Magazine Article | June 1, 2003

Multiple Systems, Multiple Nightmares

Source: Field Technologies Magazine

Armed with new ERP (enterprise resource planning) software backed by consolidated data centers, $3.2 billion minerals producer Imerys attacked its fragmented systems and manual processes.

Integrated Solutions, June 2003

Like many IT executives, Imerys CIO David Shea is working hard these days to build better customer interfaces. "There is a strong emphasis in our organization right now to get closer to our customers," Shea says. Already underway at the $3.2 billion Paris-based minerals processing company are two key customer-facing initiatives. First, Imerys has started monitoring customers' holding tanks via VMI (vendor managed inventory). Also, it will soon be rolling out tools to enhance customers' visibility into Imerys' supply chain processes.

Until recently, Imerys would have had difficulty envisioning, let alone implementing, strategies for interacting more directly with customers. Faced with daunting disparity among business applications, the global manufacturer struggled to communicate internally. Compiling reports, querying databases, processing batch orders across locations - these activities, and others, were fraught with inefficiencies caused by a general lack of integration and automation.

Of course, it wasn't all bad news. In fact, the fragmented IT infrastructure constituted what might be called "a good problem to have" - i.e. it reflected a flourishing business. "Imerys is the product of very fast growth and multiple acquisitions," Shea explains. "As we acquired companies, we ended up with an IT environment that basically wasn't integrated. It was full of aging applications and inconsistent business processes."

The mantra for change at Imerys was as obvious as it was insistent: consolidate ... consolidate ... consolidate. That's what growing companies with disparate systems eventually must do. As much as possible, they must pull everyone - every business unit, every facility, every employee - onto the same network. And, on that network, they must run common applications accessible by all corporate entities. Only then, after they have brought internal consistency to their systems, can companies trust those systems to be opened to their customers. And, that's exactly the path Imerys has taken. Along the way, a key step was to replace its multiple legacy systems with a single, core supply chain and business application suite.

Put Centralized Apps On Shared Storage
For Imerys, pulling together its systems first required deciding where to start the rollout. With 290 industrial and sales sites in 36 countries across North America, South America, Europe, Asia, Africa, and Australia, Imerys clearly doesn't do all things in one place. And, it doesn't do just one thing. While its core competency involves extracting and processing industrial minerals, those minerals are produced for a variety of purposes and customers. The Specialty Minerals group, for example, makes technical, often ceramics-based products used in the production of plastics, paints, tableware, and floor tiles. The Pigments for Paper group produces white minerals (e.g. kaolin) used by paper manufacturers. Overall, the company's four business groups reflect not only product and customer diversity but also the geographic scope of its IT needs. While one group, Building Materials, operates primarily in Europe, the others (Specialty Minerals, Pigments for Paper, and Refractories and Abrasives) have a significant global presence.

In the U.S. alone, Shea's IT team was supporting eight different business application suites. The U.S.-based pigments group had the largest number of those disparate suites - four. So, that group became the pilot project for what will eventually be a full global rollout of IFS Applications, the company's new business application suite, which provides ERP (enterprise resource planning) and supply chain functionality. (The suite will support Imerys' North American and European operations. In Asia and in South America, Imerys plans to rely, at least for now, on existing applications that work well for those smaller operations.)

As it prepared to replace its legacy systems, Imerys knew it couldn't move to centralized apps unless it first created an enterprise-wide pathway for data transfer and retrieval. "Early on we put in a global telecommunications infrastructure based on VPN [virtual private network] technology," Shea explains. "We have already rolled out VPN-supported capabilities, including Lotus Notes messaging, to 80% of the company." In addition to building a global VPN, Imerys began to consolidate its data centers to provide its applications and users with shared server and storage resources. In the United States, it has already consolidated four data centers into one. Although the process has not yet started in Europe, Shea confirms that data center consolidation will occur there as well. "We are committed to reducing the number of data centers over time," he says. "That will eventually allow us to support just two instances of IFS - one in the United States and one in Europe." When the implementation has been completed, IFS Applications will reach more than 900 users in North America and more than 700 in Europe.

Integrated ERP, Invigorated Order Fulfillment
Having an integrated business application suite has enabled Imerys to pull formerly separate processes under one ERP and supply chain umbrella. With the integration of systems comes a much improved integration of data. "Users can not only perform queries, but they can also extract and download data to do additional analyses - all without IT help," says Shea. "Our business super users report that their decision-making abilities substantially increased after the removal of the funnel approach to delivering information." Moreover, Imerys has been able to change and standardize many of its core business processes. Rather than being handled differently by different plants, the quality assurance approval process, for example, has been standardized and integrated with the product shipping function. Inventory is also better controlled now that information about raw materials and finished goods inventory, as well as standard costs for each, is loaded into a central system. Previously, the task of matching costs to items in inventory required customized data extractions from various legacy systems.

The integrated system has also given Imerys the ability to streamline many of its business processes. This capability has been a key time and labor saver for a company that still takes in most orders by e-mail, fax, or phone. "In our industry, even EDI [electronic data interchange] isn't widespread, so manual order entry processes are still prevalent," Shea says. Even so, the new system has significantly reduced the labor formerly wasted in processes such as purchasing. "Probably 70% of our purchases are for plant maintenance items - motors, gears, lubricants, etc.," he says. "Because we handled purchasing with everything from legacy apps to manual entry at plants that didn't have purchasing systems, we had a very loose requisitioning process. Three-way matching of requisitions, purchase orders, and invoices was often done manually - digging through piles of paper to find matches." By contrast, the new system automatically handles three-way matching for each vendor invoice.

Finally, integration has speeded internal transaction processing and driven down delays in order fulfillment. Now, rather than having to log in to multiple systems - a common occurrence in the old days - users have real-time access to order and customer information. In the North American pigments operation, for example, having four business application suites in operation meant that there were four different order-taking systems. Much of the data was kept on spreadsheets; seldom was it comprehensive or timely. "Since we were maintaining data in multiple systems, we had to do a lot of direct correspondence with manufacturing locations to determine which plant could fulfill the order," Shea explains. "Several hours or even a day might go by before we could confirm an order for a customer."

Order fulfillment is further enhanced by an integrated master scheduling tool, which manages Imerys' made-to-order production timelines. Customer service representatives can now quickly determine "availability-to-promise" when customers call in to secure order turnaround times. Furthermore, according to Shea, customer credit checks, which once forced delays of up to three days, are now instantaneous.

Let Customers See Your Supply Chain
With the IFS rollout well underway, Imerys is looking to use its now tightened supply chain applications to get closer to customers. Many are manufacturers that use Imerys' raw materials and products in just-in-time production environments. Imerys' goal is to make those customers confident about the fulfillment promises they make to their own customers. So, the company plans to extend to its customers Web-based visibility into order status. "From a customer service perspective, meeting customer demands is straightforward," says Shea. "Besides having their orders filled accurately and on time, they want easy access to accurate information about where their orders are in the process. It's as simple as that."