Material Yield System Meets Specialized Long-Standing Needs of the Plastics Industry

Even with the growing contribution of the Plastics Industry to the economy of the United States – and the world – relatively few major supply chain vendors have chosen to target this indus-try with industry-specific systems and/or modules. Rather than focusing on the special requirements of the plastics industry, the majority of ERP/supply chain vendors develop soft-ware that addresses the needs that plastics manu-facturers and distributors have in common with other industries.

Plastics suppliers must speed order fulfillment, enhance inventory visibility, further channel relationships, maintain operational flexibility and maximize profitability. Addition-ally, they need the ability to leverage business to business commerce. Plastics suppliers require a solid financial sys-tem, one that provides powerful financial and cost account-ing functionality with drill down capabilities.

Plastics suppliers need complete inventory visibility to meet fulfillment commitments and enhance customer satis- multiple locations, plastics industry planners can reschedule in the event of problems, sales people can determine product avail-ability and delivery expec-tations can be met.

Plastics suppliers have to move product along the supply chain and into the hands of the customer. They need insight into alternatives to select the most expedient methods. They must engage in proactive channel analysis, including sales analysis for marketing planning, demand analysis for replenishment planning and cost/revenue analy-sis for profitability, decision purposes on contracts, quotes and channel product mix.

Plastics suppliers need the ability to trace items back to their sources, track them from source to current location, arrange multiple drop shipments and identify all cost ele-ments associated with the movement of the products.

All aspects of channel relationship management, including Customer Relationship Management (CRM), Partner Re- lationship Management (PRM) and Vendor Relationship Management (VRM) are important. Contract management; demand replenishing; cross-reference labeling; and returned merchandise authorization (RMA) are all vital considerations.

Plastics suppliers may also require software for multisite operations, including multi-site engineering change management, multi-warehouse/multi-bin sourcing and costing, accurate landed costs for importers, purchase order options (sales orders, including blanket S/Os and releases), quoting and estimating and lot traceability. Additionally, they need the cost- and time-saving abilities to consolidate orders on one invoice or multiple deliveries on one order or across multiple orders.

Many plastics suppliers also want to leverage the advantages of the web with Internet buy and sell-side solutions. They look to web-enabled software to provide customers with access to information, order visibility, on-line self-services and greater communications: all integral to the critical concept of value-added fulfillment. At the same time, they want the ability to take advantage of fulfillment cost savings via trading exchanges for on-line RFQ bidding, Internet transmission of purchase orders and production schedules and electronic procurement using supplier catalogs.

Primarily, as with all suppliers, those involved in plastics seek to remain competitive in a dynamic marketplace. They therefore need tools that will enable them to level the playing field in the short-term and emerge as leading suppliers over the long run. This objective is the promise of ERP/Supply Chain software systems.

One major ERP/Supply Chain vendor, SYSPRO, is broadening its focus on the Plastics Industry. SYSPRO enterprise software is being successfully utilized by plastics manufacturers who employ processes such as injection molding and vacuum forming. SYSPRO has also expanded the applicability of its enterprise software. This new solution allows plastics suppliers to leverage all the advantages of a proven and integrated ERP/Supply Chain solution.

New System Meets Specialized Needs

The Problem:

In a large segment of the plastics industry, namely cut-shape suppliers, material is typically sold according to customer specific dimensional requirements. Rather than ordering standard size sheets, rods, tubes, etc., customers typically purchase custom sizes, requiring the suppliers to cut materials from existing inventory. These custom cuts typically result in remnants, which, depending on the type of material used, may have value. Good business dictates that remnants be valued and returned to inventory, so they can be considered for future order fulfillment. The re-stocking of remnants, however, imposes additional burdens on sales personnel who must calculate yields for the purposes of pricing and order fulfillment. These calculations, which must take into account the widths of the blades used the cutting process, can be extremely time consuming.

The Solution:

SYSPRO has augmented its enterprise software with a system that not only enables plastics suppliers to gain the full benefits of a total ERP/Supply Chain solution, but which also solves a long-standing problem for manufacturers and distributors involved in the production and cutting of plastic sheet, tube and rod.

