has reached its goal of a repeated A rating during the annual evaluation from its core customers, which has strengthened the company's market position as a stable and reliable supplier in the automotive industry. SFC has also optimized its own internal processes substantially, specifically those related to production and logistics. It was able to reduce inventory, decrease the time needed for monthly physical inventory checks, reduce unproductive time, and reduce the cost of the rental of returnable packaging.

SFC stated that Minerva had made a very positive impression in the communication of its consultants; the benefits derived from its ERP system were thoroughly examined in the vendor selection process and were thus expected.

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