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Essential ERP
Minneapolis-based Hawkins Inc. has 14 sites in the Midwest and produces chemicals ranging from water-treatment compounds to food ingredients and adhesives. Achieving greater efficiency in reporting financials and improving business processes were chief goals in Hawkins' move to Oracle's EnterpriseOne software; the two-year implementation will wrap up this October. "If we're going to grow, we have to automate so we can spend time doing other things -- planning and growing the business rather than the day-to-day accounting for products," says Jim Tegelhutter, director of information systems at the $143-million firm. With EnterpriseOne, Hawkins can shave as much as two days off sending out customer invoices, and it can get a more accurate picture of costs and future materials needs, he says.
Much of the caustic soda Hawkins buys to produce its water-treatment chemicals, for example, is delivered via barge on the Mississippi River, and shipments shut down during the winter season. The new ERP system will help the company anticipate its needs, as well as its customers' needs, for caustic until shipments resume in April, Tegelhutter says.
Arch Chemicals Inc. is a $1.3-billion company looking to ERP to give it visibility into its acquisitions in Europe, Latin America and Asia. Its seven units produce water-treatment chemicals, wood preservatives and fine-furniture coatings, among other products. Currently, Arch is deploying a single global instance of SAP, says Al Schmidt, vice president and CIO; thus far, businesses that account for 60% of Arch's revenue have been migrated over to R/3. Next up are three U.K. locations. "SAP will improve visibility into operations and allow [these sites] to set up a service-center model to handle back-office functions and improve efficiency and service. It's a major point of focus," Schmidt says.
With its range of products, including chemicals used to make diapers as well as furniture upholstery and roofing materials, Omnova Solutions Inc. inherited many homegrown systems through a series of acquisitions. Like Arch, the $810-million global manufacturer in Fairlawn, Ohio, needed to integrate disparate locations and eliminate legacy applications. Two years ago, the firm launched an SAP R/3 implementation in concert with a business process improvement initiative using Lean Six Sigma methodology. "We can't control the price of oil or other materials, but we can make our processes more efficient and cost-effective by simplifying and eliminating redundancy," says Doug Wenger, senior vice president and CIO. The initiative has been key in helping Omnova trim sales, general and administrative (SG&A) costs from 19% of sales in 2004 to 15% last year.
The firm's BI project, using SAP's Business Warehouse module, also helped reduce SG&A costs and cut time out of Omnova's planning cycles. "We can provide management with up-to-date information on orders, forecasts and materials. The BI project has reduced our planning and budgeting cycle by a factor of more than two," says Wenger.
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