Being a toy manufacturer isn’t all fun and games, especially as the Christmas sales season sneaks up. Pressman Toy Corporation, the third largest game manufacturer in the U.S., wasn’t looking forward to another year of guessing just how jolly the season was going to be. This year, Pressman was determined to find the best way to organize its working capital, control inventory, and establish solid marketing projections to make sure it would not be caught short.
Pressman Toy, founded in 1922 by Jack Pressman, first made a name for itself when it acquired the rights to Chinese Checkers–still in the company’s line. A pioneer in licensing, Pressman manufactured Dick Tracy and Little Orphan Annie playthings in the late ’30s and later picked up licenses from Disney for Snow White and The Mickey Mouse Club.
The company has scored recent successes with such TV game-show adaptations as Wheel of Fortune, Jeopardy, and Double Dare, along with its Gooey Louie and Scooby Doo lines. The last two years have added Spider-Man and Hulk movie tie-ins.
Moving on to mySAP All-in-One
As a midsize business looking for an integrated platform, Pressman checked out “the usual software suspects.” Business and technology consulting firm Answerthink, an SAP Business Partner, touted the benefits of a mySAP All-in-One solution based on SAP Best Practices for Consumer Packaged Goods (CPG). Pressman was soon hooked. The early part of the story was reported in an article, “Wheels of Fortune,” in Consumer Goods magazine online.
“It was very attractive to us to have a preconfigured solution for a CPG company that would enable us to implement in a matter of months,” Alan Novick, director of information systems for Pressman, told Consumer Goods. “We also liked the fact that the SAP Best Practices embedded in the software walk you through, improving your business processes as you implement. It was very helpful to get insight into how the big boys do it.”
Answerthink and Pressman developed projections for how the implementation of SAP solutions would generate ROI, incorporate financial best practices, streamline business processes, and control inventory. These solid numbers made the convincing case with Pressman executives. Working with SAP Services partner IBM Global Services, Answerthink helped Pressman roll out the first phase in three months in early 2003.
During this phase, the company deployed mySAP Financials modules for accounts receivable, accounts payable and general ledger. Previously, Pressman had scattered, non-communicating islands of information. Now, integrated information is available at their fingertips. This consolidation has helped do away with dependence on many spreadsheets, improve financial and reduce accounts receivable.
“What’s really great about SAP is that almost every screen hot links to other information,” Novick told Consumer Goods. “If you’re looking at an accounting document, a sales document or customer invoice that you’re paying and you want to know if it was paid, you can quickly navigate through and find out what it’s for.”
Novick notes that this kind of integration is especially useful to a midsize company like Pressman. With its limited manpower, they are dependent on IT systems to bring it all together, “and so far we have been thrilled.”
Keeping the ball rolling
For their second phase, which went fully live on August 1, Pressman added SAP functionality in sales and distribution, materials management, production planning, purchasing, and inventory management to streamline logistics. The move to control inventory is critical because Pressman is a rare domestic toy manufacturer competing against importers. Thus, inventory must be kept lean in an environment involving thousands of items.
“Our customers are pushing for more automation and tighter integration with the supply chain,” Novick says. “They basically want us to be their warehouse, to coordinate our shipments with them so tightly that it’s almost as if we were a part of their organization.”
This movement, he suggests, will ultimately force more manufacturers to participate in electronic marketplaces. In the meantime, Mega-customers like retailers Wal-Mart, Kmart, and Toys ‘R’ Us are already collecting point-of-sale information at their registers and transmitting it to Pressman weekly, along with inventory levels.
Pulling their feet from the fire
Since the major crunch for the toy business comes in the last three or four months of the year, the industry is especially sensitive to consumer trends and swings in demand. Pressman must keep an eagle eye on the marketplace all year long and be ready to switch direction at a moment’s notice.
“Behind each game are production plans in the U.S. and purchasing plans for domestic and overseas suppliers that involve considerable lead times,” Novick says. The mySAP All-in-One solution, based on industry best practices, makes it easier to identify necessary changes and move on them. The best practices, he notes, were the core consideration in choosing SAP.
So far, the logistics phase is up and running smoothly, though Novick notes that it’s still to early to know how completely the company will realize the most crucial long-range benefits of tighter inventory control and more realistic and timely production schedules.
“One of the reasons why we chose SAP is that we don’t know what the future is going to bring,” he says. “We are doing things this year that, only 12 months ago, we had no idea our customers were going to require. We want to have the tools ready to participate in these customer initiatives. We know that SAP is always going to be on the cutting edge of consumer packaged goods and can provide us with anything we need to meet what our customers demand.”
For the complete Consumer Goods magazine article on the SAP implementation at Pressman Toy, see www.consumergoods.com/issue/july03_art5.htm.