new industry-specific erp system for compounders
TRANSCRIPT
New Industry-Specific ERP System for Compounders
Case Study Poly.ERP • 2012
Copyright © 2012 Kirchhoff Datensysteme Software GmbH & Co. KG; All Rights Reserved
Polymer-Chemie Group was facing a precedent-setting decision during mid-2008.
It had to introduce a new system to depict its corporate processes.
4–5An ERP System for the Polymer-Group
6–7Company Profile Polymer-Group
8–9A Polymer Compound Manufacturer Orders Development of an Industry Solution
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10–11Module-Based Introduction of Poly.ERP
12–13Interview with Dr. Gerald Hauf
14–15Continuous Practical Focus
Kirchhoff Datensysteme Profile
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Process analysis and consulting
An ERP System for the Polymer-GroupPolymer-Chemie Group was facing a
precedent-setting decision during
mid-2008. It had to introduce a new system
to depict its corporate processes.
Although the in-house developed soft-ware modules “Inventory Management,” “Production” and “Quality Assurance” used to date pragmatically handled many corporate functions in a user-friendly way, over the course of time, these modules no longer could meet the requirements of the growing and increasingly diversified Group.
An analysis conducted by external con-sultants quickly identified the obvious approach to solving the problem: “intro-
duction of a standard ERP system!” The consultants developed an initial software roll-out scenario including a rough cost estimate. However, Polymer business management decided to take a closer look at the proposal after hearing about nega-tive experiences of friendly companies with “significant budget overruns” and “estab-lishment of standard processes that were unsuitable for the industry.”
A second analysis focused on the pro-cess-related objectives of Polymer Group:
• Which operational processes must be pragmatically depicted by the system in an industry-specific way?
• How do suitable systems support these processes?
• Do the new processes improve the ef-ficiency of work task handling?
The result of this analysis was surpris-ing! The analysis revealed that instead of a standard system, 3-4 partially specific industry applications would be needed to efficiently depict the relevant business processes in line with the needs of the industry. And, of course, these systems had to closely dovetail with each another via interfaces.
A comprehensive standard ERP system that depicted the key processes of com-pounders in a holistic, consistent and industry-compatible way was not available on the market.
Polymer Group is headquartered the
Bad Sobernheim, Germany, and
originated from Polymer-Chemie GmbH,
an independent, privately owned company
founded in 1973 that compounds, refines
and modifies polymers. Polymer Group
flexibly and efficiently supports its custom-
ers throughout Europe with innovative and
The Polymer-
tailor-made products of the highest quality.
Today, Polymer Group comprises seven
polymer compounding companies – Poly-
mer-Chemie, Polyblend, TechnoCompound,
PolyMIM, Polymer-Chemie Rus, Sun Alloys
Europe and Masterbatch Winter. 400 em-
ployees contributed to sales of about EUR
150 million in 2011.
Polymer-Chemie GmbH
Polyblend GmbH
TechnoCompound GmbH
PolyMIM GmbH
ООО “Полимер-Хеми Рус”
Sun Alloys Europe GmbH
Masterbatch Winter Herstellungs- u. Vertriebs-GmbH
Chemie Group
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About Polymer-ChemiePolymer-Chemie is an independent, privately owned company that consid-ers itself as a link between raw material manufacturers and the plastics processing industry. Polymer-Chemie compounds, refines and modifies polymers, conducts customer-specific development work and responds to current market requirements with new products. Developing innovative products and new formulations is the core competence of Polymer-Chemie.
Market Leading Supplier of PE, PP and PVC Compounds in GermanyThe Polymer-Chemie business activities are focused on compounding PE, PP, PVC and technical plastics for customers in Germany and Europe. Polymer-Chemie is one of the leading polymer compounding companies in Germany. It is particularly strong in the PVC and polyolefin com-pounding segments both with its own products and with toll compounding products.
Customer-Oriented Product Development and Application-Technical ConsultingPolymer-Chemie utilises its many years of experience in manufacturing customer-specific formulations and providing colour matches for all established processing procedures. Its customers benefit from its rapid clarification of technical requirements as well as its flexibility and speed in sam-pling, production and delivery. Polymer-Chemie also offers its customers tailor-made support and consulting services provided by qualified application engineers in starting up new compounds on site and in technically optimising production pro-cesses.
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Complex requirements for systems and on processes
A Polymer Compound Manufacturer Orders Development of an Industry Solution
Polymer-Chemie Group business man-
agement decided to take an unusual
approach. It contracted the development
of a specialised industry solution that was
able to depict the business processes of all
Group companies in a standardised but also
industry-specific way.
