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Instrumental success for local manufacturer

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SGE International is an export success story. Manufacturing in a highly specialised industry, this Australian business has become a leader in a field of global competitors.

The company produces consumables, accessories and components for chromatography and analytical instruments.

Founded 36 years ago, the company now has two modern manufacturing facilities. Both are based in Australia and employ 250 people. The manufacturing plants make over 2,500 different products, which are sold to instrument manufacturers, end-users and distributors through SGE's nine sales and distribution centres located around the globe.

Managing the rapid growth and overseas expansion has at times been challenging says Peter Dawes, SGE International's MD. "Our success had been in part due to our commitment to excellent customer service and fast turnaround, with high availability of stock items. Maintaining this with a rapidly growing product range and customer base put a lot of pressure on cost control, especially considering we had over 30,000 active parts to manage. While the company had invested in IT systems, they were essentially for sales order processing and accounting processes."

Glenn Clivaz, director of operations, said the manufacturing side of the business previously had little information technology to support its activities.

"The company has since implemented an ERP solution from Mapics . We now have one central system managing sales, accounting and manufacturing information," he said.

After two years of using the ERP system, SGE International has achieved many improvements in bottom line business performance including a reduction in raw materials stock, a 25% reduction in the number of active parts required, fewer material stock shortages and an improved ability to meet customer demand.

According to Clivaz, the biggest impact so far has been in accurate delivery dates for made-to-order products. "In the past, we couldn't easily check whether inventory was allocated for other production runs, so some end-customer orders were not fulfilled, as promised.

The ERP system now provides us with much greater accuracy for quoting delivery dates. This gave us the confidence to buy out a Californian company that primarily make-to-order, and relocate it to Australia. As a result our make-to-order business has gone up by factor of four."

While many companies today question the return on their ERP systems, especially the implementation process, Clivaz says the biggest challenge in implementation is the need to change business processes.

"We spent a lot of time training our people in the theories of production planning to ensure they have the skills and knowledge to implement the processes and use our new system. I don't think the implementation would have gone so well otherwise".

The Mapics system was implemented using a phased approach, with general ledger and accounts payable first and the inventory and manufacturing later.

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