Closing process gaps: Taiyo America gains control of its business with integrated ERP
Taiyo America enjoys a 50-percent share of the North American solder mask market and more than 40 percent of the global market, with customers ranging from garage-shop PCB fabricators to major original equipment manufacturers. Still, company management didn’t feel it was in complete control of its own business until it found the right ERP system.<br/>
Taiyo America, Inc. manufactures and sells the stuff that keeps us wired. Not coffee or energy drinks, but solder mask—the coating that protects and insulates the inner workings of printed circuit boards (PCBs) in nearly everything electronic. Solder mask also serves as the “skin” of the PCB—the colorful part of the circuit board that consumers see in transparent tools and gadgets.
With a support network stemming from Japan-based parent company Taiyo Ink Manufacturing Company Ltd., Taiyo America enjoys a 50-percent share of the North American solder mask market and more than 40 percent of the global market, with customers ranging from garage-shop PCB fabricators to major original equipment manufacturers. Still, company management didn’t feel it was in complete control of its own business until it found the right ERP system.
The manufacturing evolution
When Taiyo America opened its manufacturing facility in 1995 in Carson City, Nev.—its headquarters today—it installed a DOS-based computer system and three stand-alone software applications: one for lab management, one for production and inventory control, and one for accounting and financials. And for the next 12 years, the company struggled to fit a round peg into a square hole, with Business Manager Bob White and Technical Manager Rick Carlson doing most of the pounding.
The source of frustration was two-fold:
• The systems weren’t integrated, which complicated the transfer of data between departments; and
• The systems weren’t designed to handle the unique needs of a formula-based manufacturer.
“We were throwing ourselves against a brick wall trying to make it work,” White says.
A subsidiary of Taiyo Ink Manufacturing Company of Tokyo, Japan, Taiyo America’s offerings include dielectric and conductive ink products for producing solar cells and inks that are applied with inkjet technology for traditional legend and printed electronics applications.
The problems started at order entry. Customer service had to handwrite sales orders, which were then passed back and forth with shipping before they were keyed into the production system and imported and exported to the other systems. To communicate an order to the shop floor, production personnel printed bills of materials from the production system and generated separate assembly instructions from an external word processing program.
Generating Material Safety Data Sheets (MSDS)
Then Carlson would copy an existing MSDS and modify the document by hand.
In addition, system maintenance was complicated and required outside help. White estimates Taiyo America used 80 hours of consultant time annually to install systems updates alone.
Change in business, change in technology
While White and Carlson were toiling to connect the dots between systems, Taiyo America’s business was expanding into Europe and more midmarkets, and the company needed to increase its manufacturing capabilities. Simultaneously, support for its lab management system was about to expire. Carlson started talking about making a change.
Based on Carlson’s research, an internal search team identified five ERP systems and evaluated each through online demonstrations. They found all but one was either too complex or too customized.
That system, a fully integrated accounting and ERP system, is designed to integrate every aspect of a coatings manufacturing business in a single system, including formula management, regulatory reporting, Quality Control/Quality Assurance (QC/QA), sales, purchasing, inventory, production, and accounting.
Taiyo America went live with its ERP system in April 2007, picking up where it left off with inventory management, sales, and financials.
But Taiyo America didn’t license a new system just to do business as usual. Carlson immediately assembled shop-floor paperwork, combining bills of material and work instructions in the same document.
Then, with help from the vendor’s technical staff, Carlson input raw material properties and configured formula calculations. Now when a user enters a batch yield for a formula, the system automatically scales the raw material amounts and properties, which roll into user-defined calculations for the generation of MSDS forms and other regulatory documents. Additionally, since the system integrates lab management and production, Carlson can “flip a switch” to make formulation data and associated historical information available on the shop floor.
Sales order entry was simplified, too. Now customer service employees enter orders once and the data automatically hits all downstream processes, including accounting and financials.
And White’s life as business manager is easier because system updates apply to a single server and feed out to individual users—so he no longer depends on outsourced IT support.
After one year with the fully integrated ERP and accounting system, White and Carlson say they’re managing their business productively and profitably, but are still learning every day.
Recently Carlson experimented with the system’s unlimited costing scenarios, which weren’t available with Taiyo America’s former software setup.
Taiyo America buys multicurrency, so as the yen/dollar exchange rate fluctuates, they can quickly make mass pricing changes to determine how the value of the dollar might impact the company’s bottom line and individual products. Carlson approached the company president with a breakdown of past, present, and future costs to show the effects of the end-dollar exchange rate over time.
“We were able to ask ourselves: Why produce Product A and Product B when they’re essentially the same and Product B turns the best margin? It’s a great advantage to have that 'what-if?' cost analysis capability,” Carlson says.
White agrees that data visibility is a system high point. With all of Taiyo America’s data in one database, massive reports are eliminated.
“Now we can drill down to the exact piece of information we need at a given moment because the system is set up by part master, territory, region, part—whatever you want—and you can filter that information by date range or any other variable,” White says. “Then you click, run, and the information’s there. It’s great.”
With its integrated ERP system, Taiyo America personnel can print bills of material (BOM) to receive item, quantity, and cost information as well as instructions for assembly in one concise document.
Jay Deakins is President of Deacom Inc., supplier of an integrated accounting and ERP software package for paint, ink, coatings, specialty chemical, pharmaceutical, adhesive, sealant, cosmetic, food email@example.com
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