“As standardised as possible and as individual as necessary!” The guideline for the development work was: “As standardised as possible and as individual as necessary!” From the very beginning of this project, Kirchhoff Daten-systeme Software focused on developing an industry-specific ERP system. In this context, ERP meant that all operational corporate processes must be consistently depicted within an integrated corporate database so that all Company depart-ments can work hand-in-hand in complet-ing their work processes.
3 circumstances contributed to the suc-cess of this demanding project:
Polymer-Chemie modifies and compounds polymers, develops customer-specific solutions and keeps adapt-ing its product portfolio to the latest market requirements. Innovations and the development of new formulations are Polymer-Chemies core competence, which enables cus-tomers to purchase tailor-made solutions for their specific needs.
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Orders Development of an Industry Solution
Scope of requirements of Polymer Group
Polymer Group consists of seven, inde-pendent companies. Although they all are polymer compounders, each company has its own process specifics. These are sometimes due to the type of business. In other cases, they are based on historical developments or management personnel decisions.
This meant that from the very beginning of the project, there was a lot of pressure to identify business-critical special needs and industry-specific requirements for stan-dardisation.
Close involvement of professional personnel
The process and functional models were developed based on existing deviation analyses while working closely together with the respective operational managers.
The existing, in-house de-veloped modular software
Individual modules developed in-house by the Company’s IT department head using in-depth understanding of the fundamental departmental processes provided a robust framework for process and functional analyses.
First modules went live in August 2010
Module-Based Introduction of Poly.ERP
The new “Poly.ERP” industry solution
was developed and introduced on a
module basis. The first modules went live at
the PVC compounding subsidiary in August
2010. A number of fundamental changes
in work processes were introduced at the
same time:
Container-Based Inventory ControlBarcode-controlled inventory administra-tion using mobile data terminals was intro-duced with Poly.ERP. Using this system, each container is marked with a barcode upon receipt until it is consumed, from its manufacture until it is shipped. That way, it can be tracked throughout its logical life-cycle via scanner. The simple, user-friendly scan functions have been designed so that they can be easily used by production and logistics employees.
Order-Integrating Production PlanningThe production control station is directly connected with booked order data so that integrated order delivery date-based production planning can be made without circulating documents. The software also considers industry-specific order types such as toll compounding orders, master call-off orders and production/technical special cases such as blending processes and start-up control for granulate materi-als.
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Scanner-Controlled Production ProcessesRegardless of whether batch tracking, raw materials consumption, material demand or manufacture of finished products is involved: All production processes are directly recorded by a scanner and are available for review in the system.
The modules were developed one after another and successively introduced in the Polymer Group companies. A com-prehensive ERP system was developed during an almost five-year period that covers all operational processes of the polymer compounder. Special solutions were implemented in addition to the nor-mal business processes of a formulation-based compounder.
EDI IntegrationA business integration module for exter-nal companies was implemented. This interface manager enables an externally operated logistics centre to be connected with Poly.ERP. With this configuration, for example, documents are electronically exchanged between the Company subsid-iary Polyblend and an important customer.
Integration of the Russian SubsidiaryIntroduction of Poly.ERP to the Rus-sians subsidiary “OOO Tula Polymer” of the Polymer-Chemie Group required that several country-specific system processes also be depicted. It was very helpful that the Poly.ERP software architecture was designed for multilingual use throughout the system. Modifications to suit custom-er-specific processes of a polymer com-pounder can be easily made using param-eter control.
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How do you view the results of your decision today?
Today, we have system-supported pro-cesses throughout all departments of our Company. Since introduction of Poly.ERP, we have been continuously working on improving our processes and making them more efficient. We have made a lot of progress in doing so, but, of course, there
is still a lot of work to be done in this area in future. In addition to improving our work processes, Poly.ERP also improved our process transparency, a second important aspect. Today, many processes and inter-relationships are much clearer than they were prior to the introduction of Poly.ERP. And of course, that is crucial for making good corporate decisions.
What are the key benefits of Poly.ERP from your point of view?
Dr. Hauf, why did you contract devel-opment of an ERP system during a period in which the market was full of standard corporate applications?
Information we received from companies with which we have a friendly relationship about their experiences in introducing a well-known and widely used stan-dard ERP system puzzled us. A de-
tailed analysis revealed that many process steps that, at first glance, seemed to have been standardised, did not improve our corporate processes when you analysed them more closely. However, implementing more efficient processes was a key objec-tive of introducing the system. Bottom line, the KDS concept was more convincing than everything else we had seen up to that time.
