It's called the Great Divide - the ridge of the Rocky Mountains that separates the streams flowing west from those flowing east. In 1805 Lewis and Clark climbed this ridge. From the summit, they expected to see a vast plain to the west, with a large river flowing to the Pacific. However, when they reached this peak, Lewis and Clark discovered only more mountains.
Today, in the land of ERP (enterprise resource planning), end users have set out on their own expeditions. They've climbed the sometimes treacherous mountains associated with vendor research, RFPs (requests for proposals), and pilot phases. What have many found to be the top? SAP. From this summit, end users have expected to see integration at its finest. However, when they implemented SAP, most end users discovered only more towering climbs in terms of data collection. Other users reached a peak that could finally bridge the gap between SAP and data collection - this peak is a vendor called PEAK Technologies in Columbia, MD.
A Part Per Purchase Order
$190 million Printronix is one of the end users that reached PEAK. The printer manufacturer and distributor has full manufacturing facilities in Irvine and Singapore, configuration facilities in the Netherlands, and distribution and configurations facilities in Memphis, TN. On both sides of its business (manufacturing and distribution) Printronix runs SAP globally for its ERP system. On the manufacturing side, Printronix brings in parts from suppliers and moves them through to production. At the same time the company also makes its own parts. On the distribution side, Printronix distributes all spares and consumables. The company distributes from Memphis to local suppliers, from Singapore throughout Asia, and from the Netherlands throughout Europe. "However, for some of our major customers - our global OEMs (original equipment manufacturers) - we actually ship from Memphis, TN, to their customers, worldwide," explains Victor Fitzsimmons, senior VP of manufacturing at Printronix.
The process for distributing these parts was simple. Printronix would receive a PO (purchase order) from a customer - let's say for 50 parts (a part being anything from a complete printer, power supply, or a controller board to a simple hammer-spring for a printer). Those 50 parts would be one transaction, one purchase order for a quantity of 50. The company would then pick those parts, package them, and ship them all as one transaction. Then things started to change. "Now our customers want single unit transactions," adds Fitzsimmons. "Electronically, those 50 parts that used to come in one PO, they would now give us 50 POs. Then we would have to go pick those 50 parts separately. So you're almost increasing the transactions by 50."
The Three Errors Of Manual Data Collection
Printronix was doing all its data collection manually, and there were errors - especially when it began issuing separate POs. The errors were typically data entry errors. Everything was hand-keyed into a terminal. In the factory, Printronix picked parts from bins. This was another area for errors. "It was more of a batch process," says Fitzsimmons. "The picker would go into the factory with a list of 50 parts to pick, and pick from rows of bins. But because we didn't have data entry equipment in the isles, the picker would have to go back to a terminal and key in all 50 parts." Fitzsimmons says one problem was the time delay - from picking to keypunching. Second he says were keying errors. "The third problem with this method: If parts were picked before a break, or at the end of the day, the picker would leave it to the following day." What did that mean for Printronix? If the company was doing cycle counts, it found the part had already been moved, but the transaction hadn't taken place yet. This created cycle count errors which took time to recheck.
Pat Coyne, manager of application development within the information services group at Printronix, notes another area creating problems for the company. "As manufacturing reduced the cycle time down to a day or two, it added stress on the overall process. We had to increase it, fast. Somehow we needed to transact the data as fast as the production group was moving - to get product in and out the door."
Finding A Partner For The Enterprise Trek
Printronix began its solution search at the beginning of 2000. "We took a look at all the systems out there," says Coyne. "We looked on the Web, through vendor relationships, and tried to see what other companies were doing." Printronix then narrowed it down to four companies, based on a couple requirements. The first and foremost requirement was that the vendor had to have experience with SAP, since Printronix runs SAP globally and all of its prime interfaces were with SAP. "Most of the vendors had experience with SAP, but not a good understanding of our technology and our goals and objectives," says Coyne. Printronix brought three vendors in-house, went through demos, and looked at the various functionality and customer sites they had out there. "We even sat down with them to get a feel for their goals and objectives. We wanted to see if they could actually work with us as a partner," adds Coyne. "This is a long-term structure. We want to get the infrastructure in place and then grow the capabilities as we expand operations."
