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Cataler handles expansion with Dynamics AX
18 December 2013
When Cataler, the parent company of Cataler North America and a subsidiary of Toyota, forecast increased product demand that would necessitate expanding production capacity by 40%, general manager Al Alvarez knew the time had arrived for a stronger and more agile enterprise resource planning (ERP) solution that would scale easily well into the future.
“This was an exciting time – we were about to grow into the largest company within the corporation,” Alvarez says. “But our ERP system forced us to work inefficiently. We needed enhancements to handle the expansion.”
With the previous ERP system, employees still relied on local spreadsheets to manage many business processes. Cataler staff thus expended extra effort by manually entering information back and forth between the ERP system and the spreadsheets, while constantly verifying that they had the most current data. Dozens of spreadsheets supplemented almost every key function because it was easier than working within the previous ERP system. Alvarez realised that application consolidation – bringing the spreadsheet data into a centrally managed ERP – would play a critical role in improving the efficiency of Cataler employees.
As Cataler researched replacement ERP systems, Alvarez sought a solution to specifically track and provide inventory management for the chemicals and precious metals that play key roles in the manufacturing process. Alvarez found most solutions can’t effectively track inventory when the manufacturing process changes the physical state of the inventory such as from wet to dry.
“This is unique to our business,” Alvarez explains. “Many chemicals morph during manufacturing so we need to track a single part number as they transform both ways – from dry to wet and vice versa.”
Cataler narrowed down its list of solutions to consider, taking various solution providers through its business processes and operational requirements. Microsoft solution provider mcaConnect impressed Cataler by devoting 40 hours of due diligence to produce an extensive study that recommended Microsoft Dynamics AX.
“Cataler is a world-class automotive supplier with unique manufacturing processes. These unique processes made inventory traceability and costing a challenge,” says Geoff Lewis, regional sales director at mcaConnect. “Our team was able to combine our automotive experience with the experience we have gained in other complex manufacturing environments to model a solution that will help Cataler meet the explosive growth it is experiencing while gaining the controls necessary to ensure profitability.”
“mcaConnect offers in-depth ERP experience within the automotive industry,” adds Alvarez. “They showed us how Microsoft Dynamics AX provides a greater range of capabilities and more flexibility than SAP, the other solution we considered.”
Alvarez also felt more comfortable deploying a solution based on Microsoft technology: “Because of its use of open standards, Dynamics AX works well with third-party systems and lets us easily import data from our existing Excel spreadsheets.”
Beyond the rich functionality that AX offers out of the box, Alvarez considers Microsoft Dynamics AX to be a toolbox that Cataler can use to adapt to meet the changing needs of the business, as opposed to other ERP systems, which Alvarez says would “force us to adapt our business. Conversely, we can customise Microsoft Dynamics AX to the way we work.”
Although Cataler benefits from the flexibility to adapt Dynamics AX, Alvarez does not expect to need to significantly customise the solution because it meets more than 80% of itsERP requirements right out of the box. “We need to customise for tracking precious metals and chemicals, and the technology gives us this freedom,” Alvarez says. “That is the key reason we chose Dynamics AX. We could not find another solution that offers this capability.”
“Being able to effectively manage the unique chemical characteristics of its inventory was a critical success factor for Cataler Corporation” says Bill Moffett, manufacturing industry senior product marketing manager for Dynamics. “Legacy applications don’t easily allow for this type of manufacturing operational flexibility.”
The company will use Dynamics AX end-to-end for manufacturing processes as well as finance, quality control, production control, purchasing, shipping and receiving, and EDI.
The user-friendly attributes of Dynamics AX also play a key role as Cataler plans to add additional system transactions to the manufacturing process. “Our previous system was hard to work with,” Alvarez explains. “We can now streamline processes – even with the additional transaction entries we are adding.”
Alvarez also projects the company will reduce most manual-entry mistakes that occurred when moving information back and forth from spreadsheets. “By deploying Microsoft Dynamics AX, we will find more efficient ways to execute functions within finance, the supply chain, production administration, and quality control,” he adds. “We can also analyse production capacity to a greater extent. This should lead to improved production scheduling that will help us handle the expected 40% production increase.”
“Microsoft Dynamics has truly enabled a ‘power shift’ to consumers with rich manufacturing industry capabilities, a user-friendly interface, and a technology platform that enables low TCO requirements,” adds Moffett. “Cataler is a great example of how Microsoft Dynamics helps bring together both people and information to deliver an amazing customer experience.”
Melissa Cook, manufacturing industry senior director for Dynamics, explains why manufacturers are increasingly opting for Dynamics AX to meet their business needs. “Our customers are coming to us because they want more flexibility in their manufacturing systems,” she says. “In order to succeed in this very competitive global environment, manufacturers know that they need business solutions that can easily adapt to changes in their product offerings, customer demand and the supply chain, and more importantly, to quickly take advantage of opportunities in new and emerging markets. We think Microsoft Dynamics is very well positioned in the manufacturing application space, providing a low TCO, fast time-to-value, easy-to-use solution that increases our customers’ ability to adapt to change and connect and optimise their operations.”