Edmund Optics, Inc

Over the past decade, Edmund Optics has grown dramatically in size and scope, more than doubling its revenue and expanding its manufacturing and distribution operations in Asia and Europe.  Their volume of transactions increased from 40 million to 107 million annually, and their annual shipment rate grew to 150,000 shipments per year.  This number is critical considering that 90 percent of the company’s orders are fulfilled through same-day shipping, an Edmunds competitive advantage.

Over the years, Edmund Optics’ growth outpaced the company’s Enterprise Resource Planning (ERP) system.  According to Edmund Optics Director of Information Services Jeff Harvey, the biggest problem the company was encountering was manufacturing capacity visibility.  “We needed a system capable of global capacity planning,” he said.  “With our existing ERP configuration, two of our biggest manufacturing facilities were not on the ERP system at all.  Our Asian plants were on a different ERP system, using different languages and currencies.”  Adding to the problem was the fact that the ERP system was not connected with the company’s E-Commerce systems.  “Our sales guys had to print out their orders and manually type them into the ERP system,” said Harvey.

After finding that their current ERP vendor could not support Edmund Optics expanded requirements, Jeff Harvey knew they would need to go outside for an ERP system.  More importantly, he recognized that he would need an outside consultant to analyze Edmund Optics needs, and guide them in the selection of an ERP system and vendor.  Harvey had a relationship with the New Jersey Manufacturing Extension Program (NJMEP), a sister organization to DVIRC.  NJMEP referred him to DVIRC and Harry Landsburg, DVIRC’s director of business process technology consulting.  “We had a high level of faith in Harry’s ability,” notes Harvey, “His knowledge of ERP systems was impressive, and he had an understanding of manufacturing that many consultants could not have delivered. Just as importantly, we knew he would be objective.”

Analysis

Landsburg developed a full analysis of Edmund Optics’ business processes, documenting both the current state of processes and ERP support, as well as the required future state.  To do so, he conducted in-depth interviews with key employees, sitting at each individual’s desk to observe, first hand, their interactions with the existing ERP system.

A fully detailed Business Process Narrative was created, presenting Landsburg’s analysis of the existing computing infrastructure, including the computing environment, network and email capabilities, servers, user accounts, database software, desktop operating systems, software and hardware, ERP system users and applications.

Recommendations

Improvements to Edmund Optics’ software-supported business processes were recommended, including system-wide enhancements to database report writing, auditing, workflow, and ERP integration with sales processes, catalog data, and the Customer Relationship Management (CRM) system.  Additionally, recommendations were made for enhancing related financial, operational and transactional processes.

These recommendations were accompanied by details on the software capabilities necessary to achieve them, and the future state benefits that Edmund Optics would like to obtain from an upgraded ERP system. These future-state expectations covered everything from product development to catalog and website management, marketing and communications, call center/order entry systems, quotations, compliance, inventory and demand forecasting, inventory optimization, purchasing, manufacturing workflow monitoring and reporting, assembly/packaging, quality assurance, budgeting/forecasting/costing, accounts receivable/payable, human resources and foreign location integration.

Vendor Assessment

Landsburg identified vendors with the capabilities to support the Edmund Optics ERP upgrade, and sent each vendor the full documentation of the company’s current- and future-state processes and software requirements.  Four vendors were selected to participate in a Round One evaluation at Edmund Optics.  Landsburg then assembled a team of 15 hand-selected employees to serve on the evaluation team.

After viewing the vendor presentations, Landsburg moderated an offsite discussion and blind ballot to narrow down the vendor choices.  “Harry acted as a moderator and referee in these discussions,” noted Harvey.  “He was phenomenal in helping us look at things from every angle, and in remaining objective throughout.”

Two vendors were brought back to Edmund Optics for two full days of demos, using Edmund Optics’ own sample data to provide a realistic view of system capabilities and functionality. Forty Edmund Optics employees were involved in evaluating the ERP systems.  To assure that Edmund Optics’ foreign facilities were involved in the decision-making process, Landsburg videotaped the presentations and made DVDs available to the managers in other countries.  A vote was taken among all evaluators, and with the approval of the CEO and core oversight team, SAP All-in-One for High Tech Manufacturing was chosen.

Due Diligence

Before committing to SAP, Landsburg helped Edmund Optics to ascertain that SAP could fully support foreign operations. He coordinated onsite visits by Edmund- Optics staff to foreign customers of SAP to gauge the level of SAP support.  Once fully vetted, Edmund Optics committed to SAP.

DVIRC’s work with Edmund Optics began in the July, 2010.  Just five months later, in December, 2010, vendor selection was complete.  Domestic project implementation was completed in October 2011, with international implementation to be rolled out over time.  DVIRC was not involved with the implementation, as this became SAP’s responsibility.

According to Jeff Harvey, “Our ultimate goal is to greatly improve our ERP system and the visibility of our manufacturing capabilities.  I’m confident that the SAP system will give us that once we implement the system in all of our manufacturing sites.”  For now, an immediate requirement was to implement the new system without losing any ground in doing so. “We wanted to be sure that we could duplicate our currently functionality,” said Harvey.  “The new system came through.”

While it is too soon to fully evaluate the benefits of the new ERP system,  process improvements are being seen as, week by week, Edmund Optics is slowly turning on new functionality.

Purchase orders are now automated, and efficiency has been improved as sales reps no longer need to manually type in eCommerce orders.  The system is user friendly, offering better interfaces that help employees accomplish tasks faster.  Security enhancements have been added to the sales process through tokenization of credit cards, which masks the visibility of credit card numbers.

Founded in 1942, Edmund Optics is a leading producer of optics, imaging and photonics products for the R&D, electronics, semiconductor, pharmaceutical, biomedical and military markets. The company is widely known for its migration from optics and science items for hobbyists and educational use to a leading, catalog-based distributor and manufacturer.

Today, the company’s state-of-the-art manufacturing capabilities, combined with its global distribution network, has positioned the company as the world’s largest supplier of off-the-shelf optical components. Headquartered in Barrington, N.J., Edmund Optics operates a manufacturing plant in Pennsburg, Pa., with additional engineering, product development and manufacturing facilities throughout the world.

Lessons Learned

Thoughts from Jeff Harvey on the software upgrade process.

“It’s a good idea to contract with an outside source for analyzing your processes, recommending software solutions, and sourcing vendors.  You need someone who is experienced and objective, and can serve as a good sounding board. It’s a full time job. So, you can either pay a consultant or take an internal employee away from his or her responsibilities full time. You’re paying either way, so why not get the objectivity?”

 

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DVIRC Advantage

The biggest value delivered by DVIRC was experience. Harry Landsburg has been through this hundreds of times. He knew the pitfalls we might encounter, what would be hard and what would be easy. He made the whole process go much quicker than we anticipated.

Harry’s combined knowledge of information systems and manufacturing was impressive. He knew exactly what he was talking about.”

Jeff Harvey
Director of Information Services
Edmund Optics, Inc