Situation Telecommunications providers demand consistently low prices and excellent service levels from their component suppliers. Increasingly, suppliers are expected to begin their production cycles as soon as orders are placed.
Ensuring rapid order fulfilment and optimising operational efficiency are ongoing challenges for InTiCom Systems, which provides digital subscriber line (DSL) technologies to leading telecommunications companies. The company is Germany’s leading supplier of DSL splitters, with 80 percent of the market share. This technology is used to separate data and voice information in telecommunications networks.
InTiCom components can also be found in industrial, medical, and defence systems. Its latest products include radio frequency identification (RFID) modules, which provide information on tyre pressure in motor vehicle technology and help to ensure the safety of drivers and passengers.
Corporate headquarters, including buying, marketing, and product development functions, are located in Passau, Germany, while production facilities are located in Greece and Croatia.
Historically, InTiCom met the needs of its telecommunications customers using custom-made software for electronics production. While this ensured accurate, timely delivery of customer orders, it did not provide the required levels of visibility across all business activities.
Dieter Schopf, Director of InTiCom Systems, says, "The main problem with our legacy software was lack of support for our international corporate structure. For example, the marketing department in Passau did not have an accurate picture of stocks or manufacturing capacities in Greek production units. Before orders could be accepted at headquarters, our employees had to make expensive telephone calls to production units and often had to create inventories of available products manually."
As a result, sales staff were unable to make immediate, concrete offers to customers, causing unnecessary delays in the process of handling orders. It was also difficult to make changes to the functionality of the existing software system. New requirements, such as batch tracking, were expensive or even impossible to deploy. Schopf says, "Without the flexibility to deploy new software functionality, we couldn’t hope to compete effectively in fast-moving markets such as the automotive industry."
To address these issues, InTiCom began the search for a new software solution in 2004. Requirements for new functionality, international capabilities, integration with existing systems, and rapid return on investment (ROI), were paramount. It was also critical that the new system could support specific production processes already in place at InTiCom.
Solution After a careful evaluation of available technologies, InTiCom chose to deploy Microsoft® Business Solutions-NAV®, now part of Microsoft Dynamics™, in December 2004. A specific electronics industry solution from Microsoft Certified Partner Bay-Soft was deployed on the new business management architecture.
The Microsoft NAV system integrates business data, such as customer orders and production inventories, in a centralised Microsoft SQL Server™ 2000 database, part of Microsoft Windows Server System™ integrated server software. At the same time, the industry application from Bay-Soft provides functions such as batch tracking, changeover volume planning, machine optimisation, and enhanced throughput times, which map closely to existing business processes at InTiCom.
Using the new technology, the marketing department and managers across the business can achieve an accurate insight into performance and production. Schopf says, "The Microsoft technology effectively integrates key data from all operational areas. At the same time, the Bay-Soft application is a preconfigured system that matches well with our core business processes and data structures."
After an implementation period of only five months, central business divisions such as materials, production, and order handling were able to begin using Microsoft NAV 4.0. Since it went live in May 2005, the system has been used to control and automate business processes from the acceptance of orders to production scheduling, delivery, and invoicing.
Another important feature of the solution is batch tracking. During this process, each component is clearly labelled with a bar code and batch number. Identity numbers are permanently recorded on relevant order documentation when components are removed from storage.
Schopf says, "By labelling products in this way, we can identify components at any time. If there happens to be a fault in a series of components, we can limit the recall volume and achieve significant savings. The ability to identify and recall faulty products quickly and accurately also enhances service for our customers and increases our competitive advantage."
Currently, 22 workstations in Germany and two machines in Greece are connected to the new Microsoft NAV system. In the near future, 20 workstations in Austria and the Czech Republic will also be added. Microsoft NAV 4.0 modules in use at InTiCom include store, logistics, creditors and purchasing, debtors and sales, production, capacity planning, manufacturing, resources, projects, and customer relationship management (CRM).
Microsoft NAV 4.0 is fully integrated with desktop productivity applications in the Microsoft Office System. As a result, employees can exchange documents using familiar applications such as Microsoft Office Word 2003, the Microsoft Office Excel® 2003 spreadsheet software, or the Microsoft Office Outlook® 2003 messaging and collaboration client.
Benefits Enhanced Visibility of Production and Inventory Significantly Reduces Administration Increased visibility of business activities has increased the productivity of employees at InTiCom. Marketing staff, for example, now have access to data on material stocks and production, eliminating the need for costly phone calls to colleagues in Greece. Schopf says, "Access to data on inventory and production allows us to give customers definite delivery dates immediately, which significantly improves our competitive position."
The industry-specific application from Bay-Soft, combined with Microsoft NAV, supports key requirements, such as the printing of consignment note numbers on invoices and customs tariff numbers on documents accompanying goods. Because all data relating to orders and production is now stored centrally, incidences of human error have been reduced significantly.
Rapid Return on Technology Investments The new system has eliminated the requirement to input data into IT systems manually. Increased automation of a range of business processes, from order management to production scheduling, has delivered significant financial savings.
Schopf says, Microsoft NAV controls all central processes independently, so we save a lot of valuable time on administration and marketing. Because the system automates several of our key business processes, we have been able to increase our turnover from €19 million (U.S.$23 million) to €32 million ($38 million) without employing additional administrative staff.
"Without the new business software, three additional employees would have been required, costing us around €200,000 ($237,078) annually. This saving does not include the additional expenses related to eliminating error-prone manual processes."
By calculating the savings delivered by the new system, InTiCom has been able to estimate a 100 percent return on its technology investment in just four months.
Compliance with Key Regulatory Legislation The new, centralised business management system helps InTiCom map and document its business processes and business activities more effectively. As a result, it supports compliance with regulatory legislation and helps the company face audits with confidence.
Schopf says, "The benefits of the new system can’t be expressed in raw figures alone. Importantly, Microsoft NAV 4.0 allows us to comply with the TS 16949 quality standards that are critical for regulation in the electronics industry. Our ability to demonstrate compliance greatly increases customer confidence and maximises our potential to generate revenues."
Plans to Expand the Solution to New Operational Areas InTiCom is planning to extend its system to a newly opened research centre in Austria and a new production site in the Czech Republic. Schopf says, "The ability to extend the solution quickly and easily to additional operational areas supports our strategic goal of increased visibility across the business."
Microsoft Dynamics Microsoft Dynamics is a line of integrated, adaptable business management solutions that enables you and your people to make business decisions with greater confidence. Microsoft Dynamics works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what’s most important. And because it is from Microsoft, it easily works with the systems your company already has implemented. By automating and streamlining financial, customer relationship and supply chain processes, Microsoft Dynamics brings together people, processes and technologies, increasing the productivity and effectiveness of your business, and helping you drive business success.
