New Solution Chipping into Manufacturer’s Future Success

The reliable RFID components from KSW Microtec AG are used in all manner of applications – from American Express credit cards to the tickets for the Soccer World Cup 2006 – and enjoy an excellent reputation worldwide. The Dresden-based technology company’s components can also be found in the Hong Kong and Las Vegas airports and in the Moscow subway. KSW Microtec produces several million transponders a month for transferring information contact-free and invisibly. They are used to identify pharmaceuticals or to help determine and monitor the location and status of transport goods.

The company has assumed a pioneering role in the rapidly growing RFID sector with its high-tech developments. KSW developed VarioSens, for example, a flexible RFID tag equipped with a temperature sensor for monitoring sensitive and easily perishable goods, such as blood bags, serums or foodstuffs. The company manufactures its range of products and patent-protected in-house developments in a 3,000 m² cleanroom.

Workflows put to the test

KSW Microtec, which was founded in 1994 by three scientists from the University of Dresden, initially concentrated on improving and further developing RFID components. Its products were so successful that the company soon shifted its focus towards large-scale production. In order to ensure smooth manufacturing, it was necessary to integrate ever increasing volumes of data – covering everything from incoming orders to merchandise planning and liquidity checks – while also ensuring that the transponders met the required quality standards.

This was no easy task, as the company’s software only mapped commercial processes and contained different data management systems. KSW had to use a variety of tools to access the information it needed, including several manual Excel spreadsheets containing lists of quantities produced and error costs. Correctly recording the quantities produced for a given article was often extremely time-consuming in view of the heterogeneous IT landscape. Production orders were first registered manually before logistics staff entered the data in the software.

Management soon realized that its continuing growth was also putting its workflows to the test. As a manufacturing company, KSW requires full production and cost transparency – and that calls for integrated business software.

Up and running within 90 days

“We wanted a system that could calculate the profitability of an order, product, merchandise category or customer at the touch of a button. We wanted to put an end to the laborious actual costing process. And we wanted to map our processes in such a way that we could create interim reports at any time,” explains Michael Schäfer, Head of Purchasing and Logistics at KSW Microtec AG.

It didn’t take long to find the right solution. In conjunction with implementation partner PlanOrg, whom KSW knew well from earlier projects, the company opted to install SAP Business One and the SAP-certified manufacturing software BX from Variatec AG. Germany’s largest manufacturer of RFID components had changed its materials management and production processes over to SAP’s application for SMEs within 90 days. The company went live with the solution at the start of 2008.

Data now only has to be entered once and is then available throughout the company. At the touch of a button, it is possible to see how many transponders the company is currently producing and when which transponder was delivered to which customer. All employees access the data they need according to their role in the company and then evaluate it using the integrated analysis functions.

The individual processes are coordinated as if they formed part of a modular system. When an order is received, the SAP solution automatically creates a production order. A product-related bill of material is then generated and used to derive specific production rules. In the next step, the solution creates material output lists so that the warehouse staff can immediately make the materials available that are required for production. The order is then passed on to production, where the produced inlays are posted.

Quality is the key

It is essential that the components are of a high quality. The qualitative distribution and the component material batches used are entered precisely in the new system and can be called up at any time. In this way, the individual components of the transponders and their composition can be tracked back to any time up to the production date.

The integrated data also enable KSW to reserve certain stocks of material for an order. It was not possible to plan in advance in this way with the previous solution.

Additional bonus for staff

Besides materials management, warehousing, production and the commercial department, the staff themselves also benefit from the new software. Up to now, the in-house bonus system for production staff, which is based on target achievement, had to be maintained manually. This was a lengthy process which involved transferring data to Excel tables for evaluation. KSW has now installed tools that record the quantities produced on the individual machines, which are connected to the IT system. This means staff have their current output and daily target in front of their eyes at all times.

“Our innovations have paid off – giving us permanent access to transparent, company-wide data. The quality assurance department also benefits from accurate data. We can quickly and easily track which batches of raw materials have been used for a particular end product,” says Michael Schäfer. Following the successful go-live of the SAP Business One solution, KSW Microtec now plans to integrate vendor evaluation into the new system.