The papers were signed, and the lawyers had already filed the documents with the appropriate agencies. The acquisition was final. Solar-Mates, Inc., which was selling "non-premium" sunglasses through such stores as Wal-Mart and Kmart, now had high-end products. And, by extension, it also had new customers and suppliers. To reflect its shift from a non-premium to a high-end sunglasses manufacturer, Solar-Mates changed its name. It now goes by Serengeti Eyewear, Inc. - the name of the division it had acquired from Corning, Inc. (Corning, NY). On paper, the acquisition was complete.
Then, the trucks started to arrive at the newly named Serengeti Eyewear's headquarters in Sarasota, FL. Overnight, the former $10 million company became a $40 million business. The assets, which were shipped from Corning, were unloaded at Serengeti Eyewear's headquarters. Prior to the acquisition, Solar-Mates had sneaked by with a small accounting package to handle its business transactions. While this package was only slightly outdated for Solar-Mates, it was woefully inadequate for the much bigger Serengeti Eyewear. "We had a new product line with new customers and suppliers. We also had a lot of new staff. We were literally starting from scratch," recalls Craig Davison, director, information systems, at Serengeti Eyewear. "We needed a long-term infrastructure solution and a short-term installation."
The last of the trucks arrived from Corning in early 1997. By May of that year, Serengeti Eyewear had chosen an ERP (enterprise resource planning) solution from Macola Software (Marion, OH). That ERP system would guide almost every one of the company's business processes. Following the selection of Macola's Progression Series 7.0
, Serengeti Eyewear went live with its new enterprise solution in November 1997. The company is reducing back orders and streamlining its payment processing with EDI (electronic data interchange). It is also launching a new e-business initiative that will bring its suppliers and customers online.
Managing Global Suppliers
Serengeti Eyewear handles product distribution and company administration from its headquarters in sunny Sarasota. The company also has two branch sales offices in London and Hong Kong. Manufacturing, however, is a different story. Serengeti Eyewear outsources the manufacturing and assembly of its products to companies in France, Italy, and Japan. The glass lenses, which use patented technology that "no one else in the world can make or sell," are still manufactured by Corning at a plant in France. The sunglasses themselves - consisting of frames, lenses, and other small components - are assembled primarily in Italy and Japan. Because many of Serengeti Eyewear's suppliers have particular specialties, the manufacturing process can get complicated. To produce a pair of sunglasses, raw materials and components are often transported from one supplier's facility to another's. "Some suppliers are good with metals, and others specialize in plastics. Managing all of these suppliers can get pretty hairy," says Davison.
Business Processes Define ERP Success
Through a mix of work order processing and production order processing, Serengeti Eyewear uses Progression Series to manage all its manufacturing transactions. In fact, the company has implemented almost every module of Macola's ERP solution, which includes order entry, general ledger, accounts payable, accounts receivable, master scheduling, MRP (material resource planning), and production order processing.
The initial implementation only took about six months, but Serengeti Eyewear has since focused on tweaking the system and its business processes. In addition to new employees, the company was struggling with a newly installed infrastructure. "Initially, we did a somewhat ‘vanilla' implementation of Macola. We didn't completely understand our new business processes and how those processes and the system would work together," states Davison. "Every time a problem cropped up, people wanted to blame the software. In reality, there was nothing wrong with the software. We implemented the system based on high-level process flows. As we learned more about our business, we figured out how to improve the processes and tweak the system to optimize performance." During the start-up period, department resources were stretched thin. Serengeti Eyewear had to determine how to build its business and support a new system implementation.
With limited IT resources on-hand, Serengeti Eyewear turned to a local integrator and Macola's technical staff to complete the implementation. "I don't want to give the impression that this was a painless process. Since the day the system went into production, we have been constantly learning more about the software and our company," says Davison. "That's the most beneficial aspect of this type of solution - the constant improvements. The major issues have been gone for months. Now, we pick and choose our improvements."
