ARCA cashes in on the proceeds of ERP migration

SUMMARY:

The US/Italian manufacturer of cash handling systems has achieved new levels of harmonization across its global operations with a new ERP system from Infor.

Many banks and retailers underestimate the time that their staff spend in the back office, counting and sorting coins and banknotes. That’s time that might better be spent on higher-value tasks – engaging face-to-face with customers, for example. As well as being time-consuming, manual cash-handling processes can be pretty inaccurate, not to mention risky if untrustworthy members of staff are involved.

ARCA provides machinery that automates cash handling, speeding up transaction times by counting out money for a customer withdrawal on the bank teller’s behalf, for example, or preparing cash collected by a retailer to make up a bank deposit. The company’s machines are increasingly at the heart of self banking machines in bank lobbies, too, which enable customers to make a cash deposit without the need to stand in line, waiting for a teller position to become free.

Headquartered in Mebane, North Carolina, ARCA has a workforce of around 600 people and annual revenues in the region of $130 million. In 2014, it acquired CTS Group, an Italian provider of cash, check and card automation technologies. Today, around 90 percent of manufacturing takes place in Italy. The remaining 10 percent consists primarily of customization work and takes place in North Carolina.

Make to stock

ARCA’s discrete manufacturing processes operate on make-to-stock model, where production and inventory are matched with customer demand forecasts, as opposed to make-to-order, where production is triggered by incoming sales orders. That model demands a high level of visibility across customer service, finance and manufacturing – a level of visibility, in fact, which which ARCA has struggled in the past, according to Cesare Varzi, the lead of IT at ARCA:

As our business grows, I cannot emphasize strongly enough the importance of having robust processes across our global companies and worldwide sites. In order to optimize our planning, manufacturing and logistics operations, provide high levels of customer service and capitalize on new opportunities, we needed a platform which was designed for the specific characteristics of our industry and that was scalable enough to support future acquisitions.

This is how ARCA came to implement Infor CloudSuite Industrial Machinery, based on Infor LN (previously Baan). The solution is now live across ARCA sites in Italy, the US and the UK and replaces a hotchpotch of previous systems: an SAP cloud-based solution in the States and three different on-premise Infor LN implementations in Italy on three different sites. Adds Varzi:

On top of this, the actual manufacturing execution wasn’t even in the system, but managed through Microsoft Excel and Access. When a shop order was generated, then the execution of that shop order would be followed outside of our systems. It was only when the shop order closed that we would adjust the systems to reflect that.

Mission: harmonization

The main goal, then, of the Infor implementation was harmonization across ARCA’s different business units and departments. Says Varzi:

All our different systems were using different codes for the same things. It was often hard for us to understand each other in the business. There were duplications and different attributions for the same item, for the same customer, for the same supplier. That was a major concern.

The migration to the new CloudSuite was a nice challenge from the IT point of view, but even more important from the harmonization point of view – harmonized processes, harmonized codification, harmonized attributes, all these things.

Key users in different locations were recruited in the harmonization effort, assisted by Infor consultants. The work involved a great deal of data extraction and data comparison, and a cycle, as Varzi puts it, of:

…review, review, review.

The biggest challenge, he says, lay in standardization of item data. While the company has around 1,000 customers and 1,000 suppliers, the number of items – components and so on – to be harmonized was closer to 100,000, says Varzi:

So in this case we took a very strong decision to clean everything up and use as the basis for item and bill of material [BOM] codes the codes already assigned to them by their original manufacturers. This did a lot to facilitate the process because we were able to give priority to manufacturers’ codes in leading our harmonization of item master data.

The project kicked off in August 2016, with the blueprint design taking 8 months at the start. ARCA went live on Infor in Italy in October last year and in the US this January. It’s early days, but the benefits are already becoming clear, says Varzi:

We’re using the same tools, the same codifications, the same database, which is really helping to avoid duplication and misunderstanding. Infor LN also has nice features for intercompany communications, so that’s saving a lot of time, too. From a planning point of view, a customer order in the US is already seen as a forecast in the plant in Italy and, vice versa, inventory available in Italy is immediately available to US people, so we’re really working on a global system and that gives us a lot more visibility, which leads to better decision-making.

Most important is that we’re all working as one team. And in some cases we’ve been able to cut out some roles that were duplicated because of the different systems. These were roles that are now centralized in either the US or in Italy, because having the same system means we only need one person to optimize inventory levels worldwide, for example. It’s very easy, compared to the past.

Image credit - ARCA

Disclosure - At time of writing, Infor is a premier partner of diginomica.

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