ERP solutions for the cable and wire sectors
As the magazine “Kablo Tel Dünyası” we shall deal with one of the areas which the sector feels the lack of in this issue. There are many ERP (enterprise resource planning) programs in the market. However a great majority of the existing programs are products which address different sectors and do not meet the needs of the cable and wire production exactly. In this issue of our magazine we have made an interview with the general manager of Konsept Bilişim Sistemleri, Mr. Süha ÜNAL.
What is ERP program? Why should ERP program be used in an enterprise?
Exact wording of ERP is enterprise resource planning . ERP (enterprise resource planning) is the general name given to the integrated management systems which ensure the efficient use of resources such as labor force, machinery, material etc., which are required for the production of goods and services in an enterprise. Taking into consideration the fact that ERP applications were used as MRP/ II in its initial years in our country, we may say that ERP has a history of approximately 20 years in our country. While ERP shall find solutions for your problems and provide agility and flexibility for your company by determining your corporate needs and goals, it shall also assure an advantegous position for your company against its competitors. It manages the inter-departmental coordination successfully, increases your efficiency and helps you in reaching your targets in the market by means of the integration of the most suitable solution for your corporate structure.
ERP ensures you to make information exchange by means of a common database for your enterprise . Thanks to that common information system all the information required are provided to the employees of the enterprise. In the classical system each of the departments operates with computer systems which are compatible with their work flows. ERP makes it possible for numerous departments of which operatinal features and needs are very different from each other to share information easily in communication with each other by integrating the said differences in such a manner that they are operated by means of an integrated software architecture using a single database. If this approach of an integrated structure is set up and implemented within the enterprise successfully enormous return on investment shall be obtained for the enterprise in the positive sense.
Do ERP programs differ depending on the sectors? If we adapt that question to the cable&wire sector, can every ERP program be used for the cable sector? The structure of ERP programs are generally the same. There are modules like accounting, stock and production in all of them and the existence of these modules is not an extra feature of the relevant program. However not all the ERP programs can cover the special concepts used in the production and sale of cables. While deciding on an ERP program, special attention must be paid to this kind of features which are specific to the sector.
What kind of differences are you talking about? Could you please explain this in some detail?
For example there is a concept called LME price regarding the sale of cables. Under normal conditions of trade the good or the service that you sell has a definite sale price. You quote a price to your customer by saying “the price of the good A is X TL”. In other words everything is open. This is a kind of sale that can be effected by means of any type of ERP. However the situation is not always so as far as the sale of cables is concerned. When you want to make a sale on the basis of the LME price, in other words when you shall sell copper and aluminium by adding a profit on their price in the London metal Exchange, you can not enter a net sale price in the system . For example you must be able to quote a price to your customer on the basis of the “Average LME price during the week of shipment” and it is not possible to do this with all ERP programs.
Or you may sell a spool, which you had produced as 10.000 m as a whole, in pieces by cutting those pieces from the original product. A default that may arise in one piece that you had sent to your customer may cause vitally important problems in the future . For that reason your ERP system must be able to give you detailed information in the future about the spool from which the sold pieces have been cut off, production and raw material details about that spool and the customer to whom pieces from the same spool have been sold, shortly all the information about the past of those pieces.
Yoır ERP program must at the same time be able to make cable design. You normally know what amount of raw material and semi-finishe products like conductors, insulators etc. have been used as the components of the cable that you produce and enter those values in your ERP system . Then we must ask the question: Must a cable producer always sell the same products? Is it not possible that the producer wants to diversify its range of products and produce different types of cables? Or how shall the producer fix the cost of a product which he hadn’t produced before but now wants to give a price quotation for? Just at this pont you will enjoy the confidence and easiness that the ERP program specifically designed for the cable sector provides to you. I want to ask you in the name of informing our readers.
What other factors must be paid attention to before deciding about an ERP ?
An ERP investment is an investment which bears upon the strategy to be followed by the enterprise in the future in the first degree . It is not a kind of investment about which one can say “I try it and change it if does not function as I wanted”. Consequently each module has its own specific details to which attention must be paid. Many headings may be opened in this context like working with companies outside your enterprise, being able to see your offers and production at home and abroad and the suitability of the barcode system for the cable sector etc. Our readers who would like to have more detailed information may always contact me through my email: or phone no.: 0532 312 45 99.
What is the cost and the process of commissioning of an ERP program ? Could you please give some information about this?
Cost is a value that differs from program to program . However cost is not the first criterion which is to be taken into consideration in this regard . Because a good ERP program recovers its cost in a very short time at any rate. Today competition is proceeding on a very sensitive line. Flexible profit margins do not exist any more as before. For that reason the correct calculation of the cost of a product ensures the growth of the enterprise , otherwise the enterprise may collapse. At this point a correct ERP program clears the way for you. To give an example : Let’s say you will bid for a tender. You must calculate the cost of 1.000.000 m of “product A” very well because if you overprice you will loose the tender while you will incur loss if you underprice. A difference of 1 TL/ m shall be reflected as a loss of 1.000.000 TL to you. For that reason ERP program may pay for itself multifold even through a single business provided that the product is good and correct definitions have been made.
If we come to the process of commissioning of the program : This is a matter which has to do with the extent to which the enterprise wants ERP program. Processes such as the preparations to be made by the enterprise , installation of and training about the system etc. would normally cover a period of six months. The employees resist against such programs at the very beginning and their initial approach is negative . People feel as if they are forced to adapt themselves into a definite mold and that the program shall snatch their position in the enterprise . And this factor makes the initial installation of the program difficult. However it has always been observed that the personnel members who had initially tried to defend themselves against the program would embrace it saying “This program is my hand and foot, do not touch it” once the program has been started to be used.
Finally, do you want to add anything to your statements above?
ERP is one of the most important investments in an enterprise . All big enterprises in our country and all over the world are proceeding ahead by using ERP . Otherwise it wouldn’t be possible for the bosses and managers to monitor tens of factories, thousands of employees and tens of thousands of products and keep them under control . ERP seems to be a luxury item and toll for a boss who has the mentality of keeping everything small for being able to control everything personally on site. However if a boss wants to compete and take root in the market and let himself and environment as well as his country make a gain then he/ she must use ERP . İndividuals may commit errors, may feel ashamed against their boss and may even treat people differently depending on their status but computer products are clear and explicit. They say you “there is a loss” if there is really a loss. If there is anything which is going bad they show the situation as it is and ensures that the necessary precautions are taken before it is too late.
Thank you