Time is Money
||Stabilan, a construction company which manufactures pre-stressed flooring slabs, situated in Bloemfontein, Free State, South Africa.|
||The process of creating a quote for the manufacturing and installing of pre-stressed flooring slabs is a very complex and involved process.|
A civil engineer has to determine the maximum load that needs to be carried by the slab, together with the maximum length that the slab will have to span between the two walls. Using a complex formula, the engineer calculated the thickness of the slab and the amount of steel re-enforcing that is required.
After determining the structure of the slab, the engineer calculates the weight of the slab.
Using the weight of the slab, the engineer works out how many vehicles will be required to transport the slabs to the site and what size crane will be required to install the slabs.
After about 3 hours, using all these variables, the engineer would calculate the quote based on the totals area that must be covered by the slabs.
||Every calculation is done using a formula, albeit a very complex formula.|
Using the prescribed engineering formulas, the system can calculate the quotation given only 5 pieces of data.
The first data required is the maximum length of the span of the slab. This is determined by a qualified engineer or a good draughtsman.
The second data required is the load that the slab will be carrying. This is not an easy formula because it relies on a number of variables. After a discussion with an engineer, it was determined that he will work out the most common scenarios and provide them in a drop down list. An option is available for a custom load which can be calculated if needed.
The third data required is to determine how close the crane will be able to get to the installation site. This is required to determine the maximum length that the crane will have to extend to install the slab. Applying this length and the weight of each slab (which can be calculated), a correct size of crane can be determined.
The fourth data required is to know where the site is. This is used to calculate the slab transport and crane transport costs.
The last data required is the total area of the slabs. This is the last piece of data to determine how many slabs will need to be transported and how long it will take to install the slabs.
Using the provided data, the system could calculate the quote instantly. It would still take the engineer about 10 minutes to calculate and capture the values, however it effectively takes the system 10 minutes to produce a quote that normally takes 3 hours.
||The company determined that on average, for every 10 quotes provided, they received 1 order. This meant that they could not generate more than 1 order every 3 to 4 days unless they employed additional engineers.|
Using the system, they were now able to produce enough quotes to average an order every single day, resulting in an effective 300% increase in sales.
In addition to this, they no longer required a full time engineer to do the quotes. A draughtsman could determine the maximum length of the span of a slab and the total area of the slabs. The only action required by an engineer was to determine the load that the slab would carry.
The civil engineer of the company resigned, saving them a full engineer's salary. The owner of the business, also an engineer, was able to spend 15 minutes in the morning just determining the load requirements for all the quote requests.
As a net result, the total return on the company's investment in building a tailor system, was recovered in 6 weeks.
What You Don't Know Will Cost You
||Illovo Sugar - Gledhow Mill, a sugar milling and processing company based in Kwa-Zulu Natal, South Africa.|
||The areas in South Africa with the correct climate for growing sugar cane is in a summer rainfall area. This means that the quality of the sugar cane is at its lowest between December and February.|
The cane milling season therefore allows the sugar mill to have a full maintenance shut down during these three months, which basically means they can take the mill apart, fix everything, and put it back together again.
During this shut down period, parts and equipment are ordered on a daily basis, placing a huge strain on the budget control department that produce budget vs. actual reports for the managers.
Due to delays in the reporting process, the Gledhow mill had an over expenditure on their budget of more than 10%, which is pretty alarming because for that year it was practically their total annual profit.
||The problem was not that the expenses were not captured timeously into the financial system, but rather that the reports showing the current available budget took almost a week to print and break down into manageable sections for each manager.|
A very simple interface was developed which would extract the budget and actual data from the financial system at 4am every morning. Some pre-processing was performed on the data to ensure that the grouping and totals were done according to the needs of the managers.
The managers were given a web based tool with which to view the budget and actual data using a simple drill down system, starting with summaries and then drilling into more and more detail. At the bottom end of the drill down the manager could see the actual transactions loaded against the budget.
With the ease of access to the up-to-date data, a management directive was issued; that no purchase request will be approved unless a current printout of the available budget is attached, ensuring that no overspending occurred again.
||By implementing this simple information management tool, it showed existing data in a way that is practical to the business. The company did not over spend on their budget in the following year's shut down, resulting in a direct saving of $3 million.|
As an added benefit, as the managers could view their budgets live, the budget control department didn't have to produce all the reports anymore, resulting in a reduction of the staff in the department from 5 staff members to only 2.
The cost of implementing the solution was less than $10000, resulting in a saving of millions year on year.
Knowledge is Power
||Nova Plant Services, industrial contractor providing services to Sasol in Secunda, Mpumalanga, South Africa.|
||Sasol as a company decided to focus on core business only, with all maintenance tasks being outsourced to external contractors. This process is managed by various departments in Sasol to ensure quality control and that standards are met before payments are released.|
The contractors have to follow an elaborate paper process to ensure that they receive their payments on time. Unfortunately at various points in this process documents get lost or are redirected to the wrong person.
Most contractors have very simple systems in place to track their claims. For some, these systems are very labour intensive to track where a document is in the process, thus making it problematic if you are looking for hundreds of these documents.
As a result many claims get lost in the system and the contractors have to resign to the fact that they are not paid, because they have no way to prove that the document is lost.
||Nova Plant Services makes use of an AppWizard management information system that tracks every document, the location of the document, and the duration that the document has been at a specific station.|
Even with the system, more than $1.5 million worth of payments were "missing" in the system and not being paid by Sasol because the documents could not be traced.
The managers at Nova requested a full audit of all documents. Proof was produced from the system of all the missing documents that was submitted to Sasol.
Armed with the proof they went to the stations where the system indicated where the document should be.
After visiting the station with the most "missing" documents they found almost $1 million worth of claims stashed in a cupboard of one of the officers responsible for approving the claims.
||The system already showed benefits through saving the company time and money during normal operations but with this specific event, the company was able to recover almost the full $1.5 million just as they could prove that the documents were actually submitted to Sasol.|
If they didn't have the system in place, they would probably never have been able to recover the money.