“We can compare costs between
each facility, wherever it is, and
make the best decisions about
manufacturing.”
efficiently, letting the company
truly build anything, anywhere
based on capacity, regional
demand, and cost.
Tudor stresses that the benefits extend beyond reduced
cost and increased access to
new markets. He says this
approach also improves quality.
“In the past, if we needed to make an engineering change,
we would have to utilize a manual process to make the bill of
material the same,” he says. “Today we don’t have to do that.
The group now operates from a global set of items and bills
of material, which allows Eaton to operate engineering centers in
different places—all working on the same system, on the same
database master. Eaton executives can manage globally for cost,
quality, and compliance, and can balance production across the
globe. “You can optimize your production the same way you can
optimize your logistics when you produce a particular product
that can be sold in different parts of the world,” says Lima.
Randrianarison agrees. “When you have one unique process,
you don’t need to reinvent when you grow,” he says. “For
example, we have a new facility in China, and we can just implement the same Oracle solution there that we have everywhere.”
—Patrick Randrianarison, President, Eaton South America and VGSA
nates the need for comput-
ers or terminals on the shop
floor previously required for
manual inventory movement.
A scanner reads the item bar
code and automatically relays
the information to the supply
chain system, giving manag-
ers a clear, accurate view of
their resources at all times. This allows them to reconfigure and
optimize the floor layout as production priorities change, not to
mention providing “almost real-time inventory control, 24/7,” as
Lima puts it. “That helps reduce discrepancies on inventory,” she
adds, and it ameliorates the shrinkage problem.
TAKING STOCK
The Oracle single instance not only supported the implementa-
tion of “build anywhere” but also improved Eaton’s ability to
serve customers. According to Randrianarison, on-time delivery
of the VGSA products improved from 60 percent in 2009 to 90
percent and above in 2010. It’s a point that Tudor corroborates:
“We increased our on-time delivery by four times at one plant.”
This is, in large part, because Eaton managers can count on
a unified repository for enterprise data to see exactly what a
customer needs. “Change management is easier; bill of materials
management is easier; we can compare costs between each facil-
ity, wherever it is, and make the best decisions about manufac-
turing,” says Randrianarison.
According to Tudor, the single instance removed about 30
percent of those growth-constraining, resource-draining customizations from Eaton’s global technology stack, and about 60
percent from the Brazil-based VGSA. Indeed, Tudor says, during
the implementation 56 percent of the data on customers found
to be inactive was purged from the database, and 75 percent
of the inactive supplier data was also purged. This led to gains
in productivity as well as an increase in accuracy. Overall Lima
estimates that Eaton has realized about US$700,000 in annual
savings with the Brazil implementation.
These improvements also allowed Eaton management to
repair one of the VGSA’s persistent inventory problems: shrinkage. The VGSA could retire the spreadsheets and receive data
through EDI, allowing managers to optimize transactions on
the shop floor using bar codes with the Oracle Mobile Supply
Chain model. According to Lima, the use of bar codes elimi-
A SINGULAR SUCCESS
The savings and business opportunities the Truck Group has
reaped from a single-instance implementation are impressive. But
Randrianarison lights up when he discusses the transformation
of the group’s business processes, the promise of global growth
that transformation holds for the future, and the way the project
supports Eaton’s customer-focused ethos. “Now,” Randrianarison
says, “we can see exactly what our customer needs. I’d say that’s a
tremendous driver for customer satisfaction.”
The project also helped cement the relationship between IT
and the business, Randrianarison says, as together they have
experienced “the birth” of the new system. And he expects that
closeness to continue. “If, for example,” he says, “there’s an
EDI issue, the business team understands what the issue is and
the IT team knows its impact on the business. Now there’s a
common language, a common understanding.”
Indeed, Randrianarison plans to keep the core of the single-
instance project team together to leverage their hard-won
experience and expertise. “We’re not finished with the single
instance,” says Randrianarison. “We still have some facilities
using a different ERP. So the goal for the next two years is to
have everyone using Oracle. And now when we implement
Oracle solutions, it will be easier because we have that core
team capable of doing the job quickly.”
And, Randrianarison adds, “today, when we have an issue,
it’s not a Brazilian issue, with limited resources to resolve it. It’s
a global issue. And because it is a single instance, we can get
support from other countries to resolve it.”
Most importantly, Randrianarison concludes, the single
instance “makes us more agile. It makes us more global.” <>
DAVID ROSENBAUM, the former editor of CIO magazine, frequently writes on
technology topics.
>> FOR MORE INFORMATION
Oracle Solutions for Manufacturing
oracle.com/us/industries/industrial-manufacturing
Oracle E-Business Suite
oracle.com/us/products/applications/ebusiness
