Logistics Firm Deploys ERP System
Lawrence D. Casiraya
CW Senior Reporter - April 24, 2006
By deploying an enterprise resource planning (ERP) system, logistics firm Royal Cargo Combined Logistics Inc. is able to tie up its recently established manufacturing business with existing logistics applications.
The company's Royal Cargo Food Processing unit deployed manufacturing, financials, and distribution solutions from QAD, a US-based software firm that makes ERP solutions targeted at mid-sized companies.
Royal Cargo invested around P5 million in software licenses and services, according to Information Managers Inc. (Infoman), which handled the project as local distributor of QAD's MFG/Pro ERP suite.
"We are harnessing the power of IT to better manage all aspects of our business from procurement, manufacturing, operations, sales and marketing, distribution and customer services," said Elmer Sarmiento, chief operating officer of Royal Cargo Group of Companies. "While we do very much recognize the need for manufacturing software, our priorities last year were on machinery and facility."
In focusing on its new manufacturing business, Royal Cargo is outsourcing some of its IT processes including the development of software applications to automate production planning, execution, and costing activities.
The ERP project started in July 2005 and Infoman was given four months to get the system running in time for the opening of Royal Cargo's food processing business at the start of this year. Thus, the project called for rapid implementation of around 20 different modules.
"Ordinarily, ERP implementations start with financials. In Royal Cargo's case, we had to start installing in manufacturing due to the requirements of the business," said Martin Lopez, Infoman's QAD business development manager who handled the project
Royal Cargo, which operates manufacturing facilities located in the province of Laguna, about an hour's drive from Metro Manila, does contract manufacturing for export for American food company Perdue Farms Inc.
Faced with a "non-negotiable" deadline, Lopez said his team initially wanted a "big bang" approach, which meant implementing all modules at the same time and integrating them while the deployment progresses.
However, his team soon found out that implementing the system in phases works better. While the system has gone live as early as December, there is still ongoing implementation of some financial modules because these need to comply with local regulatory requirements
While implementation was ongoing, Lopez' team also needed to train Royal Cargo's own personnel to handle the system. "We made sure that all critical processes were automated before December and that their (Royal Cargo) team can run the system on their own starting January," he said
The ERP system is designed to generate analytical reports and upload data into Royal Cargo's existing logistics solutions. Lopez referred to the project as a "vanilla" implementation, which means that little or no customization was done on QAD's packaged ERP product.
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