Empowering Fenner Conveyor Belting With a 360 Degree View

Empowering Fenner Conveyor Belting With a 360 Degree View

“The Epicor ERP system has become such a vital part of Fenner’s business that it’s difficult to imagine how we operated in the past. There’s a partnership and the operating model as it stands now plus the support from a fully-fledged ERP system can only lead to long-term growth in terms of efficiencies, product enhancement, and zero stoppages in work. It has really created an environment for us where the whole company is efficient.” – Financial Director, Chris Bekker

 

Fenner Conveyor Belting

Fenner Conveyer Belting is the world’s market leader in conveyer belting, producing a premium range of products including steel cord and solid woven conveyor belting, primarily used in the iron ore and coal mining industries. The Fenner brand globally is associated with premium products, and the South African company services some of the largest blue-chip customers in the country, such as Anglo American and Sasol.

Despite Fenner’s significant contracts and global presence, the South African operation remains a fairly small, tight-knit team in which all staff – including directors – are hands-on across many facets of the business.

Financial Director, Chris Bekker, says his role cuts across finance, operations, marketing and sales. “I don’t just do number crunching; I’m involved in all aspects of the business in conjunction with the managing director.”

 

A lack of integration and visibility was slowing Fenner down

This means Bekker was intimately aware of the major challenges in costing products, tracking inventory and carrying out inventory evaluations. “Before, it was all done manually, although we were on an ERP package. But the ERP package only worked in rands and cents – there were no units. Everything was driven by major spreadsheets and brought in with journals. It was segregated. We had five platforms the company was operating on, and no platform was linked to another. It was basically bringing in transactions via the journals into the ERP system.”

According to Bekker, pricing out to the market was a challenge because Fenner was unable to easily break down products to sub-levels in its existing ERP setup. “ERP is critical in procurement. People don’t just place orders – there’s a hierarchy in terms of PO approval.”

 

Epicor’s solution provided a complete view

“The implementation of the Epicor system took a little longer than we initially envisaged, but the outcome was successful and most importantly we now have proper segregation of duties. Vijay Mohanlal, the Managing Director, and I know exactly what is being ordered at any given time, what is still to come and what is outstanding. From a procurement point of view, this has assisted the company greatly in reducing our working capital, as well as managing stock. You know exactly what’s in work in process, I can see my finished goods and I’ve got a clear handle on raw materials,” Bekker says.

Since Epicor has been in place, Fenner now has a fully integrated system with traceability and visibility, says Bekker. “There’s one source of truth. Now, in the coming year we will be adding a product line and leveraging our fully-fledged integrated Epicor ERP system. Epicor has become this company’s backbone: everything that we do is system driven. There are no more manual spreadsheets and transactions happening outside of the system. Whatever we do, it happens on Epicor.

“If I want to drill down in transactions, I can see exactly what happened in a transaction. I don’t have to fight spreadsheets trying to trace a transaction.”

Bekker says this has reduced Fenner’s reaction time significantly, since there are no time lags in obtaining the correct information. “I can pull data and make business decisions far more quickly, with more accuracy than we could rely on in the past. It has improved operational efficiencies – there is no black hole where things sit anymore and searching for an item does not have to be a manual process.”

A further benefit is that the Epicor ERP system has increased visibility of tasks and productivity. “This has had a huge educational effect on everyone in the business, even on the shop floor. If someone is not doing what they are supposed to be doing, it becomes visible. It has created a culture in the business where nobody wants to be found out. Then, as far as flexibility is concerned, we can change production runs far easier and quicker than we could before.”


Better decisions, faster decisions


Fenner’s costs in inventory management have fallen, and the company has improved its working capital position substantially due to having a better grip on procurement and inventory consumption.


The most prominent reward for having implemented the Epicor solution, says Bekker, is being able to react quickly, whether to market conditions with adjustments in pricing, or to errors in production.


“Having business data that is sanitised and true, there is no doubt behind the numbers, and it has taken out the human error factor. In a transaction, especially in manufacturing, the bills of materials are set up so any given belt can only consume x amount of raw material because there’s a standard. As soon as we pick up these variances, correcting those errors is now done on an as-and-when-required basis, and not when the product is finished. You realise that the product is over or under-engineered. Those corrective actions can be done in time.”
This has improved Fenner’s ability to take corrective action, making sure every manufactured product is fit for purpose and up to the global brand’s exacting standards. Every raw material can be tracked throughout the system in terms of its consumption.


