Choosing IFS Applications
Long-run manufacturers handling only their own proprietary products have enough of a challenge keeping a handle on their business. But for Lou-Rich, Inc., an Albert Lea, Minnesotabased contract manufacturer, tracking revenue and inventory is even harder. Founded in 1972, Lou-Rich specializes in serving original equipment manufacturers (OEMs) with complete products and equipment, mechanical and electromechanical subassemblies, engineered mechanical components and weldments, and ultra-precision aluminum extrusions. To complicate matters further, apart from its work on behalf of OEMs, Lou-Rich manufactures and markets its own line of equipment used in the construction of prefabricated wall panels. The Panels PlusR product line is marketed throughout North America with some international distribution to boot. The company operates in multiple manufacturing modes, including make-toorder, make-to-inventory, and shipto- order. According to Lou-Rich’s CFO, Steve Tufte, the diversity in manufacturing modes and the fact that the company’s existing MAPICS manufacturing software was not integrated with its general ledger drove the company to consider other enterprise software options. “We didn’t have detailed cost information under our old system,” Tufte said. “A lot of the challenge revolved around inventory transactions. We used to make one big entry at the end of the month, but needed to get better information regarding those transactions so we could make process improvements. “A good example is the fact that we didn’t have manufacturing variances on parts—we just had that one big transaction. Unless you tried to get into detailed analysis on a part, we had nothing to track or identify each part. The main thing was that unless we identified a specific part, we really didn’t know if we were having variances— either negative variances or positive variances.” In 2002, Lou-Rich purchased a software program designed to help the company evaluate and compare enterprise software applications. MIS Director Dan Claussen and an interdisciplinary selection team identified six companies to research further and eventually selected an enterprise software suite from IFS, including applications for manufacturing, distribution, engineering, financials, and workforce management. The applications are integrated with Lou-Rich’s existing Ceridian payroll system. IFS also customized a data collection system used plant-wide to track time and materials data, replicating functionality offered by an existing plug-in to MAPICS. Lou-Rich went live on the system in December 2003 and plans to add IFS’ maintenance solution to its system as well, according to Tufte.
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Easier, visible, and consistent
Since implementing the new system, Lou-Rich management is enjoying a number of benefits—including a newfound consistency in business processes. “Our earlier process was that information went through multiple hands before it was entered into our system, but now the person creating things is doing it live instead of handing it off to somebody,” Engineering Manager Doug Olson said. “There is a savings in time and increased accountability. Moreover, the time it takes us to create something in IFS is decreased versus our old processes. Now the time is spent analyzing and doing things rather than creating documentation.” “On the purchasing side, we used to be pretty loose,” Tufte said. “People would order things and then ask for expense account codes. It’s not like that anymore. We are requiring a lot more requisitions and documentation.” “On the engineering side, the new system helps us keep controls on everything,” Olson said. “Before a process starts, there has to be some record in IFS. We need to have part numbers to track to accumulate cost. Yet when you are working on a prototype, it is easy to push through a generic job to get something done in a hurry. “IFS is also taking a lot of the verbal communication out of our manufacturing process. Before we would order in material and let purchasing know they have to contact production when the material comes in. It is now automated through IFS.” Across the board, according to Tufte, company management is enjoying increased accessibility of information. “I think we can address financial and customer issues more accurately,” Tufte said. “At a part level, the system has helped us identify parts and processes where we have a problem with the standard or with the process. Where there are variances occurring, we can take it back to the part.”
Facts about Lou-Rich, Inc.
Lou-Rich, Inc., is a leading provider of assembly contract engineering and lean manufacturing solutions to some of the world's most innovative companies. Vertically, Lou-Rich’s capabilities include engineering, sourcing, manufacturing, welding, painting, and assembling products to satisfy customers’ needs. On a horizontal scale, the company provides a wide variety of processes for manufacturing precision parts. Lou-Rich serves leading original equipment manufacturers (OEMs) in the following markets: agrucultural equipment, construction and building component equipment, food service and production equipment, industrial products, and medical equipment and devices.
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