MRP For Vortok International

Vortok International, based in Plymouth, Devon, manufacture a range of railway infrastructure maintenance and safety products. With a staff of 29 and a projected turnover in 2014 of over £9m, the company holds both ISO9001 and ISO14001 quality accreditations. They previously relied on their accounts software along with a series of fragmented Excel spreadsheets and Access databases across different departments, which caused a number of problems. Said Chris Duffy, Operations Improvement Engineer; “The engineering team were not able to see the impact that design changes would have on the supply chain, such as existing stock batches, open purchase orders and contracts, etc. The old system did not have the ability for more than one purchase price, so we couldn’t store quantity breaks. There was no quality functionality, so collating statistical data was a very labourious process.” Austen Thomas, Production Manager added; “Works Orders were often verbal in the past. We’d want so many of a component and just ask production to make it.”

Selected out of 18 systems

The company decided in 2012 that they needed an ERP system and set about writing a specification of requirements. The initial aim was to resolve the immediate problems, such as stock control and traceability, with a long term goal of adding functionality such as batch control and shopfloor data capture. They also focussed on improving their knowledge of ERP to ensure they selected the right solution for their business. Said Chris; “It’s one thing to select a system but another to actually understand what you’re getting.” They initially reviewed 18 systems, gradually removing vendors that did not deliver required functions such as quality control. In tandem with this Vortok set about changing various existing procedures with the aim of building robust, ready for use processes in the selected ERP system, as there were concerns that staff might be resistant to change. Commented Chris; “You can change too many things too quickly. We wanted to get the foundations right by getting good data. To inflict a lot of change on staff in one go was not an option.”

The systems reviewed cost up to around £39,000, required training costing up to £46,000 (with one requiring 50 days of training), and annual maintenance of over £11,000. As standard 123insight is available on a low monthly subscription, with no lengthy contract. The system requires just 6 days of ‘no-obligation’ training, which users attend on the understanding that if they choose not to select 123insight they can walk away with nothing to pay. Although Vortok also included their current provider in the review process Chris was not overly impressed with the newer release; “In all honesty we didn’t like the existing software but we did give them an equal opportunity. Ultimately the latest version was not that great. None of it was relevant to us - it was all for accounts and nothing for production. However, with 123insight it was refreshing to be able to ask a question and for them to actually show it in action, instead of just saying ‘yes it can do that’.”

'No-Obligation' training

Vortok selected 123insight in May 2013 and continued creating new processes and reports which were to be replicated in 123insight. They attended the six days of training,  which Chris found very useful; “As a result of attending the training course , we not only learned how to use the software, but we also learnt about best practices and were able to speak to other people that were implementing the system to understand how they were going to do it. With the fantastic support we got from 123insight we were able to do it ourselves. On a personal level there’s a lot of satisfaction that comes from that, and there’s less reliance on expensive consultants.” The training prompted several enhancements to existing processes, including a restructuring of part numbers. Chris explained; “The beauty of 123insight is that we can change the part number structure in the future, which gave us the security to try new structures which we could revert if they did not work. We really struggled with the old system, as if a drawing changed we had to create a new part and therefore lost all of our history.”

Other staff also learnt the system quickly. Vortok took advantage of 123insight’s configurable security, ensuring that staff could only access what they needed to. Said Chris; “There are some people that use parts of the system that they have not even been trained on, but often they’ll show us information and I’ll think ‘wow, I’ve not even shown you how to do that’. The feedback we get from all users is that it’s very intuitive.”

'Eerily quiet' go-live

Once Vortok were happy with their new processes they planned to go live in October 2013. Austen and Chris spent the weekend transferring live stock, sales and purchase orders, with 123insight going live across the company on 2nd October. Chris expected more problems, but recalled; “It was eerily quiet.”

Immediately the company noticed significant benefits. Stockholding reduced dramatically, despite the output nearly doubling, saving over £200,000 literally within two months. Noted Austen; “Previously we had no logical way of working out what we needed to buy as we couldn’t see what the future demand was. With the minimum order quantities in place and the ability to use quantity price breaks we can order more or less to either take advantage on price or hold less stock.”

Massive reduction in lead times

A knock-on effect was that they were also able to massively reduce lead-times. More stock was held for faster moving lines, and the overall space reduction allowed for better use of manufacturing resources. Overseas sales saw an increase due to consignment stock in certain regions such as Australasia, where shipping accounts for between 6 weeks to 3 months of a product’s lead time. Held directly at the customer locations, stock can be called off immediately when required, then invoiced and replenished. Planned versus actual manufacturing time can be analysed to identify where further savings can be made through better manufacturing methods.

