Delivering a Transformation in Manufacturing Budgeting, Efficiency, and Cost Savings
When we take our car to a garage for repair, the all-too-common response is it will take at least a week to wait for the right part. This challenge weighed heavily on managers' minds at PT Sinar Agung Selalu Sukses (SASS), an Indonesian auto parts manufacturer that produces spare parts for two- and four-wheeled vehicles. The company, part of the SAS Group, manufactures products for the OEM and aftermarket industries and handles custom production orders sold through retail and distribution centers via other businesses in the SAS Group. SASS parts, such as wheel cylinders, braking systems for rear wheels, and vehicle lifting jacks, are used across Indonesia and the local Asia region by consumers, garages, and customers like Daihatsu and Mitsubishi.
The business was hindered by inefficient and ineffective manufacturing systems, which comprised different and disconnected applications and spreadsheets, creating a silo effect between departments. Planning was difficult and complex because functions like calculating production costs were costing too much and taking too long, up to four weeks after the end of the month. In addition, SASS could not accurately calculate what raw materials it needed, so often, it over-ordered to prevent production disruption. With around 60% of manufacturing in the ‘make to order’ category, this slowed production and impacted cash flow. It took too long to provide customers with a price for their job. Engineering would calculate a bill of materials on a spreadsheet and tell the sales team after the fact. If there was a change, the sales team was not always updated, often leading to errors.
Lack of visibility also meant the business could not see which parts of the production process were performing well and which were not. In addition, paper documents related to orders were difficult to track and find, which caused problems when there was a query about orders and SASS had to review the job with the customer.
SASS needed a modern, integrated ERP solution and invited several suppliers to provide a proof of concept using a sample production case. Epicor was at the top of the list because it is designed specifically for manufacturing. In the test case, Epicor proved much faster than any of the other suppliers, taking just an hour and a half to complete the task. None of the other suppliers could match Epicor, and one supplier even gave up after two hours. Epicor also offered better value for the money in terms of cost compared to functionality. Ultimately, it was user feedback that persuaded SASS to choose Epicor.
Novianto Nugroho, Group Head of ICT, SAS Group, said, “Several managers stated that the user interface and experience of Epicor, especially the reporting capability, are amazing.
Epicor is very important to SASS and the customers we serve. Without Epicor, we could not function in the fast and effective way we can today… On top of that, Epicor is giving management the information it needs to accurately develop our strategy for the future.
"Epicor is very important to SASS and the customers we serve. Without Epicor, we could not function in the fast and effective way we can today…On top of that, Epicor is giving management the information it needs to accurately develop our strategy for the future.”
SASS has implemented Epicor Kinetic in just nine months, which Nugroho believes is much faster than other ERP solutions. The team was struck by how Epicor supported both the implementation and training. There had been some concern about how readily the staff would learn to use Epicor. So, at no extra cost, Epicor sent an experienced trainer from Malaysia to the SASS head office for five days to help provide hands-on training.
Deployment was managed by an Epicor regional business partner, Pt. Inti Data Utama supplemented with consultancy and advice from Epicor. “Epicor did not leave once we had purchased the product. We always felt Epicor was there supporting and monitoring the implementation process. And when there was an issue, Epicor made sure it was resolved quickly and effectively. It shows Epicor really cares,” added Nugroho.
Several managers stated that the user interface and experience of Epicor, especially the reporting capability, are amazing.
Epicor has proved so successful at SASS; SAS Group is now looking at deploying Epicor across all its businesses in the group.
"Epicor is very important to SASS and the customers we serve. Without Epicor, we could not function in the fast and effective way we can today. We cannot go back again. The data and information we get from Epicor have improved our manufacturing and production processes, making them efficient and cost-effective. On top of that, Epicor is giving management the information it needs to accurately develop our strategy for the future,” stated Nugroho.
With Epicor, SASS has seen a dramatic improvement in operations. Using Epicor to integrate and automate the complete manufacturing lifecycle has transformed planning and budgeting. Time to calculate production costs has been cut from a month to a week and sometimes even to one day, a time savings of more than 75%. Cashflow has also improved because SASS can now accurately and quickly forecast what raw materials it needs and only order for just-in-time manufacture. Previously, the company only used around 70% of materials it purchased within a month, and now it uses 95%. Cumulatively, these improvements have helped to enable SASS to cut its production lead time by 10%, from around 20 days to 17. In addition, it helps the business save money because processes are faster, more efficient, and less wasteful when purchasing raw materials. SASS uses loans to buy raw materials, and by making the process more efficient, it reduces the amount it needs to borrow, which in turn reduces interest payments.
Furthermore, SASS is able to make more informed business decisions based on accurate and real-time information from Epicor. Better insight into manufacturing processes enables SASS to increase production agility and maximize resources such as staff and machinery more efficiently. For example, SASS can use Epicor data to analyze the operating performance of a shot blast machine used for cleaning and polishing metal parts. If the machine is not operating at full capacity, it can be closed down, and the job switched to another unit, saving operator time, energy costs, as well as wear and tear.
Documentation is now digital and automated so that all product information can be instantly retrieved if a customer calls with a question about delivery status. Similarly, the bill of materials is digitally linked to every production job. Any changes during the process are automatically updated. This is essential for the SASS make-to-order process since jobs are unique and need a different bill of materials for each new job. Anyone in the business searching for a customer, invoice, purchase order, or any other item instantly gains access to all information associated with the job.
Most importantly, these improvements to production operations are helping SASS maintain and increase high-quality customer service. When a customer requests a job, SASS can provide accurate costing up to 30% faster, and if a customer has a query, SASS can respond quickly and efficiently because all information is in one place with the Epicor solution.
