Reimplementation Changing the Way We Do Business David

Reimplementation: Changing the Way We Do Business David Petzel IT Director A. J. Antunes

The Promise in Our Abstract : We promised to tell you how the QAD + Eagle Solution made A. J. Antunes a data-driven company. A. J. Antunes QAD Eagle A Data-Driven A. J. Antunes

Keeping the Promise: 3 Questions 1. 2. 3. • How did a re-implementation of QAD Enterprise Applications reveal the potential for changing the way the company measures its business and makes decisions? • What were the systems, processes or solutions that made that potential a reality? • How do we know it worked?

About A. J. Antunes & Co. • Manufacturing company based in Carol Stream, IL • Facility in Suzhou, China • Product Lines: Roundup Food Service Equipment Vizion Water Filtration Custom Controls

About A. J. Antunes & QAD • • QAD customer since 1996 May 2009 - Upgrade from e. B 2. 1 to QAD 2008 SE with. Net 2. 6. 1 March 2010 -. Net Upgrade from. Net 2. 7. 1 to. Net 2. 8. 1 QAD Modules in use at AJA: – – Using most of the standard QAD modules QPS CSS DRP

Why a “Reimplementation” of QAD? • May, 2008 - AJA CEO questioned the current QAD implementation: – Why is it so hard to gather good data? – Need more than historical reporting at our fingertips – CEOs from other companies brag about their systems • June, 2008 - Contracted Liberty Technology Advisors to evaluate AJA’s current ERP implementation • August, 2008 – LTA recommended that AJA: 1. Re-engineer all business processes 2. Upgrade QAD to 2008 SE and the. Net UI ü QAD is right for our business ü. Net UI brings a whole new level of functionality ü Bad News/Good News…………. 14 years of experience using QAD

AJA Process Re-engineering • 4 months (Nov 15 to March 15) • 25 to 35 hours per week • Key decision to use Liberty Technology Advisors (LTA) for all process mapping – RCM Technologies to provide expertise to blend our future state process maps with the functionality available in QAD 2008 SE &. Net UI • China Team brought in to participate in process mapping on key intercompany processes

Key Decisions After Re-engineering 1) Inventory Control is top priority • Implement discrete inventory locations • Eliminate handwritten “hot” sheets • Implement cycle counting 2) Real-time transaction processing required • Selected Eagle’s RF Express for QAD Enterprise Applications 3) Implement DRP module to manage orders with China 4) Consolidate China db 5) Manage Service Parts as a Profit Center

Key Decisions After Re-engineering 6) Adv Repetitive Backflush Analysis Required • Are we backflushing components at the right time at the right place? 7) Point of Use Analysis for inventory items required • Which items belong in a Work Cell? Eliminate unnecessary transfers. 8) Begin work on custom browses required by new processes

How AJA has become a data driven company New processes to streamline procedures Eagle to execute transaction processing QAD tools to view/analyze data Snapshot Reporting BROWSES FROM PROCESS MAPS Performance Metrics BROWSES FROM OPERATIONAL METRICS Daily Activities REAL-TIME BROWSES

Why Eagle: Technical Considerations Seamless plug-and-play integration with QAD Online, real-time, Progress-based No side databases, separate server or middleware Calls QAD edit and update routines to provide real-time data checking • Supports a wide array of devices, including Intermec CK 3 RF terminals • ALL Eagle installations are also QAD installations • Not a canned solution; over 2, 000 configurable RFvalues • •

Why Eagle: Cost Considerations • Less hardware and software required because RF Express™ for QAD Enterprise Applications uses the existing database and existing server • Reduced database/server ongoing maintenance • Simplified database control: QAD and Eagle work together

How AJA has become a data driven company New processes to streamline procedures Eagle to execute transaction processing QAD tools to view/analyze data Snapshot Reporting BROWSES FROM PROCESS MAPS Performance Metrics BROWSES FROM OPERATIONAL METRICS Daily Activities REAL-TIME BROWSES

