Info competitiveness boosted by Microsoft Dynamics AX
Foshan Hiwor stands out from the auto supply chain system
“Logistics used to be faster than information flow,” says Manager Chang Shuan-Ruei of Foshan Hiwor, a Chinese auto accessory supplier, “so that very often our clients still pressed us on the delivery even when the supplies were already on their way. Nowadays information circulates faster than logistics. We can update clients on production and supplies, in order for them to adjust production plans in real-time. In the OEM industry the margin is very narrow, and profitability completely depends on the ability to enhance productivity. Microsoft Dynamics AX enables us to stay focused on improving production skills, quality and efficiency.”
In the era of knowledge economy, even tangible products can derive added value and unique competitiveness with the aid of technology. Foshan Hiwor completed plant construction and at the same time introduced an ERP (enterprise resource planning) system. Since then the company experienced exponential growth in efficiency and the benefits of pursuing information accuracy, while also earning trust and respect from clients.
“Logistics used to be faster than information flow,” says Manager Chang Shuan-Ruei of Foshan Hiwor, a Chinese auto accessory supplier, “so that very often our clients still pressed us on the delivery even when the supplies were already on their way. Nowadays information circulates faster than logistics. We can update clients on production and supplies, in order for them to adjust production plans in real-time. In the OEM industry the margin is very narrow, and profitability completely depends on the ability to enhance productivity. Microsoft Dynamics AX enables us to stay focused on improving production skills, quality and efficiency.”
Effortless support for industry-specific needs and future planning
Founded in 1986, Mingji is a professional manufacturer of motorcycle exhaust pipe and a big OEM plant for auto components. Its subsidiary Foshan Hiwor is dedicated to the auto accessory market of Mainland China, with client line-up including Tier 1 suppliers such as Faurecia and Engley
In 2010, Mingji replaced its locally-designed procurement-sales-inventory software with Microsoft Dynamics NAV, while Foshan Hiwor which started plant construction in 2012, adopted Microsoft Dynamics AX. With the plant going into mass production in October 2013, Foshan Hiwor brought its ERP system online as early as in June and since then has started using the system to support small-batch trial operations.
Chang explains that a company waiting until reaching a significant operation scale before introducing an ERP system will definitely suffer from higher costs. A company in full operation must focus on yield rate, quality and production efficiency, and should not waste extra capacity on the information system.
When Mingji introduced Microsoft Dynamics NAV, the main considerations are on the brand, functions and working partners. On a different approach, Foshan Hiwor opted for Microsoft Dynamics AX 2012 R2 by upgrading its existing system for the comprehensive business modules and industry solutions. Even Mingji has planned to upgrade the ERP system currently used in its motorcycle chassis plant to Microsoft Dynamics AX in 2014.
Chang says, “Despite their sizes, many small-medium sized enterprises in Taiwan own comprehensive systems. However, industrial software for material planning, MRP (manufacturing resource planning) and APS (advanced planning & scheduling system) are not affordable for SMEs. Thankfully Microsoft Dynamics AX has all the above-mentioned functions built into the system, greatly reducing funding pressure, while additional functions are also in place to meet our future needs, such as online sales with self-owned brands
Giant leap: from 12 man-day to 10 minutes
The largest issue with Mingji’s old system is its inability to support manufacturing operations. For example, the motorcycle chassis plant supplies to over 10 motorcycle brands, each chassis requiring over 90 components. It used to take 4 procurement staff 3 days to work on the BOM (Bill of Materials) in order to supply 300-400 chassis each month. However after adopting Microsoft Dynamics NAV, the same work takes only 10 minutes by 1 person to complete.
With the comprehensive functions of Microsoft Dynamics AX, users have no need for customized ERP systems. To produce reports and statements of any kind, Foshan Hiwor only needs to click on its preferred conditions and parameters, and even the BOM forms that require constant changes and involve alternative materials can be easily produced.
For example, the same metal material used in different components, be it in the form of slices or rolls, can be calculated by the system which can convert the original weight of the material to the number of components to be produced. As the types of components to be produced vary, the number would vary. Microsoft Dynamics AX also provides comprehensive support for errors commonly seen in the metal stamping industry. For example, different tolerance is set for different components, and overcharge or short delivery can be adjusted directly in the system, instead of having to manually correct the order bills after actual delivery.
“Prices, quality, and date of delivery are the three factors key to the competitiveness of component suppliers. ” Chang says, “With the ERP system, no more time and human resources need to be wasted on procurement, material calculation and stock take. This can help downsizing human capital to the optimal level, and allow retained employees to focus on more important tasks. ”
Increase easiness of use for beginners and precisely monitor processes and division of responsibility
In the process of introducing Microsoft Dynamics AX, Foshan Hiwor hopes to adopt an existing, smoothly operating process instead of one that is confined by the system design. One great advantage of Microsoft Dynamics AX is its flexibility. The needs of Foshan Hiwor can be easily met by altering the system settings, and thus customized programs are very rarely needed.
The Taiwan-based Mingji introduced Microsoft Dynamics NAV to the company, while China-based Foshan Hiwor adopted Microsoft Dynamics AX, both advised by Knowledge & Strategy Information (K&S Inform). Chang says, “K&S Inform helps clients adopt new systems through interviews, business analysis, process confirmation, operation assimilation, which are all for achieving the goals of more closely meeting the clients’ needs.”
In addition, the interface of Microsoft Dynamics AX is similar to that of Office, which is clear, pleasing to the eye, dynamic and highly accepted. The system supports multiple languages including Traditional Chinese and Simplified Chinese, making the launch of the system much easier. Integration with Active Directory further clarifies scheduled process and division of responsibilities. This allows no room for buck-passing and enables single sign-on.
Chang says, “Even managers just on board can immediately understand the entire situation through Microsoft Dynamics AX. The system provides timely and accurate information on production and logistic, allowing us to respond to last-minute demands from the car plants (clients). We dispatch goods faster than other suppliers within the industry, where car plants apply extremely strict rules in evaluating suppliers. The more control we have over component supplies, the more respect and trust we can win from the car plants.”