ERP Solution Lets Optics Manufacturer Focus On The Bottom Line

You probably aren't familiar with a company by the name of ELCAN. However, if you have ever been to the movies, you most likely have benefited from the company's work. ELCAN is a leading manufacturer and supplier of precision optics, and has maintained its stature in the industry for the past 45 years. "Around 75% of the movies shot in the world will be made using our lenses," states Dr. Michael Riggin, vice president of operations at ELCAN.

ELCAN was founded by Ernst Leitz in 1952. Currently, ELCAN is owned by its parent company, Hughes Aircraft. Until 1978, ELCAN primarily assembled parts for LEICA photographic cameras and lenses. While the company continues to produce lenses for LEICA cameras, it also provides an increasing variety of optical products. In addition to commercial optics, ELCAN works on defense applications including image intensification devices, infrared laser assemblies, periscopes, and infrared telescope systems.

The company is located just north of Toronto, Ontario, and employs about 600 people at its 210,000 square foot facility. As a full-service optics provider, the company designs, develops, manufactures and tests all products at the company's one location in Toronto. "We do not buy what we can make ourselves," comments Riggin. "We are generating final assemblies from raw metal and raw glass."

Moving Away From Customization
Near the end of 1992, ELCAN officials decided the company had outgrown its present enterprise resource planning (ERP) system. The officials wanted a new system that would require less customization. "The entire philosophy of installing a new system was that we would take the best that was available and tailor our business to the standard modules that are in that system," recalls Riggin. "The disadvantages of the previous system were that there were no resource planning capabilities, and the reports were very customized. We wanted to get away from that and begin using standard reports."

Another goal of implementing a new system was to link all the departments in the company. For example, the company's previous system allowed it to track ongoing manufacturing projects. However, that manufacturing information was not compatible with the company's financial system.

Manage Projects More Efficiently
ELCAN narrowed its list of potential ERP suppliers to three before doing more thorough evaluations. From that short list, the company selected MK Manufacturing developed by the MK Group (Islandia, NY). As part of the installation, ELCAN installed almost all of the software modules available with the MK Manufacturing system. The implementation lasted just under four months, and ELCAN currently has about 230 employees who access and use information on the system.

The new system has enhanced the company's ability to manage the many discrete projects that are running simultaneously at the facility. "We make about 4,000 different products in our plant," says Riggin. "Each product run can be anywhere from a few thousand of each product to as few as one, depending on the customer's request. Following the installation, the company can monitor machine capacity as well as cost-center capacity. This allows management to view the workload of individual departments and machines.

One area of production that has been streamlined is project control. When a purchase order arrives at the plant from a customer, ELCAN begins to set up that project. The project module in MK Manufacturing allows the company to control the project from creation to engineering, parts, purchases, routing, budgets, costing, and resource planning.

Track Parts And Projects
As part of the implementation, MK Manufacturing was interfaced with a bar-coding system supplied by Epic Data Systems. The interface allows ELCAN to track parts in the plant on a real-time basis. This ability allows the company to know exactly where each part is, and the current stage of production for each job. At any given time, ELCAN is working on about 300 separate projects. Depending on the size and complexity of a project, the project length can range widely between three months and eight years.

With hundreds of separate projects requiring thousands of discrete parts, ELCAN's solution had to address resource planning. Since the implementation, ELCAN has seen its revenues increase 300%. Despite the company's growth in sales, ELCAN is still managed by the same number of employees it had prior to implementing MK Manufacturing.