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EGL Homecare Limited is a European market leader in the field of sponges, scourers and non woven cloths. The company, based in Shoeburyness, Essex, has grown solidly since its formation in 1979. It now employs around 250 full and part time staff, and boasts a turnover in excess of 22 million. With a UK market share of over 75% in the all-purpose wiping cloths (retail) sector, and a 60% share in the scourer/sponge sector, EGL serves most of the major supermarket and retail groups, with a split of 80% manufactured and 20% factored products. When it became apparent that its existing system was becoming a key constraint to business growth, EGL found the ideal solution in WinMan.
Terry Dearlove is EGLs Managing Director and has been with the company for 17 years. Consequently, he has first hand experience of how the market has changed and the increased challenges this has presented, not just to EGL but to all companies in this sector. Perhaps the biggest challenge is the ever shortening nature of customer lead times, observes Dearlove. They have effectively reduced by half in the past 5 years and were now down to 3 days at the outset. In an industry where quality, price and service determine who wins and who loses, service is increasingly the key factor. So it is vital we can be flexible enough in our manufacturing to keep ahead of our customers demands.
Rising to the challenges
The scale of the challenge becomes apparent when you consider that EGL produces in excess of 1.25 million retail selling units a week, where each unit can range from 1 bath sponge to 20 sponge scourers. This requires a continual flow of 15 to 20 truckloads a day and the utilisation of the most advanced manufacturing machinery in
This very demanding service regime necessitates that the entire production process runs as efficiently as possible from receiving raw materials, through to primary and secondary manufacture, cutting/shaping, packing, storage and ultimately through to delivery. As Dearlove remarks, any problem at any stage can cause horrific knock-on effects. The problems are no different to those faced by many manufacturers:- late delivery of raw materials, human and machine resource planning and scheduling problems, movement of Work in Progress (WIP) through the factory etc. Dearlove points out another very obvious difficulty. The problem with the majority of our goods is that they are high bulk, low-value products, which can impact disproportionately on any element of storage and distribution. The ideal would be a Just-in-Time (JIT) operation, but this is impossible in this market. We therefore have to be as agile as possible.
Other specific problems came hand-in-hand with the increased growth that EGL was experiencing. The higher manufacturing levels put greater strain on the companys IT control systems with key weaknesses such as lack of plant visibility, and works order progress, becoming increasingly evident. Dearlove doesnt pull his punches when it comes to identifying the reason. In essence, we were trying to run a manufacturing company with an accounts package. Our Pegasus Opera system simply wasnt up to our growing need for accurate stock control, replenishment plans, and general workflow planning. It couldnt provide any of the visibility that we needed.
The actual decision to replace the Pegasus system came about after EGL employed the services of an external consultant, David Fisher, to look at the operating systems for managing the entire manufacturing process with a view to a large-scale modernisation program. This involved a 6-month business process mapping exercise that was completed in January 2001. Fishers comments confirmed the opinion held by senior management, namely that EGL urgently needed a manufacturing IT solution that would (i) be able to meet the growing challenges of the companys stock control requirements; (ii) provide a Materials Resource Planning (MRP) methodology without any of the superfluous elements of many MRP systems; and (iii) allow a strategic focus on production planning.
The selection process began with both Dearlove and Fisher visiting various manufacturing trade shows. It was at one of these events that they came across SSL WinMan. An initial list of solutions was reduced to a shortlist including WinMan, with each of the three solutions being put through a rigorous selection procedure involving off-site reference visits, on-site presentations and input from representatives from each key department within EGL. Dearlove summarises why SSL WinMan was the clear winner. There were a number of reasons including the quality of the presentation, the knowledge of the team and the fact that out of everyone, SSL WinMan seemed to be the company that had its feet most on the ground and remained focused on our business issues. However, what impressed us the most was the sheer ease of use of the system. This was essential for us because at the time we had a relatively low level of IT literacy in the company. The Windows format made it something everyone could immediately identify with and feel comfortable with.
The formal decision was finally taken in June 2001 and EGL embarked on an implementation process. In and of itself this proved to bring significant value to the company, as Dearlove explains. We retained the services of David Fisher to work with SSL WinMan for the implementation, and the scale of limitations we had been living with using Pegasus soon became obvious. The WinMan system provided us with levels of data analysis and visibility of our business processes in a way we hadnt envisaged. Consequently, we had to do a lot of unplanned work simply to collate the data the new system would require. By doing so however, we were able to streamline a number of the ways we could operate as a company. The system implementation was accompanied by suitable hardware upgrades to further allow for EGLs anticipated growth.
It wasnt just a technological change that EGL had to undergo, there was quite a cultural upheaval that had to be managed. Any implementation requires an element of re-training, and EGL chose to train each key department leader and then have them in turn train their department. This helped create a large element of buy-in from the entire staff, remarks Dearlove. This was crucial for EGL because not only would the new system require more accurate information input by those using it, it would also highlight more accurately any inefficiencies within the workforce. Dearlove continues, We knew that the entire company would have to work differently once we went live, so we endeavoured to prepare everyone for the changes that would be required.
The cultural change did prove to be the biggest difficulty when the system went live in February 2002, for the very reasons which had been anticipated. It soon became clear that the system was indeed highlighting inefficiencies across the company. Fortunately, most people recognised that this actually was a way to help the company as a whole because it truly showed how everyones actions impacted on everyone else, explains Dearlove. We did have a minority that blamed the system, but the reality soon became clear that as internal disciplines improved this wasnt the case, and in turn it became very easy to say, There are no WinMan errors because there simply werent.
Seeing the benefits
Any suspicions about the validity of the system began evaporating after 2-3 months as people began to find out for themselves that they could not only trust the figures and information that WinMan was generating, but that this also was having a positive impact on their work. For example, prior to WinMan, there was so little trust in the stock figures that even if the system said there were 2 items left in stock, employees would manually spend up to an hour trying to physically locate the actual stock. In the same way, if the system said there were no stock items left, people would still manually double check. With WinMan, people began to take the information at face value which had a considerable impact on their actual fulfilment in doing their job, exclaims Dearlove. He continues, This had further benefits because people increasingly began taking responsibility for what they did due to their increased confidence. It also helped everyone to see the role they played in the bigger picture, which helped engender a sense of mutual accountability. I see this as a key factor in helping EGL to undergo the growth it has experienced over the past 2 years.
Other benefits have included greater accuracy of data, greater planning and operational visibility on a day-to-day basis, and a much greater efficiency across the entire manufacturing operation. This increase in visibility and efficiency has also helped EGL to become more agile in responding to changing customer requirements. This is because different what-if scenarios can be contemplated to determine the best course of action. Dearlove is adamant about the value that the SSL WinMan system has brought to EGL. Without it, we would have exploded and simply been unable to expand in the way we have. Furthermore, the system has been a positive selling tool for our customers because we are now able to demonstrate a highly efficient manufacturing control system, and our customers have responded warmly to this.
With regard to Return on Investment (ROI), Dearlove interestingly states that for EGL, the real ROI is evident all around us, in everything we do. Its impossible to quantify the difference its made. Would Dearlove make the same buying decision again? Definitely, and thats more important than ROI!