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Synchronising Swagelok factory with its supply chain

To modernise its supply chain, Swagelok sought a solution provider to help reduce inventory and personnel costs while maintaining its levels of service.

Swagelok had concerns about its legacy systems, and found that JDA met its needs in that area as well. “We were questioning whether to update to a new ERP system or to put something on top of our old one,” said Swagelok’s Director of Supply Chain Planning, Greg Houdek.

“We chose to put JDA on top of our old system after they presented us with a strategic opportunity assessment.”

The assessment was a bottom-up diagnostic scan conducted by JDA consultants to identify how Swagelok could improve business performance by defining a results-based plan to deliver significant improvements in a short period.

When Swagelok began its JDA implementation, the manufacturer had 26 facilities, with one or two schedulers in each building and a plant manager running each facility.

This meant that more than 50 decision makers were operating in their own silos, none of which seeing the full demand picture.

“They couldn’t see where all of the requirements were coming from,” Houdek said. “As a result of implementing JDA solutions, we were able to make better production planning decisions with less scheduling and re-scheduling transactions. That was a big benefit.”

Prior to the implementation, Swagelok had in place processes called “auto quote” and “auto order enter.”

As requests for quotes came in from distributors, the systems would access Swagelok’s legacy system and provide a response based on product and component availability.

“If our fulfillment strategy for a distributor is make-to-order, the JDA system creates a quote based on availability of material and machine capacity,” said Houdek.

“If it is make-to-stock or configure-to-order, we have other service targets in use. We’ve passed that information on to our distributors, thereby giving them an expectation of availability. In turn, our distributors have been able to lower their own inventories”.

“We eliminated about 50 per cent of our assembly WIP [work-in-process] because we eliminated the lot size.

“We found that the new algorithms in JDA Supply Chain Planner did not need the lot sizes we had been using in assembly.

“In addition, we decided to let JDA Supply Chain Planner determine variable requirements, which allowed for the assembly WIP reduction.”

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