"They've Been Down The SAP Road."
Finally, Printronix reached PEAK. PEAK had experience with SAP and had the same goals as Printronix. "They've been down the SAP road and were headed in the same direction as we were," says Coyne. And, as a global company, PEAK had a presence in the global marketplace, including after-sales support. Printronix purchased the PEAK S/3 Interface. It's a solution for interoperability between the SAP R/3 software system and automated data collection. Coyne explained the Interface provides real-time interaction that is required to process data for R/3 materials management, production management, sales and distribution modules. It enables R/3 system users to operate their application in a radio frequency (RF) wireless environment. With the PEAK S/3 Interface, Printronix did not need to alter its operational business processes. All the R/3 business logic and processes remain the same, therefore creating a link between R/3 and the RF handheld terminals. The PEAK S/3 Interface uses SAP R/3 communication technologies that Printronix already has.
These include BAPI (Business Application Programming Interfaces), RFCs (Remote Function Calls), and IDOCs (Intermediate Documents) for direct data communications. Transactional Remote Function Calls (tRFCs) are used to send and receive IDOCs. Synchronous Remote Function Calls (sRFCs) allow direct access to BAPIs and are used to request and retrieve specific data from SAP. PEAK S/3 Interface manages the BAPIs, RFCs, and IDOCs via ALE (Application Link Enabling) technology.
Printronix began the PEAK S/3 Interface implementation in March 2000. The company ran a pilot and had a development SAP system that ran in concurrence with the production system - as a separate box. "We set everything up as a pilot on that system," adds Coyne. "From that we did all the configuration work and the initial training for the key users globally. Then out of that, we developed all of our training documentation - which PEAK provided. Printronix split the installation into two phases with different sets of transactions for each phase. "We tried to pick a few standard SAP transactions so that we could get some experience with their configuration tool," explains Coyne. "After phase two, we want to actually do our own configuration in-house."
Eliminate Processes Between Receiving And Manufacturing Operations
Phase I and II automates about 13 total Printronix transactions. Phase I included a WIP to WIP (work in process) transaction to allow product movement between WIP store locations within the plant. Printronix has a purchasing and receiving area that brings the product in. "That way we can have the folks at the dock receive it right there and get it in a Kanban environment," says Coyne. Kanban is a SAP procedure for controlling production and material flow based on a chain of operations in production and procurement. The replenishment is not triggered until Printronix reaches a certain production level. The signal for replenishment is issued by a card (Kanban card) that is sent by a consumer to the supplier. Coyne adds, "We don't want it to stop at the warehouse. We want the product to come in through the door, be scanned by SAP, follow all receiving processes, and put on the
production floor." With the Interface, Printronix eliminated the process of handling materials between receiving and manufacturing operations.
Because Printronix eliminated process steps, it needed a technology to keep things moving quickly. For receiving the company has a WIP to WIP. It also has various put-aways. This allowed Printronix to bring in items and put them in the stock room. This was called a stock placement removal/ PO put away transaction - which is an LT1, SAP transaction. Printronix then did an issue to WIP transaction - which is for floor stock items. The company has large bulk floor stock items. If it wanted to pick something on the floor it needed an automatic transaction to do it. Printronix also implemented a back flush transaction. Back flush is where a component is built on the production floor, using a lot of other components that are issued a WIP order. "When the product is finished, we back flush all of the components before moving them into distribution," explains Fitzsimmons. Printronix runs a transaction that issues all components electronically as the last step to that production order. "Everything is done at one time instead of individually," adds Coyne. "And since the system knows which and how many components are in each of our printers, it knows to automatically relieve the inventory of all those components."
