For more than 100 years, Johannes Steiner GmbH & Co. KG has counted on its expertise on the production floor. When it was founded in 1903, the family-owned company primarily provided small parts for clocks and watches. Since 1935, the company has produced bobbins for sewing machines for domestic and foreign markets. Cold forming of steel and stainless steel triggered important developments at Steiner. The tradition-rich company has used SAP R/3 to handle the IT side of its literally polished metal-processing production processes since 1998, but it had not exhausted the full potential of SAP software in other areas of the company.
“After a certain operations phase, requests for organizational consistency or simplification of business processes appear almost automatically. That’s why a migration to mySAP ERP 2004 and issues like e-business or archiving were discussed soon after implementation of SAP R/3. But our primary goal during the migration was to map the business processes consistently and without media breaks,” explains Ljubinka Zmijanjac, who is responsible for IT at Steiner.
Media breaks not a permanent condition
For example, production creates semi-finished goods by its very nature, and Steiner stores such semi-finished goods at various places in its facility. The company formerly had to maintain an overview of the items without electronic support. The same was true for shipping end products. “Despite SAP R/3, printed picking lists were still processed and matched in individual steps. Packing was followed by weighing and the printing of delivery notes, labels, and address labels,” says Zmijanjac as she looks back to the unintegrated PC solution.
Production work at Steiner demands constant effort. Steiner forms 40 tons of steel and stainless steel on its presses. Lathes handle another five tons. At the end of the day, about 1.2 million steel box nuts and 40,000 stainless steel box nuts, 200,000 olives, and 30,000 sewing machine bobbins must be picked and placed in an almost infinite number of packages to supply customers with goods on time.
The way to paperless order processing
In June 2005, Steiner and its consulting partner, ASS.TEC GmbH, took stock of how the company was using SAP software. The inventory identified numerous business processes that could be optimized – processes in warehouse management, packaging and shipping, import, inventory, scheduling, revenue account assignment, balance sheet production, and human resources. With the migration to mySAP ERP 2004 in June 2006, Steiner and ASS.TEC optimized these business processes. For example, using the warehouse management functionality of mySAP ERP, Steiner now knows where the material for a specific production order is located and can track the status of production at all times. Employees capture material data with barcode scanners – a plus for process security.
Steiner used the packaging functionality of SAP R/3 to resolve system breaks in shipping. Today, Steiner packs the material for a delivery in containers, such as cartons, pallet cages, and sacks, with the support of SAP software, creating handling units. The message determination functionality of SAP R/3 is used to create the appropriate packaging label and a goods receipt and issue slip that contains the most important data of the packaging unit in barcode form. The next level of packaging is also mapped, because the software also creates labels when loading the handling units onto pallets. Packing lists are a useful byproduct of the packaging functionality. Some countries, such as Brazil, require the packing list as an import document. Steiner used to produce the list manually, which demanded a great deal of effort, but it now produces the list automatically.
“Today, we can save ourselves many of the previously labor-intensive work steps, and the posting quality has been significantly improved, says Zmijanjac. Monitors at the workstations in the shipping department display the orders. The weight, number of items, type, and prices are now captured automatically and transferred to the appropriate printers. This approach drastically reduces the number of errors.
Improved productivity and profitability
Steiner also profits from mySAP ERP in its import business. When an important vendor moved its corporate headquarters from Germany to France, Steiner suddenly crossed the threshold that required creation of an INTRASTAT notification. Standard SAP software can generate the notification at the touch of a button. In the past, Steiner did not schedule procurement with SAP software, which resulted in incorrect orders and surpluses or shortages of many materials. The integrated SAP solutions has led to improved efficiency.
Currently, approximately 20 users at Steiner work with mySAP ERP, benefiting from access to relevant data from production through shipping. “We have clearly gained transparency and data quality, and we can now control our operating processes better, which leads to faster work processes,” says general manager Dino Steiner to describe the successful optimization of ERP processes. “In addition to qualitative improvements like consistency – and thus process security – we have also seen quantitative effects. Shortened process times or more rapid reactions to the desires of our customers add up to a productivity and profitability increase of 15 percent to 20 percent.” That’s why the company will continue to follow its optimization strategy in the future – with features like permanent inventory in mySAP ERP, which eliminates the need for a demanding physical county of inventory.