Oasis Engineering (Oasis) is a precision engineering production facility specialising in the manufacture of products for the oil and gas, pharmaceutical, and food service and hygiene industries.
Oasis operates from Tauranga, New Zealand, with key markets in Australia, Europe, the US, Canada, South America and Asia. It has been a user Epicor ERP since April 2004.
As a specialist engineer to order business, Oasis was hit hard by the effects of the global financial crisis. During March of 2009, the order volume dropped off dramatically: not only were orders rare but Oasis' competitors were being forced to quit their inventories at whatever price they could get.
Not one to waste a crisis, the team took the opportunity of the economic downturn to invest in research and development along with a LEAN implementation project.
"We decided to implement a LEAN initiative to improve the processes not only of manufacturing but across the entire business," Kevin Flint, Oasis' general manager, said.
"This process took approximately one year to implement, much less than the two to three years that it can take. A big investment in person-hours allowed this to happen in such a short time frame.
"We are now seeing a dramatic upsurge in orders and requests for quotations. This situation is welcome but we are now facing problems with sourcing additional staff. We have to be very careful that when we accept orders, we will meet our order demand."
The market situation is highly competitive but Oasis maintains a competitive advantage because it can respond much quicker to demand and can produce smaller runs more efficiently.
Margins are now smaller, placing even more emphasis on efficient production and cost reduction. The key to Oasis' LEAN initiative is the Kanban inventory system, which has significantly reduced inventory levels.
The effort in research and development during the quiet time has allowed Oasis to develop many new product concepts which are now ready for launch.
Oasis' customers are asking for rapid turnaround of product, and the investment in Epicor is allowing the business to meet this demand.
Oasis looked to Epicor ERP system as a part of maintaining a competitive edge. They wanted to have full visibility of costs.
Oasis was able to tailor the Epicor ERP system to with a LEAN implementation.
As a make-to-order company, Kanban jobs are used in the system to help improve response to customer demand and reduce non-value adding processes. The inventory for these products uses Kanban triggers for replenishment quantities; lead times for raw material are kept to a minimum.
Scheduling uses Theory of Constraints (TOC) methodology to determine throughput through the constrained resource. They track the constraining resource and release jobs at the rate the resource can produce. This allows Oasis to know exactly when products can be delivered.
"We have put a lot of effort into eliminating unnecessary processes and waste," Flint said.
"We provide our customers and suppliers with the right information every time so there are no mistakes. We also have an Opportunity for Improvement process that can be initiated by anyone for any part of the business.
"We can change our systems and processes as we see fit."
An "Oasis" of benefits
When asked for the key to a successful ERP/LEAN implementation, Flint commented: "The key is getting the people onboard. It is a long-term process. It can take three years or more. Using the system is crucial to a successful implementation."
"Previously some people would say Epicor ERP is wrong. Once people understood that it is the process, not the software that is wrong — that's when people come aboard and make things work."
Some very important outcomes of the Epicor ERP/LEAN implementation were:
- Teamwork – everyone worked towards a common goal and shared the workload
- Productivity improved by 32 per cent – revenue and profitability are now greatly improved
- Customers are appreciating the proactive approach the Epicor/LEAN process instills – Oasis is achieving 98.9 per cent of planned despatch due dates
- Less work for Oasis – because customers are confident they are going to get what they asked for when they ask for it, they do not ask for expediting unnecessarily
- Improvements in delivery, quality and now pricing, by value adding and quality assurance on receipted goods
- Flexibility in meeting the changing needs of their customers in a time frame and price that they like – despite Oasis being smaller, it occupies a unique position in customer responsiveness.
- Purchasing and administration has improved, especially the traceability of a product in the field. Epicor ERP also helps with ISO 9000; it is very important to know material specifications for each product. Oasis also holds a powerful position in the industry, being able to offer full traceability for each of their products.
- Epicor ERP reference numbers are engraved on all critical parts to ensure accurate traceability and avoid non-authentic part substitution.
- Supply is now based on Kanban stock for standard product. The agreement Oasis has with suppliers on Kanban replenishment quantities have allowed it to reduce inventory by 37 per cent
- Teamwork, cleanliness and orderliness – customers are impressed when they visit the site and the appearance encourages business with Oasis. Pride in the workplace is part of the Oasis culture with everyone, every morning, spending a few minutes cleaning up.
- The reduction in inventory has generated a lot of extra workspace.
- Work in progress has been greatly reduced. It used to be around $250,000 — now it is a fraction of that.
- Better work relationships
Next for Oasis is without doubt more improvements. Kaizan projects are run every six weeks to work through different areas of the business in turn. For Epicor ERP, the next scheduled improvement will be Advanced Print Manager — handling documents electronically — and CRM for sales tracking and marketing.
New products are also in the pipeline back up by process in place ready to ramp up production. Oasis plans to grow the business as a specialist R&D manufacturer by focusing on final assembly, quality assurance and traceability.
An example of the results from investment in R&D is the improvement in performance of their bespoke bus CNG filter. A normal filler would typically tale four hours to complete the filling operation. With Oasis' new design, this operation is now accomplished in 10 minutes — a fantastic improvement with benefits to the user.
Flint is justifiably proud of the most visible sign of permanent improvement to the Oasis team.
"We used to have racks full of WIP," he said, "now they are office furniture racks used for filing office stationery.
"It is usual for a small business like us to have the functionality of a fully featured ERP system such as Epicor ERP. This enables us to offer traceability of our product to level unmatched by our much larger competitors."