Konig Wheels has facilities on both coasts of the United States. The problem was that, even with sufficient data, there was no cohesion in its operations. In 2004 the company realized a change was necessary and decided to implement a new enterprise resource planning (ERP) system.
“We migrated from Flexware, an early ERP program,” says Rick Guavera, president of Knig Wheels. “We used that for five or six years. We had enough data, but wanted something more robust. We’re located in New York (Plainview) and California (Chino). Under the old system, even with several servers, there was no way for California to connect to our database with dial-up or even with broadband. It was causing a lot of delays. All the stuff we were doing in California was coming in summary [reports], not in detail.”
After a search Konig, a 28-year-old subsidiary of importer/exporter Pan Mar Corp. that manufactures wheels and wheel covers for the automotive aftermarket, selected NetSuite as its Cloud-based, software-as-a-service (SaaS) ERP provider.
“NetSuite allows them to more efficiently serve their customers,” says Roman Bukary, who heads manufacturing and wholesale distribution industries for NetSuite. “The CEO is in New York, the CFO is in Singapore, and they’re successfully running a global wheels business. In the automotive aftermarket, it’s a matter of not carrying too much excess inventory while having enough of the popular items. We’re the foundation that powers Knig’s operations.”
A Vibrant Ecosystem
Bukary describes that operation as “almost like a vibrant ecosystem. It’s not just machines running, but it’s how long does it take to fill the order, buy raw materials, machine them and package them. They have to figure in cost, availability, time, demand, trends.”
Here’s the way it works. Knig sells, say, four wheels to a wholesaler. Now the inventory is down by four, so Knig knows it needs to obtain raw material and begin the procurement process to replace those four wheels. NetSuite, Bukary explains, helps Knig figure out which factory will fill the need. Information includes capacity of the plant, cost of manufacturing and number of machines on the factory floor.
The key is Material Requirements Planning (MRP) and Manufacturing Resource Planning (MRPII) systems for organizing the resources and inventory required for production. MRP has three stages: ensure materials are available for production and that products are available for delivery to customers; maintain the lowest possible level of inventory; and plan manufacturing activities, delivery schedules and purchasing activities. MRPII addresses operational planning in units, as well as financial planning in dollars, and has a simulation capability to answer “what-if” questions.
Now not only are Knig’s East and West Coast offices seeing up-to-date reports, but so are its suppliers in Asia. “Another challenge we had, that NetSuite addressed, is our supply chain management,” Guavera says. “Now our suppliers can see what’s going on. The solution allows them to see purchase orders and other information pertinent to the business. Whether it’s a product need or a [necessary] slowdown [in production], the suppliers can act accordingly.
“On our business-to-business side, customers placing orders via the Web can see their orders, what stage they’re in or if there’s an issue. If there is an issue, of course, we normally call them first to get it resolved.”
A “Crazy” Business
The wheel business is vibrant and evolving – or, in Guavera’s word, “crazy.” During the early 1980s, wheel manufacturers around the world — including Japan, Germany, Brazil, Italy, France, Mexico, Australia and Taiwan — began to recognize the growth potential in the aftermarket wheel business. Today there are hundreds of manufacturers and importers engaged in the business.