Expanding Instead of Stagnating


With automobiles, nothing works without crankshafts, universal joints, connecting rods, and cylinder heads. Manufacturing these products is complex. Handling rough-cast parts requires that automobile manufacturers and their vendors have high-precision processing centers, production facilities, and special machinery, such as the products manufactured by WEMA VOGTLAND GmbH. For example, the drilling in cylinder heads for oilways must be exact to the hundredth millimeter. The customers of the midsize machine manufacturer in Plauen, Germany include almost all national and international brands, including Audi, BMW, Ford, General Motors, Daimler Chrysler, and Volkswagen along with suppliers like Continental and MTU. That’s why WEMA VOGTLAND needs an international presence. In 2002, it founded a subsidiary, Vogtland de México, and in 2006, it founded WMA VOGTLAND COMÉRCIO DE MÁQUINAS ESPECIAIS LTDA. in Brazil.

Putting everything to the test

Successful companies that seek to secure emerging strategic markets like China must orient themselves to reality. With the support of an external consulting firm, WEMA VOGTLAND recently put its business model, all its processes, and its IT landscape to the test. “The result was that we had to expand out product offerings,” says Stefan Wolf, IT director at WEMA VOGTLAND. “Customers demand modular assembly lines and processing centers that can be retooled quickly and that have short downtimes. With our new processing centers, HPC FLEX-V100 and 200, and other standard modular construction, we can react very flexibly to the most varied production tasks.”
Even company-critical process flows like order and project processing demanded more transparency. Processes from purchasing, production, and spare parts management for service had to be tightened or undergo complete restructuring. “The foundation for all this was a highly integrated, flexible IT environment with transparent key performance indicators (KPIs),” says Wolf. “But that’s just where we had a problem.” Although parts of the midsize company’s IT was well-tailored for its existing processes, it could not be expanded. It consisted of software based on AS/400 that was developed in house. It also included DCW, s+p, Microsoft Project, and separate solutions for controlling, HR, and project planning. Numerous interfaces required a great deal of maintenance and cost connected the diverse solutions with each other.

Getting rid of interfaces and lowering costs

Today, all that is over. Since the beginning of 2006, the midsize company has consolidated all IT-supported work flows with a qualified SAP All-in-One partner solution, All for Machine, from All for One Systemhaus AG. An SAP All-in-One sales and service provider partner based in Jena, Germany, PlanOrg Informatik, handled the implementation. With the new solution installed, many interfaces could be discarded, along with time-consuming additional programming for the in-house enterprise resource planning (ERP) system. “WEMA VOGTLAND has saved about €50,000 annually in costs just in the IT department,” says Wolf. “In addition, the new industry solution is much easier to adjust to changes.” Even transferring a huge amount of legacy data was seamless: 88,000 material master records, 50,000 bills of material, 38,000 work plans, 3,800 vendors, 2,000 customers, and 9,000 inventory items.

A firm grasp on the helm

IT savings are only one advantage of the new solution. Today, all order information is captured, managed, and distributed in the industry solution. That significantly increases the quality of customer and product master data. “With the integrated project system we have a firm grasp on the helm. We handle sales orders; the related schedules; material planning; and procurement, production, and inventory processes transparently, according to needs and economically,” says Wolf.
By way of comparison, the midsize company used to process project and order control with the in-house ERP system and with Microsoft Project. Bidirectional data exchange between the two systems was impossible. Order and project data along with changes in projects had to be captured manually. That meant transmission errors occurred during forward scheduling of personnel, production, and assembly capacities. Only limited information on the current status of a project and exact delivery schedules was available.

Information at any time

“Today we can provide a customer with information on the current status of a project and on the exact date on which the customer will receive a machine,” says Wolf. Uniform work breakdown structures, network plans, and milestones determine the schedule for a customer project – from setup, detail planning, and realization to completion. The company can measure the status and progress of a project at all times because actual data, such as material costs, schedules, and personnel capacities, is continually balanced, controlled, and valuated against plan data.
For example, information on deviations (additional costs for material procurement or falling below an inventory level, for example) is displayed immediately to employees in purchasing so that they can initiate countermeasures in near real time. Countermeasures can include recalculation and renegotiation with vendors or reordering the corresponding raw materials or parts produced by computer numerical control (CNC). WEMA VOGTLAND stores all documents related to an order, such as an order confirmation, digitally as an attachment on a content server. E-mails are stored directly; fax documents scanned, then stored. “Mountains of paper for purchasing are a thing of the past,” says Wolf.
All the costs that arise within a project flow automatically into controlling, where they can be evaluated at any time for internal and external reporting. “We determine the foreseeable costs and profit of the entire project in near real time and on the basis of up-to-date numbers,” says Wolf.

Early warnings mean no bottlenecks

The company now has sufficient time to plan personnel, material, and machine time in advance for production. The production manager sees a graphical display of ongoing and upcoming production orders on a planning board. Thanks to near real-time confirmations on individual orders from the factory, the production manager always has up-to-date information on the status of orders, capacities, and schedule changes. Special terminals in the factory provide all machine operators with access to the industry solution and are used for the confirmations. If the production manger issues a change order to change the connectors for a part from 90 mm to 100 mm, machine operators can call up the information with a single click. When the order has been processed and closed, the time required is entered into the industry solution using the terminals.
If a machine operator needs additional drawings or blueprints for an order, the information is available over the terminal. The drawings are now linked to orders and come from a third-party product data management (PDM) system that is connected to All for Machine with standard interfaces from SAP. According to Wolf, that means that there is no longer any need for time-consuming searches for CAD data, “which is a considerable savings of time, considering the total of 500,000 stored documents.”

Lots done – and more to do

The service department also requires less time today for delivering spare parts to customers. When customers call because of defective parts, they are immediately informed when a spare part will be delivered. Based on the material number, the software immediately informs the service employee if the spare part is in inventory, if it must be ordered, or if it must be produced. Spare parts are delivered to customers more quickly and downtimes are short. As an additional plus, the company used new solution to restructure its service department. It now handles its spare parts business and service orders separately from additional services like labor hours, travel time, and travel costs for technicians, but it also manages them uniformly in one solution.
“We have already done a great deal, and we have laid the foundation for further expansion with the industry solution based on SAP software,” says Wolf. The company already plans to use additional SAP software for closer collaboration with customers, comprehensive product development, and product data management. The IT director also wants to use the support provided by the SAP NetWeaver platform to link sales employees to the company’s headquarters, implement radio frequency identification (RFID) technology in production and warehouse management, and, in the long term, further push the IT landscape in the direction of enterprise service-oriented architecture (enterprise SOA).

Dr. Andreas Schaffry
Dr. Andreas Schaffry