“It has taken doubt out of the business. We can defend our figures, we can defend our manufacturing processes, everything is clear and defined, there are no grey areas and there is one source of truth. Before Epicor, running on five different operating models, there were no linkages and it created a lot of issues in the business. Someone would raise a PO and forget to approve it, then there would be shortages of raw materials and the factory would come to a standstill. The business continuity, linking all the chains of the business together, has vastly improved,” Bekker says.


“The Epicor ERP system has become such a vital part of Fenner’s business that it’s difficult to imagine how we operated in the past. There’s a partnership and the operating model as it stands now plus the support from a fully-fledged ERP system can only lead to long-term growth in terms of efficiencies, product enhancement, and zero stoppages in work. It has really created an environment for us where the whole company is efficient,” he says.

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Custom ERP is dead

custom-erp-is-dead

– also featured on IT Online and Digital Street – 

 

Custom Enterprise Resource Planning (ERP) is dead, says epic ERP strategy director, Dr Daneel van Eck.

 

When it comes to ERP there has long been debate around whether to custom build or buy a Commercial Off The Shelf (COTS) system. While it did make sense to custom develop an ERP in the past, in most instances that is no longer the case, insists Van Eck. In the past COTS ERP software was often expensive and difficult to customise, and if you had a unique requirement it made sense to custom develop.

 

His background includes close to three decades of commercial software development and experience in designing and maintaining custom ERP systems. With one foot in COTS and the other in software development, he has strong opinions on when each are applicable.

 

“A COTS ERP will often have at least 20 000 customers paying either subscription fees or annual maintenance fees and this income can provide funding for more than hundreds or even thousands of developers continuously improving the software,” says Van Eck. “There is no way that an internal (or outsourced) team of even 10 or 20 developers focused on enhancing a custom system could compete or even keep up, considering the budget for innovation that a COTS system will have available. This doesn’t even take into account cloud enablement, adoption of IoT, and architectural and platform changes released from large players like Microsoft.”

 

The problem, he says, is that a small custom team can’t easily innovate or achieve the breadth of functionality that a COTS system can achieve. “Typically you’ll find a custom team continually trying to prioritise with an ever extending list of requests and features that often get shelved,” he explains. “And the long-term costs of maintaining a custom ERP can be prohibitively expensive, even while the custom solution is falling further behind over time. The reality is that the business environment changes and with it a company’s needs. This means that the ERP system has to be continually adapted. The result is that it’s very hard to meet the business’ objectives and achieve long term value.”

 

Modern COTS ERP systems utilise best practice technologies to provide significant breadth and a myriad of options around functionality which can be switched on when they are required, he points out.

 

“When you need additional functionality you just purchase the additional module. The functionality is immediately available making a modern COTS system surprisingly agile. A customised system, on the other hand, typically requires significant time, and budget, to design, develop, and test that additional functionality. An example would be where a product-focused company moves into providing services and finds that their custom software needs to be extended to support project management, resource management, and services billing. Turning on this functionality on a modern ERP and then configuring the modules will enable the company to rapidly change to support the business model change, where the development could take at least six months just to get the basics in place.”

 

Based on years of conducting ERP evaluations, facilitating selection processes, and shortlisting some key vendors such as Microsoft, Epicor, and Sage, Van Eck maintains that a key differentiator among them is the true cost of ownership over time.

 

“A truly modern ERP solution shouldn’t require expensive ERP consultants on site for the long term,” he says. “Companies should be empowered to take ownership of their ERP and they should be able to easily adjust processes and create new ones by dragging and dropping components – keeping abreast of changing needs, in most cases without requiring custom development.”

 

However, he concedes that there are times when a COTS solution won’t be viable. Obviously when there is no commercially available solution then one has to be developed. In addition, if a monopoly exists it may be more cost-effective to build since the lack of competition could protect inflated pricing. There may also be times when it could be possible to obtain a competitive advantage by developing a unique solution.

 

While ERP systems may be seen as a grudge purchase, implemented correctly, modern ERP systems will provide a strategic advantage and provide real value by keeping businesses agile and allowing for faster decision making, says Van Eck. “The competitive advantage it allows depends on how you configure it to enable your unique processes and how it enables you to proactively make more informed decisions.”

 

Build-or-buy is still not a simple choice and certainly needs significant thought, however with modern, configurable COTS ERP’s in existence it certainly tips the scales in that direction.