Manufacturer untethers its ERP by returning RF to distribution centers.
Say youve spent millions of dollars and four years deploying and upgrading an ERP system, only to emerge from the trenches to find out that the rest of the world has moved on to wireless technologies. What do you do?
If youre Chuck Hennon, CIO at The Lamson & Sessions Co., you start developing a way to access SAP AGs SAP R/3 via handheld devices and automating your processes. After working with an outsourcer to develop a customized way to wirelessly enable SAP 3.1 without the use of expensive middleware, the Cleveland-based electrical manufacturer and distributor today has access to receiving, shipment and order fulfillment information via handheld devices. This has led not only to a 100 percent improvement in shipment times but also to increased accuracy.
A few years ago, the words "SAP" and "wireless" together would have made more than a few CIOs scoff. After all, the arduous task of deploying enterprise resource planning was daunting enough, never mind the prospect of adding applications on top of it. But now, many manufacturers, such as Lamson, are looking for ways to improve productivity and streamline distribution center processes by arming factory floor employees with mobile devices that provide real-time access to ERP systems.
And as wireless technologies continue to gain a foothold within enterprises, experts say increased competition means few organizations can afford to put off developing a wireless strategy for mission-critical enterprise applications.
"So much of your business depends on your ability to speed up the flow of information," said Michael Burkett, an analyst with AMR Research Inc., a consultancy in Boston. "There are many advantages to making SAP more interoperable, and two key ones are certainly increased accuracy and [improved] time to delivery."
Indeed, a number of businesses are realizing the benefits of wirelessly enabling business applications. In fact, consultancy Gartner Inc., in Stamford, Conn., estimates that by 2004, 65 percent of Global 2000 companies will offer workers wireless access to critical business applications.
Lamson was already an old hand at the wireless game. The company actually scrapped successful RF (radio frequency) implementations in its two distribution centers when it deployed R/3 3.1c in 1997 because the ERP software at that time did not support wireless capabilities.
Unfortunately, dumping RF back then meant it took two days for the company to pick and ship an order after it was dropped off at a distribution center. Because employees used pencil and paper to record an order and then keyed that information in at a data entry station within the distribution centers, the company was also seeing a significant amount of errors and inaccurate shipments, Hennon said.
So after the company upgraded to R/3 Version 3.1h in 1999, Hennon asked his IT staff to do a return-on- investment study for bringing RF back into the distribution centers. The results were a thumbs-up for RF, showing that it would allow Lamson to reduce its order fulfillment cycle to one day. Andbecause information would be entered directly from a handheld into the ERP systemit would mean greater accuracy as well.
Around the same time, SAP released SAPConsole, a tool kit that bar-code- enables any part of SAPs enterprise software and allows any function within SAP to be translated from its graphical interface to a text or character interface, which is required by handheld devices. But there was a snag: SAPConsole supported only Version 4.6. Hennon was reluctant to use middleware to bridge the gap between SAPConsole and R/3 Version 3.1h, which not only would have been expensive but also would have required him to maintain a separate non-SAP database, since SAPConsole wont interface directly with older versions of SAP databases.
Along with outsourcer Catalyst Consulting Services Inc., Lamson developed customized applications that enable Symbol Technologies Inc. handheld devices to communicate with the SAP 3.1 applications using SAPConsole. Using the Symbol devices, employees can scan products after they are picked and immediately alert the system when an order is ready to be shipped. The handhelds communicate with the SAP system over a Symbol Spectrum24 wireless network.
The development and implementation of wireless data collection capabilities cost Lamson between $750,000 and $1 million, said Hennon, who declined to give specifics. That number includes the purchase of hardware.
The company chose to deploy each application one by one, ensuring that cycle counting transactions were successful before moving on to ordering transactions and finally to picking transactions. It took nearly eight months to develop and deploy the wireless solution, which went live in both distribution centers in March.
Lamson wasnt able to reap the benefits from its wireless deployment immediately, though. Three months after RF went live, shipment accuracy actually dropped. Rob Hartford, manager of process improvement at Lamson, chalks this up to a steep learning curve, along with political and training issues. "Were probably back to the point where we were when we discontinued the manual process, but our awareness was certainly heightened," Hartford said. "We have been gathering and collecting better data and, as a result, we are now seeing significant improvements in accuracy."
One area where the company was immediately successful was in order cycle times. The companys most recent statistics show it is able to pick and ship an order in a little less than one daya process that used to take two or more days.
While Lamson has wrapped up this particular project for now, it hasnt stopped its work with SAP. Hennon said the company will begin an upgrade to R/3 Version 4.6 by the second quarter of next year. "When it comes down to it, your business relies on your ability to fulfill customer requests," Hennon said. "We wouldnt be where we are today if we rested on our laurels."