"This is very significant," says Fitzsimmons. "We build variants of configuration. We're not building standard stock - you know, a blue car or a red car - we're building whatever color you want with any components you want. And there aren't many companies using a variant configuration in SAP." Coyne agrees. "It's a little more complicated in that a normal company might take a standard bill of materials back flush. We actually take a standard bill - which may include different components on that bill based on the order for that customer."
Two-Way WAN Communication
At the top of this ridge, Printronix has SAP running the whole infrastructure globally. Again, those are all the transactions mentioned earlier - the Kanban and the WIP. In addition to that, Printronix has a PEAK RF server that connects to its SAP system. The server controls the Symbol handheld devices located at the different regions. The SAP system is located in Irvine, CA, with the PEAK RF server sitting next to it. At each plant, Printronix has access points set up on the ceilings and walls that communicate with the handheld devices on the production floor. Those communicate via Printronix's global WAN (wide area network) through the RF server, into the SAP system in Irvine, CA, and back again. It's a two-way pass on communication. Coyne adds, "The other key piece to this thing - that sort of makes it all work - is the Printronix printer that prints our bar codes and labels. And on the thermal printers it has online data validation to ensure that the bar codes will be accurate."
For example, let's say Printronix brings in a part from manufacturing. In this case, it comes in and is received within the receiving group via an RF handheld scanner. That part is then put out to the production floor, to the Kanban location that it's set up for. This is the production area that is actually building the products from sales orders. Pickers will then pull the parts out of Kanban, they'll build the assembly, and they'll transfer the parts to WIP locations, using the RF scanners. The printer is then built and scanned. Materials are then back flushed through an RF transaction and all the parts are put into the system. This closes out the order in so far as parts being issued to the WIP transaction. Employees do a confirm transaction and move the product to distribution for shipment. In most cases Printronix then produces an inter-company bar code or compliance label for that particular product.
Coyne explains, "Some of our major OEMs have a requirement for compliance labeling. We do compliance labels for almost every customer we have." Printronix can produce an inter-company bar code for moving the part between facilities. This way the company can receive it at the other end without doing keypunching. Printronix can also produce a bar code for the customer. This way when the customer receives the part, it too can scan it without keypunching. "Most of the customers we're working with require a bar code - either for compliance labeling or for standard information, such as part descriptions, serial numbers, etc," adds Coyne. "A lot of customers now require compliance labeling. If the label gets to them and it can't be read, we can be fined. There are some hefty fines out there. That's why we have online validation."
Heading Towards The Wireless World
Although Phase I was really only to get the Kanban piece in place, Printronix has seen significant benefits. "Now, if you order a printer from Printronix, we can ship it tomorrow... anywhere in the world," explains Terry Pruett, director of thermal products. "That makes us pretty unique in this business." Additionally, Printronix has seen flexibility as it changes its manufacturing operations. With RF, the company can move materials around without effecting the infrastructure of the manufacturing floor. "We don't have to do cabling and some of the other expensive things that also take time," says Fitzsimmons. For the process on the production floor, we cut down some of the SAP transactions that tend to be labor intensive from a data entry standpoint."
However Phase I was still just the first step. With Phase II the company wants to start looking at other areas, such as cycle count, and repair processes. Coyne notes, "We want to work on the shipping area in so far as integrating with our carriers. We want to do the same thing over at our repair cycle where we do a lot of international shipments. Even though we've put a lot of data in the system, there's still more work up front that we think we can automate."
On the distribution side, the number of Printronix transactions is growing, particularly for its large OEMs. With Phase II, Printronix wants to put compliance labels on all materials, right at the bins, using its own wireless thermal printers and external access points. "When we can do that we can actually bring the printers into the warehouse, down the aisles and be able to do the compliance labeling at that point - as opposed to batching it," explains Fitzsimmons.
Coyne says, "Phase I is really just a spring board for us to get started." The PEAK S/3 Interface has served as a catalyst in getting Printronix over that great divide that separates SAP and DC... and it didn't take nearly as many years as it took Lewis and Clark. In fact, Printronix hopes to begin Phase II in the first quarter of 2001.
Questions about this article? E-mail the author at StacyM@corrypub.com.