3. 2 - Inventory Detail by Item Browse Used to monitor “SO” locations (daily)

How AJA has become a data driven company New processes to streamline procedures Eagle to execute transaction processing QAD tools to view/analyze data Performance Metrics BROWSES FROM OPERATIONAL METRICS Daily Activities REAL-TIME BROWSES Snapshot Reporting BROWSES FROM PROCESS MAPS

AJA Process Map

How AJA has become a data driven company New processes to streamline procedures Eagle to execute transaction processing QAD tools to view/analyze data Snapshot Reporting BROWSES FROM PROCESS MAPS Performance Metrics BROWSES FROM OPERATIONAL METRICS Daily Activities REAL-TIME BROWSES

Operational Metrics

Example of a browse “behind the metric”

275 Custom Programs TOTAL REPORTS MAINT EXTRACT UTILITY DATA COLLECTION BEFORE Reimplementation 275 165 35 32 33 10 AFTER Reimplementation 134 71 33 6 24 0 Reduction in Custom Code 51% 57% 6% 81% 27% 100%

Success Story #1 – Advanced Repetitive Problem: Repetitive work cell activity is not transacted in realtime, causing material issues and handwritten “hot” sheets. Goal: Use the future state Process Map to eliminate time delays and to empower Line Leaders to effectively manage their cells.

Success Story #1 – Advanced Repetitive How we did it: • Process Change: Add Operations to Routings to improve work cell visibility: – – • • Assembly (90% of BOM is backflushed here) Testing (up to 24 hours) Packaging Staging (after completion) Process Change: Specify timing and parameters for Repetitive Picklists so that material for tomorrow’s production shows up before 1 st shift begins Technology: – Eagle backflush transactions (handheld & PC’s) – Eagle label printing (on wireless printers) so that all material would be identified with a Part Number/Bar Code – Production Line Schedule Browse (custom browse) • Empowers Line Leaders to prioritize daily production • Paperless interaction w/Scheduling • Auto Refresh “Live” browse for anyone viewing it

Success Story #1 – Advanced Repetitive Result: • Line Leaders rely on QAD browses • With timely backflushing, all Team Members rely on Inventory accuracy within the Work Cells • Handwritten sheets are gone • Product identification is not an issue any more • Line Leaders are quick to identify BOM issues • Expedited orders are handled very easily without the burdensome paperwork • Line Leaders are expected to be proactive for maintaining their Work Cell inventory

Success Story #2 – Service Parts Problem: Service Agencies supporting key accounts are complaining about late deliveries and shipping errors Goal: Improve on-time and overall Shipping performance in the Service Parts Division

Success Story #2 – Service Parts Overview of Service Parts: • Replacement component parts • Kits that are assembled within the Service Parts assembly area; kitting area set up as a repetitive w/c • High/growing volume • Daily demand for Next Day Air shipments domestically and internationally • Same components that are used by Work Cells for finished goods assembly

Success Story #2 – Service Parts How we did it: • Process Change: Get inventory under control in SP locations – Delineate Service Parts Kitting work cell from Service Parts stock room – Operate the SP Kitting as a lean repetitive work cell; maintain inventory only on exclusive items – Define a schedule for QPS planning and repetitive picklist printing for the Kitting area – Define a schedule for Picklist printing for SP components – Develop a weekly Cycle Count schedule to cover stocking and staging locations • Process Change: Develop policy that any “rush” order for a replacement part or kit received by 3: 00 pm CST will be shipped Next Day Air (6: 00 pm pickup)

Success Story #2 – Service Parts Shipping How we did it: • Process Change: Create locations, locations to manage the flow of material to and from the Service Parts area: STAGING 5 (From Gen Warehouse) SERVICE PARTS STAGING 8 (Completed Kits) STAGING 7 (To China)

