K3 races to help drive efficiency at Caterham Cars

With a new owner, a new management team, a new model and a full order book, Caterham Cars turned to K3 business technology for a new IT system to help drive efficiency within the business and throughout the supply chain.

Founded in 1973, Caterham Cars employs over 70 people in three sites across the UK. Turnover is in the region of 15 million and the company produces more than 500 of its world-renowned Caterham Seven cars a year, either fully factory-built or in partially-assembled, kit form. The export market is a key growth area and today accounts for over 45 percent of annual production. 25 percent of production is for the motor sport market and Caterham runs six factory championships across the world. The company was acquired in January of this year by a management buy-in team led by Ansar Ali (formerly general manager of Lotus Cars) and backed by private equity corporate finance house, Corven Ventures. A commitment to evaluate all the systems at Caterham was part of the business plan underpinning the acquisition.

Caterhams proud claim is that no two of its cars are built the same; as a result, production is heavily dependant on the knowledge and experience of the companys staff but without a supporting systems infrastructure, there were inefficiencies in manufacturing and business processes. Within six months of the takeover, Caterham had evaluated, selected and ordered a fully-integrated SYSPRO manufacturing (ERP) and customer relationship management (CRM) system from K3.

Ansar Ali: Its an integral part of our brand that customers feel they are totally involved in the business. Its difficult to articulate but our customers feel they own part of our business - they know our staff here by name and vice versa its a symbiotic relationship and thats a very important part of customer loyalty.

Caterham wanted to continue offering a completely bespoke service but with faster order response and more efficient manufacturing processes and supply chain structure. We didnt want the new system to be too clinical and were very confident the K3 system will let us retain that intimacy whilst introducing a very flexible and efficient CRM process.

Ansar sees that the system will bring immediate benefits in a more efficient supply chain - the company is an assembly, rather than manufacturing, business and he feels opportunities lay in getting smarter around sub-assemblies. Our product is simple relative to other cars but there are complexities around the build and we will be working with our suppliers to provide more sub assembly and development work outside the business.

There is also healthy debate going on in the business about best practice manufacturing processes and Ansar believes the full order book (the result of a new model - the Cosworth-powered Caterham CSR) artificially disguises lead-time issues. He expects the K3 system to help shorten lead times via supply chain and manufacturing efficiencies and is in no doubt the company will be able to sell more cars by freeing up capacity.

Ansar also says the K3 system has a fundamental role to play in Caterhams position as a business-to-consumer operation: We are in a unique position in our sector because we sell direct to the customer. The new CRM system will allow us to profile our customers, feeding through trends and purchasing behaviour very quickly. We expect to have one of the best CRM processes any car manufacturer could want well know a great deal about every consumer that has ever bought or intends to buy, our car, with no third party filtering that information.

Ansar says it was not just the capabilities of the system that made K3 the most attractive option: As a small business I cant emphasise too much, how important this project is to us; the way we embrace it will determine the future of this business. There was no doubt the system met our specific business and technical requirements but more than that, the understanding K3 had of our business; the sector were in and the challenges we face, came across very quickly.

The system has already delivered Ansar a vision of the future: We see a customer sitting in Japan or the US being able to fully configure their car online. We want passion to retain command of buying behaviour; that maintains intimacy and personalisation but the information feeds seamlessly into our business processes. That is the utopia.

Implementation has already started, with CRM going live at the end of July and the system fully live in the first quarter of 2006.