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Although we’re still facing some difficult market conditions at the end of the first quarter, we’re seeing impressive progress in a lot of areas.
The areas we’ve focused on this quarter, and will continue to pursue, are part of GIW’s eight primary objectives.
- Secure a reliable supplier base overseas.
- Meet cost-saving targets in our supply chain.
- Improve on-time delivery to customers.
- Improve our internal scrap rate.
- Minimize the defect rate for customers.
- Optimize inventory.
- Reduce lead time.
- Commission the new foundry and distribution center.
We spend a lot of time thinking very clearly about these objectives, and thanks to SAP, we’re now able to track them with amazing precision.
SAP is producing results
SAP is increasing transparency and providing insight into our processes like we’ve never had before, and because we’ve been committed to implementing it in a reliable, focused manner, we’re already seeing tangible results.
For example, inventory reduction is very closely aligned with SAP. With no extra effort, we can now directly measure our inventory levels every month. We’re also getting a better handle on order management, as we can see what is upstream almost instantly. This allows us to be more exact with pricing and optimizing orders.
Additionally, SAP is helping us meet cost-savings targets. We get a daily spending report that reflects exactly how much we spent at each plant, along with the top 10 orders, so we know precisely where our money was spent and on what.
Another fascinating and beneficial way we’re using SAP is to help us take a closer look at how we use materials for melting. We used SAP to create a study to show the cost-effectiveness of using recycled materials from our customers versus virgin materials. The study shows that buying back worn-out materials from our customers and re-melting them yields vastly larger savings than buying new, which means we can focus our energy on targeting recycled products.
The best part about all of this information is that it’s helpful to everyone: We see the benefits in the inventory and materials sides immediately as well as a true hard savings in the bottom line at the end of the month.
A lot to be gained
Even though we’ve only had SAP at our fingertips for a short while, we can already see that this technology is making us more efficient end to end. Not only does all of this newfound transparency increase value for our customers but it also helps us make much better decisions without surprises.
We can say with confidence that it’s paying off: Our financial results are more than respectable for the first three months, which isn’t necessarily the case for other companies in the current market! That is something to make everyone proud!
Another source of pride is the new foundry, which will be commissioned and begin production this month. Of course getting it online and in sync takes a spectacular amount of coordination, but we’re on track for success.
This continued success is, in large part, due to our workers’ ongoing dedication to growth and learning. We’re closing in on the last two months of training courses for shop employees and management. We’re looking forward to celebrating the past years’ worth of progress and deciding which learning opportunities are coming next.
As we round the corner into the second quarter and remainder of 2016, I’m remarkably impressed and hopeful. There’s still a lot to be gained — as we all know, it’s a journey that never ends — but compared to last year, I’m very excited. We’re making great headway on our company objectives, and thanks to SAP and visible commitment from the entire company, I fully expect to have another successful year.
Thomas H. Mueller
P.E. Vice President of Operations