Numerous other benefits filtered through, delivering improvements to regularly performed tasks. For example, works orders now include the exact locations of parts to be picked, so locating stock takes much less time than before and is more accurate. A part can now have multiple routings e.g. manufactured or bought in, allowing Vortok to instantly cost for different scenarios and make decisions that previously would have taken time and often proved inaccurate. Noted Chris; “The structures screen is brilliant because we have been able to define the structure for a given component or assembly and compare the cost and lead-time of that method to purchasing it as the finished article. As a result of this exercise there are a number of parts that we now buy in complete instead of organising the manufacture ourselves.”

ERP integration with other systems using SDK

One key requirement was that any ERP system  had to integrate with existing and future systems. Vortok also use 123insight’s CRM+ and SDK (Software Development Kit) options. CRM+ is used to assist with the company’s quality management, which Chris cites as being extremely useful; “The main benefit we’re seeing is the internal workflows, so that any actions that need to be done can be instigated and managed through 123insight.” SDK is currently used to drive 123insight’s stores management functionality, allowing staff to use low cost tablets to find, pick or check stock items. In the future Vortok will use SDK to integrate to their CAD and PDM systems, so that BOMs can be created automatically.

ERP integration with Pegasus Opera accounts

The company upgraded their Pegasus Opera accounts system, with which 123insight communicates via the Advanced Accounts Interface. They have also linked to Microsoft SharePoint for document management, ensuring that the correct revisions of drawings are associated with parts when creating purchase or works orders. Commented Chris; “We had a vision from the start to have one core system, and any other systems had to work with it. We wanted to keep SharePoint and have 123insight pass information to and from it. There’s a lot of staff that use 123insight remotely, such as accounts and sales. Also, having the ability to view a part in 123insight and with a couple of clicks bring up drawings of the part is absolutely fantastic, and that’s something that still blows away new users of the system.”

Previously, items could easily get forgotten such as a preferred courier method or documentation requirement. Now, pop-up text warnings can be associated with a process, such as raising a sales, purchase or works order, or booking an item from one location to another. Said Chris; “Some customers have very specific requirements when it comes to documentation such as Order Acknowledgements, so having popup text to remind people of these requirements is very useful.”
Quality audits saw major improvements. Said Chris; “If you talk to the Quality Manager he’d tell you that the system’s paid for itself already because the audits are now seamless, so much so that the auditors themselves have been very impressed with the system.” Austen added; “It’s actually paid for itself with the stock reduction alone. Within a couple of months the stock was down and it’s stayed down, so the money’s available for us to invest elsewhere.”

Visibility across all departments

Visibility and accessibility of data across all departments saw massive improvements, with Chris noting the ability to move around the system at speed; “You can start in one area, go off on a tangent and end back where you were. The drill-down facility is fantastic”. Austen agreed; “You can create a BOM from scratch where no parts exist in the system. From that part in the BOM you can go straight to the part creation screen and return immediately to the BOM. It’s similar with stock interrogation e.g. if you want to find out which transaction it came in on or a delivery note. The transparency is brilliant.”

Vortok has a second location one mile away from their main facility, connected via ISDN. Staff there connect to 123insight via remote desktop, which Chris cited as being fast enough despite the relatively low transfer speeds. This has given him confidence with a forthcoming expansion; “Later this year we plan to have a sales outlet in the US with a view to manufacturing there next year. Our servers will be the hub and they will use 123insight over remote desktop. The system is great in terms of its flexibility and scalability - it takes us where we want to go.”

123insight sets a high bar for support

Vortok has support contracts with many software vendors, and had become accustomed to a certain level of support, however since going live with 123insight their opinion of other vendors has changed. Said Chris; “Previously it was accepted that a supplier would get back to us the next day. With 123insight, when we call we have an answer there and then nine times out of ten, and if not we have an email within the hour. Now, when we have to use other support providers we just get increasingly annoyed. 123insight has set the bar, and not many other vendors meet it.”

Turnover has increased significantly, despite the company employing just 29 staff. Richard Robertson, MD concluded; “Vortok is committed to a year on year growth figure of at least 5%, although in 2014 turnover will grow by approximately 20% to over £9m. This growth could not have been accommodated by our old manual system. 123insight has been instrumental in the company’s startling growth during 2014, ensuring that all departments meet the new much heavier demand upon resources. It will be key to our further US expansion and management of it.”