2005 Supply & Demand Chain 100 Case Study  KUKA Robotics, Corp./Sage Software

Profiles in Supply Chain Enablement: A leading robot manufacturer automates its processes by deploying a state-of-the-art enterprise information backbone.

Profiles in Supply Chain Enablement: A leading robot manufacturer automates its processes by deploying a state-of-the-art enterprise information backbone.

Company: KUKA Robotics, Corp. (Clinton Township, MI)
Company Size: Medium
Company Sector: Machinery
Area(s) of Enablement: Order/Demand Capture, Sourcing, Procurement, Fulfillment/Logistics, Supply Chain Integration & Infrastructure, Decision Support
Enabler: Sage Software (Irvine, CA)

SDCE 100 2005Case Study: R2D2's brethren are rolling off assembly lines at KUKA Robotics Corp. Its parent, KUKA Roboter GmbH, is the world's leading manufacturer of PC-controlled robots. KUKA's robots pack cases, load pallets, test force and torque, cut and remove material, weld, and even help destroy tumors with radiation.

"We assemble modular and special-purpose robots for general industry customers as well as corporate giants like General Motors (GM)," explains Eric Haase, vice president and CFO responsible for logistics, assembly and finance at KUKA Robotics Corp. "With our mother company in Europe, supply lines run long. It is not uncommon for customers to change specifications while units are already in transit or final assembly. Also, companies like GM have high record-keeping requirements. So we needed an integrated system to deal quickly and efficiently with customers' needs while keeping track of data."

KUKA Robotics wanted to introduce a state-of-the-art enterprise resource planning (ERP) system as its information systems backbone. In addition to complying with international reporting requirements, the company also was looking to eliminate cumbersome paper-based processes in logistics, product assembly and accounting. The company's previous DOS-based accounting software and manual business systems were creating accounting and logistics headaches.

Requirements

In addition, while most manufacturers use work orders to track production, this did not fit Kuka Robotics since the assembly process at the robot manufacturer more closely resembles a complex project. The company needed job cost functionality to manage the assembly of each robot as a unique project, complete with component requirements and costing.

Ultimately, KUKA Robotics elected to deploy MAS 200 for SQL Server, an ERP system from Sage Software (formerly Best Software). The MAS 200 package includes a selection of solutions covering accounting, financial reporting, distribution, manufacturing and e-business management, all running on a client/server platform. The implementation took about six months to complete.

Today MAS 200 manages KUKA Robotics' general ledger, payables, receivables, job costing and other manufacturing functions, and also aligns with the parent's global business model. "MAS 200 provides one place to get to the information we need, to respond to customers' requirements and make sure changes are immediately visible throughout our corporation," says Haase.

Job Cost Monitors Robot Creation

MAS 200's Job Cost module tracks cost and revenue information by project, component prices and labor time and monitors special logistics efforts. Another MAS 200 module, Business Alerts, notifies sales personnel via e-mail as soon as orders are shipped to assist with collections. Employee labor hours are posted against jobs on a daily basis using TimeCard automatic data exchange with Job Cost for more accurate projections of daily costs.

Enhancements made by KUKA Robotics' reseller pinpoint where specific goods are in the assembly process, permit precise job scheduling and allow shippers to reference multiple sales orders in different currencies. Haase gives his resellers top marks for superior customer service. "Their skill resulted in a higher level of confidence in the application itself," he says.

In addition, KUKA Robotics uses MAS 200 for various types of analysis. "We can calculate profits by robot or product type, customer type, key account or market," Haase notes. "We can easily break out automotive versus non-automotive customers, for instance, and distinguish between robots, options and customer-support-related business."

Marrying Robots and Robot Options

A multicurrency module integrated with MAS 200 has streamlined the currency conversion process for KUKA Robotics. "We can now reflect the 'marriage' of imported and locally purchased components, which are sold in different currencies but scheduled and shipped as one final product, and calculate profitability with greater precision," says Haase. "The system also makes it much easier to interface with our parent company for group reporting purposes."

Haase credits MAS 200 with improving data availability throughout the organization. "We have a better handshake between departments, because everyone can access timely, accurate information," he notes. He cites improvements in customer support and collection activities now that employees can review invoice and receivables data when talking with customers.

"MAS 200 improves the way people interact and frees up resources in finance and administration," says Haase. "Data entry occurs in a more disciplined fashion. Standard reporting is executed more efficiently. Invoicing is streamlined, which means revenue can be realized faster. And we have become more responsive to both our customers and our parent company. MAS 200 gives us a state-of-the-art information backbone to build on, so we can expand with other modules as needs arise."

For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.
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