Success Story #2 – Service Parts Shipping How we did it: • Technology: – Eagle backflushes kits (PC’s) – Eagle transfers product to/from Staging locations – Eagle picks product to an “SO” location (handheld device) – Eagle performs weekly Cycle Counts of Service Parts locations (handheld device) – SP Open Line Items (custom browse) • Empowers order processors to prioritize picking/packing activity • Next Day Air “rush” orders are quickly identified • Takes advantage of Auto Refresh – Inventory Detail By Item Browse (custom browse) – Production Line Schedule Browse (custom browse)

Success Story #2 – Service Parts Results: • Satisfaction of Service Agencies has improved tremendously – Ownership is in the hands of Line Leaders – Adjustments to schedules are immediately visible to Line Leaders – Still requires communication for “rush” orders • With improved efficiencies, SP is no longer overwhelmed by spikes in volume • Service Parts continues to grow at a solid pace • On-Time Shipping has improved from 82% (July 2009) to 99. 3% (August 2010)

SP Parts Shipped SP Shipped On Time SP On Time % AJA Service Parts On-Time Shipping 1 st Qtr 74973 74344 99. 2% 2 nd Qtr 89516 88838 99. 2% 100, 0% 98, 0% 96, 0% 94, 0% SP 92, 0% AJA 90, 0% 88, 0% SP AJA January 98, 4% 92, 6% February 99, 0% 98, 4% March 99, 8% 94, 9% April 99, 2% 89, 9% May 99, 1% 95, 9% June 99, 3% 91, 2% July 98, 1% 94, 0% August 99, 3% 96, 6%

Success Story #3 – Shipping Problem: Frequent cases of incomplete shipments, incorrect shipments, duplicate shipments, or duplicate serial numbers Goal: To provide Shipping with tools to improve Shipping performance measurements and to proactively manage outbound Staging locations

Success Story #3 – Shipping Responsibilities of AJA’s Shipping Team • • • Picking and shipping for food equipment FG’s Picking and shipping for water filtration FG’s Shipping for Controls Shipping for Service Parts Shipping consolidation for China container shipments Manage various Staging locations

Success Story #3 – Shipping How we did it: • Process Change: Separate and identify product coming into Shipping • Process Change: Implement controls for Picklist and Packing List management • Process Change: Authorize Shipping to proactively pull FG’s coming out of work cells

Success Story #3 – Shipping How we did it: • Technology: – Eagle PIC transaction; creates a virtual “SO” location and once a serialized item is picked, it cannot be picked to another Sales Order. Allocating without formal SO Allocations – PIC transaction provides option for printing a Post-Pick Packing List – Eagle DO Shipment/DO Receipts for all DRP orders To/From China (handheld device) – Eagle transfers; scan the Serial # and scan the To: location (handheld device) – Eagle used to perform Cycle Counts of Finished Goods bin locations (handheld device) – Eagle IBL (Inventory By Location) used to locate product (handheld device) – Open Sales Order Browse (custom browse) – Inventory Detail By Item Browse (custom browse) • Check/verify inventory availability • Manage Staging locations

Success Story #3 – Shipping Results: • Eagle PIC program provides a tracking tool for virtual “SO” locations • Inventory is not getting mixed up within the Shipping area because Staging locations are helping • Real-time picking or shipping available to all users via browses • Phone calls between Shipping and Customer Service have dropped by 50% • Shipping is clean and organized

3. 2 - Inventory Detail by Item Browse Used to monitor STAGING location (daily)

Lessons Learned • Browse Control – Maintain code control. Browses can easily get out of hand. Think about a performance monitoring tool to identify any misbehaving browses • . Net Upgrade – Users love their Favorites and moving them to a new version is very tedious • Process Map Control – Process Map Editor In Chief oversees all process map updates • Operational Metrics – Take a Team approach to maintain consistency and to get approval on thresholds

Questions

Contact Information: David Petzel IT Director A. J. Antunes & Co. Ph: (630) 784 -3435 E: david. petzel@ajantunes. com W: www. ajantunes. com Jim Miceli Senior Consultant Eagle Consulting & Development Phone: (973) 838 -5006 ext 120 Email: jmiceli@eaglecondev. com Web: www. eaglecondev. com