IBM’s SAP rollout sparks business transformation for GPC Electronics

The task of replacing an inflexible legacy IT system turned into an award-winning experience for contract manufacturer GPC...

Australian contract manufacturer GPC Electronics (GPC) produces complex electronics equipment for leading global corporations including Alcatel, Ericsson, Ingenico, Nortel, Siemens, Stratex and Toshiba.

The 19-year-old company employs a staff of more than 650 at facilities in Penrith, NSW, and Christchurch, New Zealand.

GPC produces equipment including microwave radio systems; wireless equipment; optical communications products; carrier and enterprise-class telecommunications equipment and commercially complex products.

Unlike the task orientation of most contract manufacturers, GPC offers a business model based on value rather than price. It analyses a customer’s value chain to develop a manufacturing solution that enhances its competitiveness.

By assisting customers to achieve their strategic goals, GPC establishes itself as part of that value chain with greater responsiveness, overall lower cost and improved flexibility.

The business problem
GPC’s SAP business systems manager Stephen Cooper said GPC had needed to replace its inflexible legacy IT system.

“The problem was that it affected our long-term market competitiveness,” he said.

“Most of our customers are fairly large multinationals with ERP systems, so we needed a platform that could integrate with them and enable us to collaborate with both customers and suppliers.”

GPC’s legacy system had operated as a hands-off back office system. As a result, many business processes were manual, creating bottlenecks and inefficiencies as the company grew.

Cooper said an integrated IT system was critical to GPC’s global expansion.

“With an increasing focus on serving customers based in North America, we wanted to take this distance away by offering online integration to both customers and suppliers,” he said.

The IBM solution
Cooper said GPC chose IBM Business Consulting Services as its partner to assist with selecting the replacement system.

“We needed someone from the inside to help us with that process,” he said. “IBM had the business solutions expertise, the proven methodology and a track record of successful ERP implementations,” he said.

“We had heard all the horror stories about ERP budget overruns, so we were attracted by IBM’s ability to supply hardware and services around that hardware as well as its ERP expertise.”

IBM guided GPC through a needs analysis, scoping and evaluation process that eventually selected SAP´s latest software solution out of the SAP R/3 family, running on the Unix-based IBM pSeries platform, as the best solution.

The IBM eServer pSeries provided GPC with a flexible and scalable hardware platform for current and future components of the SAP Project. Sizing and Performance issues are mitigated by the use of logical partitions and dynamic memory allocations.

Because of the comprehensive groundwork conducted with GPC, IBM undertook the implementation on a Time and Materials basis, an approach that eventually delivered the project on time and eight per cent under budget.

Cooper said GPC had wanted an integrated software system and integrated hardware partner.

“We are now wall-to-wall SAP and wall-to-wall IBM, so we know who to turn to if we have a problem,” he said.

“I would recommend IBM. We had a fair bit of trust in what they were doing. We couldn’t afford massive cost overruns, so we bought their expertise and their track record and they delivered on time and under budget.”

The business benefits
GPC has received national recognition for its SAP project by winning the SAP Partner Customer Excellence Award for Best Small to Medium Business Implementation for 2003.

The project reached throughout the organisation, from weekly project meetings with GPC’s managing director and his executive team to training for 200 employees who would use the system.

Cooper said SAP had laid foundations that would transform the business during the next couple of years.

“It has transformed our IT system into a tool to do our business better and it’s starting to transform the business,” he said.

“We set up the SAP system to be flexible. We have a lot of different configurations for different customers, so SAP has multiple ways to move materials and do things.”

Cooper said SAP’s integration meant that if customers made a request, GPC could respond with real-time information rather than assumptions.

SAP has made GPC’s sales order process much more efficient with standard workflows, including reminders, and automated notifications to customers.

The integration has also delivered major gains in the 'goods inward' area, by integrating the receiving process with the quality control system.

The system supports Australian standardcompliant skip lotting that reduces the frequency of quality inspections as a supplier achieves good batch milestones.

GPC also benefited from the efficiency of automated production workflows, which enable it to act on and audit an average of 300 engineering change requests a month from customers. Mr. Cooper said this was the biggest non-customer project GPC had embarked on.

“It is a huge project that we haven’t done before,” he said. “We had to get it right – and we did.”

For more information go to  www-07.ibm.com/businesscenter/au/istart/index.html

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