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Product category: ERP and MRP systems and software
News Release from: Exel Computer Systems | Subject: EFACS business management system
Edited by the Manufacturingtalk Editorial Team on 14 November 2007

Business management system overhauled

Motor racing company has invested in a high performance business management system to replace an aging text based business information system.

The 56 employee strong Ilmor racing car special projects company, now turning over GBP 15 million, needed to invest in a high performance business management system Its choice was the EFACS system from Exel Computer Systems

* Challenges - as with any company designing and supplying world class, high performance products, quality and reliability are non-negotiable standards, said Exel.

It applies to every process and component involved in the finished product, which in the case of an IRL engine, extends to over 3000 parts.

The failure of even the simplest part can have disastrous effects on the entire engine and, in the hyper competitive environment of Indy Car Racing, on a driver and team's race and even championship.

The other non-negotiable aspect is availability of product.

Different components within an engine have different life expectancies and wear rates which means than a readily available source of spares is essential.

If a customer requires a component in order to race in two days time, they can't wait 3 days for it to be made.

Operations manager at Ilmor Engineering, Rupert Russell described the problems: "First you need to understand that we currently have over 85 IRL engines in existence each of which requires a complete component lifecycle history unique to that engine.

That's 3000 components in each engine.

Then you need to appreciate that within Ilmor Engineering we have two distinct yet interconnected areas - engineering and design, and manufacturing - each of which have their own challenges, not least of which occurs because each utilises the Bill of Materials (BOM) in a different way".

The key concerns of the engineering division can be summed up by the questions: 'What part is it?' and 'Is there one in stores?' Given the ongoing development that is an integral part of the business, the engineers are dealing with a continually changing BOM.

To complicate matters further, all BOM information has historically been held on the company's aging text based business information system.

A typical scenario, said Exel to manufacturingtalk.com, would be an engine builder disassembling an engine, identifying a part that needs replacing and then needing its replacement very quickly in order to reassemble the engine.

To achieve this, the engine builder needs to be able to accurately identify the part concerned and then communicate this to the stores where someone in turn has to interrogate stock levels to check availability.

As Russell commented, "Change is the nature of the beast - parts change rapidly which also necessitates complete visibility of what it is you're dealing with".

External events, some of which by definition cannot be easily predicted, also present considerable challenges to Ilmor.

An example of this was the change in regulations introduced in 2004 to reduce engine capacity from 3.5 litres to 3.

It meant the redesign of a considerable number of components and the creation of yet further part numbers.

However as Russell explained, this wasn't the complete picture.

"To add to the complications, the regulations came into force mid season to coincide with the Indy 500 race.

Not only did that mean that all of our redesigned engines would have their first 'real' race scenario in a hugely public environment, we had to gauge how many components would be required for the earlier part of the season for the old specification engines".

* Component traceability - a final engineering consideration is the element of retrospective component replacement, which again demonstrates the need for complete component traceability.

If a component unexpectedly fails it is imperative to discover if it is an isolated incident due to a particular combination of factors or whether it's a potential fault that could affect a particular batch or in the worst case scenario, every other identical component.

Depending on the outcome of what is discovered, all the affected components must then be identified and either replaced or modified accordingly.

* Rigorous stock control - Ilmor's manufacturing division's biggest challenge is supplying the demand from engineering.

In order to do this, manufacturing needs to maintain rigorous stock control by keeping on top of suppliers and subcontractors alike in addition to managing its own capacity requirements.

Exel told manufacturingtalk.com that this is compounded by the specialist nature of components, some of which can take 12-14 weeks to either order or manufacture, which presents what Russell describes as an extremely difficult 'balancing act'.

He explained: "On one hand it's unacceptable to not be able to supply a part when a customer requires it.

On the other hand, given the continual nature of change, we cannot over order a particular item because we would then be left with unacceptable high levels of stock which are essentially redundant and that we'd never be able to sell".

* Batching system - Ilmor also has in place a unique batching system, largely driven by the need to maintain complete product traceability.

Ilmor requires suppliers to use a unique supplying batch number physically incorporated within the component, which is different to actual final batch number used internally within the ERP system.

What the company has in common with other very high specification manufacturers is the need to maintain meticulous quality control involving a rigorous goods inspection regime and continual supplier relationship management.

Russell said, "Taken in isolation, it's a challenging business.

But because all of these issues are happening concurrently and interacting with one another, it's vital to keep on top of the bigger picture and see exactly what's going on.

At any given time there will be ongoing design necessitating the manufacture of new components".

* Meeting the challenges - given the sheer complexity of business, Ilmor has always relied on IT as an enabler to decision making.

The company used to use a text-based system called 'Command', which sat on an VMS platform.

Originally installed in the 1980s, this has been extensively customised to deal with the very particular demands made on it by Ilmor's business processes.

Russell said that one reason for the company's success is that it has gone to 'great lengths' to create what he described as a 'culture of information sharing'.

He explained: "Individuals are actively encouraged to take responsibility to be aware of their position in the information chain.

