Sticking with the old classics is not necessarily good business strategy when it comes to book manufacturing.
Webcom Ltd., a Toronto-based custom book producer, found this out when its aging IBM AS/400 sever could no longer keep up with the company’s growing operations.
The company has now implemented a custom collaboration application that it says has improved efficiency and is saving it hundreds of thousands of dollars every year.
Until this rollout, however, the company relied on a 16-year-old AS/400 system. “[It] couldn’t communicate effectively with our 17 other computer systems,” said Mark Delvecchio, information technology and enterprise resource planning (ERP) business manager at Webcom.
Delvecchio said the IBM server, a mid-rage favourite first introduced in 1988, worked well but failed to scale up as Webcom’s operations grew. This resulted in a disconnected flow of information that impeded staff collaboration, and led to inefficient manual processes being used for several key operations.
In 2003, the company embarked on a three-year IT strategy that involved collaboration with Ideaca, a Canadian technology consulting firm. The project resulted in the development of a custom collaboration application dubbed POEM (Production Order Estimating Management).
Automation of the estimation process by POEM and other efficiencies achieved by using Microsoft business management system resulted in saving of $250,000 annually, according to Delvecchio.
Founded in 1975, Webcom is an independently owned Canadian company credited for a number of innovations in the printing industry. For instance it was the first printing firm in North America to use ultraviolet coatings for book covers and among the first firms to offer Web offset printing and a lay flat alternative to perfect binding.
The 300-employee company produces 50 million books annually. In recent years, Webcom found other companies beating it to lucrative contracts because employees were often bogged down by cumbersome manual processes such as estimating price quotes.
Like the majority of Canadian mid-sized businesses, Webcom’s management found itself in a quandary when considering how technology could help the organization’s growth.
Mid-size companies typically do not have a huge IT team that can help them map out technology-based strategies, according to Davide Vigano, general manager, mid-market marketing, Microsoft Corp.
“These companies compete in the global market, but they typically have an IT staff of two or three,” said Vigano.
Decisions regarding technology purchases in mid-sized companies are also hampered by budgets that have to be balanced against other demands.
Recent surveys show that executives of small and medium scale businesses (SMBs) in Canada are aware of the importance of technology in their organization but find other issues such as staff retention more pressing, said Eric Gales, vice-president, small business, Microsoft Corp.
“The question usually [boils] down to something such as: will I buy a new server or purchase a new delivery truck?”
Gales said most companies want to invest in IT after they’ve achieved growth, rather than put money in IT to help their organization grow.
Delvecchio identified three main areas where the company’s IT system negatively affected productivity: order entry, pricing and manufacturing.
He said sales representatives manually recorded order information on two-part carbon forms. This process resulted in different interpretations of an order’s value. Generating a quote also took several days to a week.
On the manufacturing side, the AS/400 performed rudimentary material routing and created a few work orders, but couldn’t handle the work flow very well, Delvecchio said. This was always on the back of employees’ minds and the workers coped by delivering the work orders and executing other steps manually.
Webcom decided upgrading to and IBM iSeries system would be too costly. Delvecchio said they also had no intention of finding “another expensive COBOL programmer” to replace the developer who was the only employee capable of supporting the existing system.
In 2003, Webcom realized it did not have the expertise to tackle its complex problems and turned to Ideaca.
Richard Iwasa, consulting manager with Ideaca, said one of their first steps was to replace the Webcom server and install Microsoft’s resource planning software Navision Version 3.0.
The accounting and inventory modules of the product acted as the catalyst for change. “Navision was easy to use, cheap and simple to maintain. It was an excellent beginning,” said Delvecchio.
Ideaca, a Microsoft partner, worked with Webcom executives and employees in a three-year project that saw the development of the management application called POEM.
Using this application, sales representatives were able to collect data about customers in a consistent format, said Iwasa.
The software calculated prices based on customer specifications and provided cost breakdowns. Poem also created project plans that assisted managers and staff with material allocation.
Work orders were generated and delivered electronically to desktops in the appropriate departments by POEM.
Using Webcom business rules, POEM also help prepress staffers determine the most efficient layout of pages on the press for content submitted by customers.
The project eventually saw the deployment of a Micorsoft ASP.Net Web application using Microsoft Visual Studio.Net powered by a mix of Windows 2000 server and Windows Server 2003 operating system.
Webcom also rolled out Office Professional Edition 2003 and all employees had access POEM via the company’s intranet. The system’s reporting tool meant the whole lifecycle of a book project could be tracked and updated accurately.
The automation resulted in a streamlined operation that allows staff to concentrate on delivering better service Delvecchio said.
For instance, project estimation that used to take days can now be accomplished in a matter of minutes. The estimation department that used to have a staff of seven people was cut down to two.