Case Study: Customer Success: Supplier Absorbs Up To 40% Additional Business Without Raising Headcount

IMMI Poised to Absorb up to 40% Additional Business without Raising Headcount

"Oracle is on the leading edge of business system development, and it has top-notch people who understand our industry. With Oracle E-Business Suite, our internal processes have the potential to improve so we can absorb up to 40% more business without increasing our office headcount."
-- Randy Norman, Director of Information Services, IMMI

A Catalyst for Continual Cost Reduction
IMMI has been making the world a safer place for more than 40 years. Formerly known as Indiana Mills & Manufacturing, Inc., a company that began by producing 80 seat belts a day, IMMI is now a world leader in commercial vehicle safety technology and dominates market share for child/infant safety restraint components. Never resting on its laurels, the company continually raises the bar for higher safety standards. It built one of the only facilities in the world designed specifically for crash testing commercial vehicles. Among IMMI's recent products are school bus seats with integrated lap and shoulder belts, a rollover occupant protection system for heavy trucks, and cargo tie-downs for the power sport industry. In a marketplace where suppliers must continually drive down costs to stay competitive, IMMI needed to overhaul its technology and business processes in the late 1990s. Its manufacturing resource planning (MRP) system was no longer supported by the original vendor, so IMMI took the opportunity to replace it with an enterprise resource management (ERP) solution that would update its previous business processes and support the company's growth strategy.

In 2000--seeking a complete, competitively priced solution that would accelerate cost reduction--IMMI selected Oracle E-Business Suite. "When we chose Oracle, we saw it as the catalyst to lower costs by improving our design-to-market, order-to-ship, invoice, receiving, and internal manufacturing processes," said Randy Norman, director of information services for IMMI.

High-Level Project Goals

• Lower costs
• Eliminate redundant processes
• Consolidate data
• Ensure continued support and development to protect software investment

Why Oracle?
IMMI evaluated several software products before narrowing it down to Oracle, Cincom, and American Software. All were contenders because of their flow capabilities. "Oracle stood out from the rest by demonstrating a commitment to the ongoing support and development of flow manufacturing and improved business processes," Norman said. "Nothing matched the breadth of functionality and technology of the Oracle system. And since our previous vendor had discontinued its product, it mattered that Oracle was going to be around a long time."

Trims 20 Hours a Week with Assembly-to-Order The transition to an Oracle system involved huge changes for IMMI, including moving from IBM AS/400 to Sun Solaris, from green screens to graphical user interface (GUI), and from a closed manufacturing resource planning (MRP) system to a very open enterprise resource planning (ERP) system. The changes proved beneficial however, and within a year, IMMI completed the transition and saw measurable improvements in planning.

The whole planning process has been compressed--from processing customers' electronic planning and shipping schedules, to translating them into flow schedules that ensure manufacturing corresponds to each day's customer orders. IMMI is using the time gained to give its customers better service.

Norman credits Oracle E-Business Suite's integrated applications, which access a single source of data, for streamlining IMMI's processes. When one application makes a change, every other application is notified and takes action. IMMI's use of Oracle Release Management, which processes electronic planning and shipping schedules from customers, demonstrates these benefits. "Previously, it took a lot of custom programming to process requests for changes in the order fulfillment processes," Norman said. "But with Oracle's efficiency, we have been able to absorb new customer requests, such as moving from weekly to daily shipping schedules, without increasing staff."

Norman estimates that the combination of Oracle Release Management with Oracle Manufacturing's Assembly-to-Order (ATO) processes saves the Planning Department 20 hours a week. "We handle spot business more efficiently and respond to last-minute changes more quickly and accurately," he said.

A Boon to Lean Manufacturing--WIP Reduced from Two Weeks to Four Hours
Prior to implementing Oracle E-Business Suite, IMMI was migrating to lean manufacturing using Excel spreadsheets. The company made some progress, but managing all the supporting data was cumbersome. Moving to Oracle Flow Manufacturing allowed IMMI to move additional departments to lean manufacturing without having to increase its staff of manufacturing engineers.

Getting rid of unreconciled data has also been a boon to the flow manufacturing process, bringing IMMI closer to its goal of producing only what is needed. Also, Oracle's agile manufacturing solutions make it easier to recognize production bottlenecks and more accurately meet demands. Norman gauges that improved flow has already reduced work-in-progress (WIP) from two weeks to four hours.

Applications Development Backlog Vanishes
With Oracle's out-of-the-box functionality, IMMI's IT staff is able to focus on projects that support new corporate strategies and business processes instead of working on applications that compensate for functionality gaps. "This is the first time that we don't have a large backlog of new development projects," Norman said. "Instead, departments are clamoring to deploy existing Oracle E-Business Suite functionality. Some have been able to initiate their own deployments. For example, human resources took the initiative to train four representatives from their staff using Oracle University to rollout Oracle Human Resources Management [a component of Oracle E-Business Suite]. Their training accelerated the project plan for deployment. Oracle University is an excellent resource for getting our staff up to speed."

After the original implementation, Oracle Consulting helped IMMI fine-tune the applications to improve processes. IMMI also uses Oracle Support and MetaLink, Oracle's Web support service system. "We are able to research issues through MetaLink and resolve them ourselves," Norman said. "This is an extremely powerful self-service tool that helps resolve issues."

IMMI also employs Oracle Discoverer, an intuitive ad-hoc query, reporting, analysis, and Web-publishing tool. "We use Discoverer for ad hoc queries, analysis, and prewritten reports. It saves our business staff five to six hours a month by not having to reconcile mismatched data from different sources. This gives them more time to focus on the business."

Future Plans
IMMI looks forward to more cost reductions as it continues to rollout Oracle E-Business Suite modules. Plans call for deploying Flow Manufacturing into other divisions for more timesavings. Self-service applications, such as iProcurement, will automate processes to improve the company's responsiveness and accuracy for procurement while reducing paperwork. And with Oracle iSupplier Portal, IMMI will be able to improve communication with suppliers. "We feel we've hitched our wagon to the right horse," Norman said. "Oracle has top-notch people who understand our industry, and it is on the leading edge of business system development. With Oracle E-Business Suite, we hope to improve our internal processes enough to absorb up to 40% more business--without increasing our office headcount."