But wasn’t that very risky to contract customer-specific ERP system devel-opment?
Of course! However, we were able to limit the financial risk by concluding a certainly
unusual master agreement. We had the following idea: Polymer-Chemie would finance development of parts of an indus-try solution for polymer compounders. In return, it would receive a tailor-made, comprehensive ERP system to meet its own specific requirements. Of course, we could not completely eliminate implemen-tation-related risks, but we considered these risks to be lower than the risks of
Interviewwith Dr. Gerald Hauf
“Today, many processes and
interrelationships are much
clearer than they were prior to
the introduction of Poly.ERP.”
other alternatives. At the end of the day, our success proved that we were right.
Do you mean that you made a preci-sion landing from a budget point of view?
Unfortunately, not completely (while smil-ing)!
We underestimated the internal efforts needed to modify our processes within our organisation.12
About Dr. Gerald Hauf Dr. Gerald Hauf is a managing partner of Polymer Group and a second-generation member of the founding family. After completion of his studies of mechanical engineering with a major in plastics engineering at the RWTH Aachen University, he acquired structuring expertise while working for the McKinsey & Company consulting firm before he joined the family company in 2001.
I am sure that if you speak with the various managing directors of the Group and with the respective department heads of the individual companies, each one will natu-rally have a different view of what is ben-eficial. From my point of view, I feel that it is very helpful for the Group that, thanks to standardised processes, we have an ever better understanding of what is going on in the companies. At the same time,
their industry-specific topics are efficiently depicted. A good example of the above is the transparency we have gained regard-ing gross profit performance.
Would you make the same decision today that you made 5 years ago?
No! Today, you can buy Poly.ERP as an industry solution. That would certainly be more cost-effective!
All jokes aside! I don’t know to what extent
“Implementing more efficient processes
was a key objective of introducing the
system.”
other standard systems have become more suited in the interim to meet our in-dustry-specific requirements. As we know, the world continues to develop further. But if nothing has significantly changed in this area, we would make the same decision again!
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Continuous Practical Focus
In addition to expanding modules and
departmental functions, Polymer-Chemie
Group, working together with Kirchhoff
Datensysteme Software (KDS), established a
continuous process improvement process.
Operating managers from all operational
areas and system developers continuously
work on improving the efficiency, practical
applicability and controllability of work pro-
cesses and the related system functions.
The results of this work are routinely includ-
ed in new software releases and thereby
continuously improve the work sequence
organisation within the Company.
Kirchhoff Datensysteme Software has been
marketing the “Poly.ERP” ERP system as a
specialised industry solution for polymer
compounders in the European market since
the beginning of 2012.
In doing so, KDS is striving to become the
market leader in the ERP field for polymer
compounders. To achieve this objective,
KDS will continue the practically-oriented
further development of the system that
was begun with Polymer-Chemie. Each new
customer gained will help KDS to further
expand the functionality of the software, a
process that will benefit all existing custom-
ers.14
Kirchhoff Group has been operating for more than 22 years as a respected software development and system house. It has more than 100 employees and offices in Erfurt (home office) and Mainz (Wackernheim). It also has a development center in Prague and additional locations in the Czech Republic (Šumperk, Brünn and Budweis).
Kirchhoff Group initially focused on development partnerships with large automobile companies. During the past few years, it has also gained customers from a wide range of industries.
At the beginning of 2012, KDS positioned itself as a supplier of standard ERP software for polymer compounders and has been very successful with its products in this industry.
DatensystemeWackernheim Location:Kirchhoff Datensysteme Software GmbH & Co. KG Kleine Hohl 45 55263 Wackernheim
Phone: 06132 78 37 72 Fax: 06132 71 87 03
Erfurt Location:Kirchhoff Datensysteme Software GmbH & Co. KG Vollbrachtstraße 17 99086 Erfurt
Phone: 0361 66 46 10 Fax: 0361 66 46 118
Internet: software.kds-kg.de polyerp.de
Email: [email protected] [email protected]
Kirchhoff
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Poly.ERP is developed by
Contact us - in any language you like.
Kirchhoff Datensysteme
Software GmbH & Co. KG
Kleine Hohl 45
55263 Wackernheim
Phone: 06132 78 37 72
Email: [email protected]
Internet: www.polyerp.eu
We do speak “compoundish”.