Back Orders Reduced By 90%
Every pair of assembled Serengeti Eyewear sunglasses arrives at a 20,000-square-foot distribution center in Sarasota. The company performs some final packaging steps at the distribution center. It is from here that the sunglasses will ultimately be distributed to retailers.
Currently, Serengeti Eyewear does not have a WMS (warehouse management system) in place to handle operations at the distribution center. However, the company is exploring ways to optimize efficiency within the warehouse. The final solution may not be an integrated WMS. "Right now, we use Macola for inventory management, and we're not even using all of its functionality at this point," comments Davison.
By using the multiple-location inventory management capabilities within Macola, Serengeti Eyewear has significantly reduced the number of back orders. These back orders occur when ship dates have passed and customers' orders have not been filled. "Back orders are a daily part of our business. Before Macola, we couldn't measure back orders accurately because we didn't know where our inventory was," recalls Davison. The company's process prior to an enterprise implementation was very inefficient. Employees compared hard copy orders with the inventory in stock. If a product wasn't in inventory, the order was modified and reprocessed only to appear again the next day. "Our new system keeps track of this information automatically. If an order arrives at the distribution center, we know that it is going to ship," says Davison. "Overall, we have reduced back orders by about 90%. Back order situations that we experience today are usually based on unexpected demand. The big difference is that now we can actually predict when the back order will be filled. We do this using the information supplied by the Macola MRP and master scheduling modules."
E-Business Strategy Brings Small Suppliers Online
In addition to ongoing ERP improvements, Serengeti Eyewear will launch a new business-to-business Web site (www.serengeti-eyewear.com) set to debut in April, 2000. Currently, many of the company's largest retail customers exchange purchase orders and invoices using EDI. However, many of the company's smaller retailers and suppliers are too small to support the infrastructure of EDI.
"EDI is relatively nonexistent on our supply side, and that is why the Web is going to be very important to us. We also want to support smaller retailers and distributors through the Web," states Davison. "Initially, we will allow certain retailers to place orders, check order status, and track orders via our Web site. As they become comfortable with the tolls, we will expand the capabilities to all of our customers." In addition to the business-to-business capabilities of the Web site, there will also be a consumer-oriented Web site. This site will focus on the technology behind the Serengeti Eyewear lens and direct consumers to their nearest eye care professional.
To assist in the implementation of its e-business strategy, Serengeti Eyewear has outsourced the majority of site development and maintenance to Fourth Channel - a software developer and ASP (application service provider). Fourth Channel was a natural choice, as it partnered with Macola Software to write an interface between Macola Progression Series and the Web.
Limited IT labor and resources led Serengeti Eyewear to choose an ASP. "To handle this project in-house would have cost about $100,000 in the first year in equipment, software, and infrastructure improvements. That doesn't include additional development and administration labor," states Davison. "I won't spend that much in four years of
Reporting Package Crystallizes Information
Serengeti Eyewear's ERP system uses a Pervasive SQL database, and most of the company's reports are produced using Crystal Reports
from Seagate Software (Scotts Valley, CA). This reporting package allows Serengeti Eyewear to customize each report. Tailored reports, for example, are generated for sales, production, order status, and financials. "The Macola system generates more information than we actually need right now. Crystal Reports allows us to create summary reports that can be customized for a particular person," explains Davison. "Our president or executive team can look at these reports, easily understand the information, and make quick and informed decisions."
It is a far cry from two years ago. When those trucks arrived from Corning and unloaded their contents at Sarasota, there was little IT infrastructure in place. Now, the company is fine-tuning its enterprise-wide solution. "For a while, we were scrambling to fix what was broken at our company, in terms of business processes," states Davison. "Now, we are running pretty well. We can take the time to stand back and look at our entire enterprise. We can go after the projects that offer the biggest bang for our buck."
Questions about this article? E-mail the author at EdH@corrypub.com.