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ROI success story: Tractor vendor finds high-octane SCM solution

Anyone running SAP and shopping for a supply chain management solution might save money by reading this article.

Anyone running SAP and shopping for a supply chain management solution might save money by first spending time...

with Christopher Havey, national parts manager for Kubota Tractor Corp.

Kubota witnessed a return on investment (ROI) in less than six months, reached a near-perfect on-time delivery rate, and improved customer satisfaction with an SCM solution from its SAP partner, the Marlton, N.J.-based company Acsis Inc. Kubota implemented Acsis's DataPass, which supplies Kubota's SAP R/3 system with instant access to manufacturing and distribution information. Kubota employees are using wireless bar-code scanners to transmit inventory information into their ERP system.

With 1,200 dealers who sell tractor parts to 140,000 customers, Havey, who is based in Torrance, Calif., needed to automate Kubota's data warehouse, emigrating from the manual and paper process to one that could keep pace with the company's $1 billion annual sales figures and rapid growth.

"There are a couple of key capabilities we wanted that SAP could not offer," Havey said. "Additionally, we decided we wanted the ability to run the warehouse if SAP were ever to go down. That was one of our big, big desires."

Havey started his search the way analysts say SCM shoppers should, beginning with at least a handful of bids, asking companies for client referrals, and contacting and visiting those companies.

"Checking the references was invaluable," Havey said. "We visited Yamaha Motors, Toyota and Fujitso, and then we asked those clients for referrals."

It turns out that more than one client was dissatisfied with its vendor selection and had been waiting for someone to ask them about it. Havey recalled: "One of the direct referrals actually said to us: 'Don't do this.' So, we didn't."

After getting input from other companies, Havey chose Acsis.

Havey needed an SCM strategy to improve the error rate, and the speed, of Kubota's old, manual process.

"In today's age, people expect parts available next day," Havey said. "While promising next-day service, we were only hitting it 20% of the time."

In July of last year, Kubota went live with Acsis DataPass at one of its four district centers. At the same time, Havey recalled, Kubota was also upgrading its SAP system from 3.0 to 4.6.

"We were both, Kubota and Acsis, relatively inexperienced in the new environment," Havey said. "Suprisingly, the SAP upgrade went relatively smooth." Soon enough, though, the whole network simply shut down.

"The amount of data going between the SAP and the Acsis DataPass basically shut down the network," Havey explained. "Unfortunately, this gave a lot of people the impression that the bar-code system was crashing, when actually it was the network. The network, all the hardware, the connection that gets the information from the server, was overloaded."

Havey sounded exhausted just recalling that system crash. "I remember plugging in fiber optic cables myself,'' he said. The worst part? "It left a very bad impression of the bar-code system with upper management, and more importantly, with the front-line managers."

Once the problem was fixed, though, Havey's SCM show took a happy turn. "We were good, as long as we kept our connection to SAP clear."

The results? "We're giving real-time status reports for picking and packing processes," Havey said. "Our error rate has essentially gone to zero. We are, right now, pushing about 60 lines per hour. We're trying to get to 90. Same-day delivery has gone to well over 90%. We're very happy."

Recording 471% growth in sales since 1997, Acsis was recently named to Inc. magazine's list of fastest growing private companies.

This was last published in February 2003

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