They need to be aware of who they need to share information with and to then do so".

Even with this culture in place, Ilmor was having increasing issues with its legacy system.

While the engineering users liked the speed of the text-based platform, the fact that it was not Windows based meant that it often required very specialist knowledge to get access to anything other than basic information.

Management reports were especially difficult, having essentially to be programmed into the system and then exported into a spreadsheet.

The accounting functionality was also weak with month end accounts taking weeks to compile.

There was no drill down facility or interrogation functionality meaning additional queries had to be continually re-entered into the system in order to get the precise information required - all of which was very time consuming.

* Why Exel's EFACS was chosen - the decision by Mercedes Benz to buy Ilmor had initially looked to set Ilmor on an SAP implementation route as Mercedes was already using SAP, along with many of its subsidiary companies.

However, when Ilmor Engineering was created in 2005 this provided a period of reflection, during which it was decided that SAP was too much of a 'heavyweight system' and one which didn't actually do various elements of what Ilmor Engineering required.

Ilmor's extensive customising of the old Command system had already given it a very good insight into what it required from a business system.

The company quickly identified three solutions, which claimed to handle the complex manufacturing requirements had as well as providing solid accounting functionality.

However, as Russell explained, on closer inspection only EFACS measured up to what was required.

"We looked at Sage but on inspection it simply couldn't deal with our manufacturing needs.

Another candidate had very strong manufacturing capabilities but required Sage to be bolted on in order to deliver any real accounting strength.

As we wanted a completely integrated system from one supplier, this wasn't acceptable".

It would be wrong to assume that EFACS was chosen by default.

As Russell noted, "We'd already spoken to another high performance engine manufacturer using EFACS and they were very positive about the solution.

From the moment I first saw EFACS in operation I liked the fact that the left hand column was full of terms and labels that actually meant something.

It was immediately clear that the system was designed to be very meaningful and you could do a lot with it without being a superhero.

That it was also customisable only helped what ultimately was a very straight forward decision to invest in EFACS".

* Implementation - while the decision to implement EFACS was taken in 2005, said Exel to manufacturingtalk.com, two factors significantly impacted the implementation timetable - pushing back the final 'go live' until May 2007.

The first of these was the major change in engine spares demand for 2006 due to the IRL becoming a one make series, which pushed things back to 2006.

Having just become an independent company from Mercedes Benz, the company began the implementation only to find it was having to relocate to elsewhere on the Mercedes Benz site.

This did however give Ilmor Engineering the positive opportunity to put in a completely new IT infrastructure on which to install EFACS.

"We finally picked up EFACS in October 2006," said Russell.

"But we soon realised our plans for a Christmas 'go-live' were very optimistic.

Specifically, we needed to do some customising work on EFACS in order for it to be able to handle our unique batch numbering requirements.

We also needed some work done in order to provide instant part ordering from within the BOM screens for our engine builders.

While this was happening, we were also modelling all of our existing processes onto EFACS but this was all by personnel within the company which also had their usual jobs to do as well." As Ilmor was close to getting its data transfer from Command finalised into a useable format, Exel consultants were on-site to assist with the final stages.

Given the need to get it right first time, Ilmor had several dry runs before finally going live, successfully in May 2007".

As Russell said, "It was by and large very smooth - the main thing is that the company kept going and was able to continue doing what it did with no major interruptions.

Our people are generally PC literate and most people's interaction with the system is very straight forward and only aided by the intuitive nature of EFACS".

* Benefits and future plans - although only live for a couple of months, the first significant benefit was felt in the first month within the accounts division of the company.

For the first time, the accountant could set up a system with the codes that he actually wanted and that made sense to the company.

The balance sheet was completely accurate and unlike the previous system with its two week wait for vital financial management information, this was now available instantaneously and showed real-time visibility of the financial position of the company.

Perhaps more significantly is that the new levels of data and insight were believed from the outset.

The company has already implemented Shop Floor Data Capture (SFDC) via bar code readers that automatically update EFACS with each completed process step.

The next main area of development is to put to use the full power of EFACS' built-in planning and scheduling functionality to give much more accurate visibility and utilisation of the company's machining capacity.

Russell was under no illusions that there is much, much more to come from EFACS, which is why he concluded: "We're know that we're only just beginning to scratch the surface of what EFACS can do for us".

* About Ilmor - the Ilmor company was founded in 1984 by Mario Illien, Paul Morgan and Roger Penske and quickly became successful in Indy racing before progressing to Formula One winning the world championships with McLaren in 1998 and 1999.

Through the late 1990s, a separate arm of the business was grown - the Special Projects Group (SPG).

This group, in partnership with Honda Performance Racing in California, USA, would go on to develop an engine, which dominated the '04 and '05 seasons of IRL racing.

The development led to the competition 'bowing out' and the IRL becoming a 'one make' series in subsequent years.

In late 2002 Mercedes-Benz began a phased buyout of Ilmor, but when this began to impact on the opportunities for Special Projects, Illien and Penske bought the SPG business in 2005, leading to the creation of Ilmor Engineering.

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