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Red Devil slashes MIS costs.

John Coff's goal when he joined Red Devil in 1988 was to reduce the MIS budget from 2.2% of sales to 1.5% in five years. Now, three years into the project, Coff has cut the MIS budget to 1.8% of sales, and cut inventory by $2 million.

With a manufacturing system that will be 100% user driven, Red Devil is well on the way to exceeding its goal, and plans to have MIS spending at 1.2% of sales by the end of this year.

Red Devil is a $50 million producer of sealants, caulks and hand tools for handymen and remodelers. When Coff came on board the 120-year old firm, he took a long look at the aged IBM 4361 VM/VSE running the manufacturing operation, and the antiquated order entry and accounting setup and decided the system was ready for a little remodeling itself.

"Red Devil's system had been pasted together over the last 20 years," Coff explains. "We had to step back and bring everything up to date. Too much energy was spent on manual intervention just to keep the system running."

Now, with downsizing from a mainframe to a client-server environment and the implementation of CIIM on Oracle from Tucson, Arizona-based Avalon Software, Red Devil has reduced inventory of over $2 million, decreased inventory variance by 50% and cut MIS spending to pre-1988 levels.

The firm has two manufacturing facilities: Union, N.J., for tools; and Pryor, Okla., for chemical products. Neither had accurate physical inventories. Accounting, for instance, was not linked to manufacturing and all data had to be manually entered into the financial system.

Red Devil had to keep tighter inventory control. The decision to downsize systems and create an open Unix environment running on a relational database was inevitable.

"To me, these are the cornerstones of information systems today," says Coff. "We had no choice but to change the system." The challenge was in finding software to track inventory and resources both at Union and Pryor, and to integrate financial activities into the manufacturing process.

Red Devil went on-line in August 1989 with CIIM on Oracle's payroll and general ledger modules. Since then they have added modules for materials resource planning, master scheduling, inventory tracking, generating a bill of materials, purchasing transactions and accounts payable.

Now, up to 45 people from both plants, including shop floor supervisors, shipping personnel and accountants can access and modify the same set of data, eliminating the need to input the same data into different systems.

Customer orders are received through EDI (electronic data interchange) and processed automatically.

"When I came to Red Devil the MIS group had six programmers," Coff notes. "Now we only need three."

One of Coff's key concerns was training personnel to record transactions as they were initiated.

"This company was not accustomed to getting on a machine, reporting transactions and seeing immediate results. Instead, they were used to overnight batch transfer. In our new environment, they had to adjust to real-time reporting and automatically available inventory."

"The system is reliable, quick and allows me to retrieve info the way I need to see and use it," says production supervisor Wilfred Waldner. "I now go to one central source for detailed information about all the materials we need for production."

Now, instead of a partially installed IBM Copies MRP system, along with several file-based, homegrown applications, Red Devil uses an AT&T Pyramid Model 7040 host running Oracle RDBMS, connected to a Star Server. Up to 45 users can simultaneously use the system. When more power is needed, Coff plans to allocate about $30,000 for a new Star Server instead of $133,000 for an added mainframe processor.

Most importantly, Red Devil is able to produce products such as Lifetime Caulk, One Time Spackle and Red Devil Putty Knives as the market demands them.

"Our fill rate is approaching 99%," says Coff. "We're shooting for 100%. That's hard to beat."
COPYRIGHT 1993 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:management information systems
Publication:Communications News
Date:May 1, 1993
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