“Custom” cutting typically creates remnants. Since suppliers cannot justify the time and effort necessary to measure, value and assign inventory numbers for the return of remnants to stock, many consider these remnants “waste.” Tri-Star Plastics Corp., estimated that the plastic scrap generated by the cutting process amounts to nearly 40% of the total produced. In fact, Tri-Star, was central to SYSPRO’s development of a solution to alleviate the nagging problem of time-consuming yield estimations and excessive scrap.

SYSPRO applied its software expertise to develop a solution — the Material Yield System (MYS.) MYS successfully eliminates nearly all of the waste due to scraps, reduces estimating time and enhances customer service by speeding the turnaround of custom cut orders. Equally as important, MYS supports the environment through the possible elimination and reclamation of material remnants. Perhaps more significant, the SYSPRO Material Yield System can be a major contributor to profits.

Custom cut orders require suppliers to determine how the cuts can best be made from standard size sheets, rods or tubes in order to maximize yields and minimize scraps. It can take many man-hours to gauge:

• If the order can be filled from existing inventory;
• If additional materials must be secured from another branch’s inventory, made or purchased in order to satisfy the order;
• How to make the required cuts to maximize yields;
• How to allow for blade widths.

The Material Yield System “automates” this process by making yield calculations from full sheets, rods or tubes and/or stock remnants and facilitating the return of scraps to inventory. The system automatically creates new part numbers and pricing for the scraps returned to stock. Further, the Material Yield System then attempts to fill custom orders from existing inventory, inventory at another branch, purchasing material, or a combination of each.

With the system’s ability to make yield calculations automatically, training time for new employees is minimized. Sales professionals no longer need to be involved with yield calculations; they are free to devote time to what they do best – sell. In fact, savings can be easily calculated based on the number of inside sales professionals, the average number of yield calculations done per day per sales person, the average time to calculate a yield and the average inside sales persons yearly salary.

Highlights of the Material Yield System Include:

Yield Calculation – when processing a quotation or a sales order for cut sheet, rod, or tube products, resulting yields are automatically calculated and displayed from existing inventory and inventory master items based upon customer-specific dimensional requirements. A cutting workflow is created if any cutting operations are required with blade widths taken into account in yield calculations. The sales person is in complete control of the actual items selected for order processing.

Inventory Part Creation – The system creates the inventory part. Each inventory part includes information pertinent to material type and dimensional characteristics.

Remnant Put Back – The last step in the cutting process is the remnant put back. This feature encompasses the issuing of raw material to the job, receipting the cut item and placing remnants back into stock, automatically creating new inventory codes and updating the cost of goods sold on that line item. Furthermore, remnants returned to stock can be put back at zero cost or have a value placed according to needs

Because the system integrates in real-time with other selected SYSPRO enterprise software modules, such as the Sales Orders, Purchase Orders, Inventory Control and Work in Progress modules, among others, all users work with the most current data.

The SYSPRO enterprise application provides the data capture and presentation requirements needed for efficient and effective enterprise and supply chain management. In fact, SYSPRO software enables suppliers to “customize” a system without resorting to changing code. The ability to call up specialized applications while operating within SYSPRO software gives management the flexibility to “customize” a solution to meet any unique requirements. Additionally, SYSPRO e.net solutions enable SYSPRO software to communicate with disparate systems along the entire supply chain, greatly enhancing efficiency.

The capabilities of SYSPRO software extend to both short and long production runs in manufacturing environments that characterize the plastics industry: make-to-order; make-to-stock; configure-to-order; assemble-to-order and engineer-to-order.

The SYSPRO enterprise solution is a fully integrated, modular enterprise system and the engine that drives an extended enterprise. SYSPRO software optimizes the abilities of single and multi-site manufacturers and distributors. It offers outstanding price/performance and balance of functionality. Application modules cover integrated financials, sales, purchasing, inventory, MRP/production, forecasting, distribution, Advanced Planning, Scheduling & Execution and CRM and enable a company to tailor a solution specific to its requirements.

For more information, contact Stan Goodrich, SYSPRO, 959 South Coast Drive, Costa Mesa, CA 92626, 714-437-1000, Fax: 714-437-1407, E-mail: stanley. goodrich@us.syspro.com , Web: www.syspro.com.