Oil and Water Do Mix
R&M Energy Systems manufactures and engineers oil exploration, discovery and recovery equipment for virtually all major oil service companies. How does a company ensure quick and accurate parts delivery from Texas to Saudi Arabia? Find out.
Time is money in the oil recovery business. When your customer is calling from an oil drilling platform off the coast of Africa for a new motor or replacement part, it could be costing them a quarter of a million dollars a day to hold up operations. They want information, and they want it immediately. Downtime in this business is simply not an option.
R&M Energy Systems is a business unit of Robbins & Myers Inc., a $500-million company headquartered in Dayton, Ohio, that supplies equipment for the oil and gas, water treatment, chemical, pharmaceutical, food processing, agricultural and pulp and paper industries. As a global supplier, R&M Energy Systems manufactures and engineers oil exploration, discovery and recovery equipment for virtually all major oil service companies. Products include directional drilling motors, down-hole pumps and well-head components. With 375 employees, R&M is a $100 million firm that maintains corporate headquarters and two manufacturing plants in the Houston area, a manufacturing plant in Borger, Texas (near Amarillo) and another in Edmonton, Canada. The company also supports 15 customer service centers throughout North America.
R&M Energy Systems was created when the former Moyno Oilfield Products acquired Flow Control Equipment Inc. a few years ago. In trying to merge the information from the new business, the company found it was running five different legacy systems, none of which could talk to each other.
As a result, R&M Energy had a hodge-podge of packaged solutions, but very little consolidated information. Meanwhile, customers were demanding faster and more accurate information about order status and fulfillment. Increasingly, they wanted realtime information and Internet access, as well.
To satisfy customer needs and remain competitive, R&M Energy decided to implement an enterprisewide information systems backbone. This would enable the company to consolidate data from all manufacturing locations in realtime and, at the same time, link internal operations with both suppliers and customers, and facilitate e-commerce initiatives so customers could be served at Internet speed.
In seeking a software solution, R&M Energy Systems sought a single, standardized package with solid financial capabilities that could also integrate manufacturing, sales and marketing, distribution and customer service. However, finding a standardized ERP system to accommodate the company's complex, multi-mode production processes without costly modifications was a challenge. In its various plants, the company supports make-to-order, make-to-stock, engineer-to-order and assemble-to-order operations. In addition, there were some unique system requirements, such as the ability to deal with consignment inventory and distribution requirements planning. These factors alone took many vendors out of the running right from the start.
Intensive Selection Process
R&M Energy Systems began looking for a new enterprise resource planning (ERP) system in November 1999. Led by the Business Systems Manger, the selection team included representatives from each plant and each key business area. These were the people who were expected to go back to their departments as agents of change.
The team reviewed 25 vendors and eventually narrowed the list to six companies. After intense investigation, they invited two vendors back for a two-day demonstration and presentation. In April, R&M Energy Systems signed a contract to license Intentia Movex enterprise resource planning (ERP), supply chain and e-business solution and began a phased implementation almost immediately, using Intentia's Implex methodology. Implex was developed for implementing Movex and managing all the activities within the project to help ensure a rapid, trouble-free implementation with no surprises.
R&M Energy Systems licensed most of the Movex components, which will run on a newly-installed IBM AS/400 server initially supporting 120 users. Intentia's software can also run on UNIX or NT platforms, a factor the selection team believes protects the ERP investment.
The first factory, located in Tomball, Texas, as well as the Houston headquarters, went live on January 1. Other locations are expected to follow quickly, with all sites up and running by August 2001, including R&M Energy's nationwide customer service centers. A separate factory in Belgium will be implemented next year.
R&M Energy Systems believes that successful information system implementation requires more than just well-built, deeply functional software. In making the final selection, the selection team closely examined the business and technical skills of each software vendor's ERP implementation team.
Unlike some of the vendors evaluated, Intentia showed a willingness and intent to invest the right people and resources to the project. The team was also impressed by the well-organized Implex implementation methodology. As a result, the R&M Energy team was confident that the Intentia team could help make the project successful.
Intentia's commitment to delivery and to extending the ERP solution into e-business applications was also a big factor in the company's decision for Movex. Intentia's core Movex package includes basic e-business tools that the company can implement immediately on its Web site. And to accommodate future e-business plans, Intentia offers an integrated, turnkey package that will enable implementation of a business-to-business Web portal once the enterprise system is in place.
R&M Energy also appreciated the depth and breadth of functionality that Intentia has built into its ERP solution. This supports the company's vertical industry strategy, enabling Intentia to configure the software to meet the requirements of specific industries and specific customers. Initially, the R&M Energy selection team did not think Movex would be a particularly good fit for a metalworking machinery company, but it actually has turned out to be a good match.
Why the IBM AS/400?
In implementing enterprise applications, many organizations neglect to assess the technology platform, only to discover - after the fact - that the hardware and networking infrastructure is insufficient to support the software. That's a mistake R&M Energy was determined not to make. Early on, the company decided to have Movex implemented on a new IBM AS/400 model 9406-720 Server, which would provide the needed flexibility and scalability to handle the enterprise system's transactional demands for now and far into the future.
As many midtier companies have learned, the AS/400 provides a reliable and robust platform featuring 64-bit processing and e-business ready features. Experts describe it as a good value because of its reliable operation, exceptional processing power, open architecture and powerful database and management facilities. With R&M Energy's plans to initiate Internet-enabled and e-business applications, the ability of the server and operating system to incorporate "universal" languages, such as Java and XML was a key decision factor. In addition, Intentia is one of a select group of software vendors for which IBM custom builds and configures the AS/400, with application software preloaded and tested for rapid implementation and turnkey service. That, too, was a deciding factor, fulfilling R&M Energy's goals of simplicity, speed and affordability.
Anticipated Benefits: Closing the Information Loop
With its earlier systems, R&M Energy Systems found weaknesses in its material resource planning capabilities. With five different systems in five locations, management discovered that some information was virtually impossible to gather, analyze and report on.
With Movex up and running, that scenario has changed. R&M Energy expects to "close the loop" in information flow, from the shop floor up into marketing, sales and finance - everywhere across the enterprise where people are making business decisions that affect our growth, profitability and customer service.
Like many companies that have grown in an entrepreneurial manner, R&M Energy Systems is a sales-driven company that recognizes the need for supply chain efficiency and superior customer service. Fast, integrated, realtime information flow will enable the company's customers to access timely information about their orders. Enterprises cannot survive in today's world without that level of service. Movex is also expected to streamline information flow among R&M Energy's internal customers and external partners - all of the people who need to access information quickly to perform their jobs and make faster, more informed decisions.
Jim Moore, CPIM, CIRM, C.P.M. is Business Systems Manager for R&M Energy Systems (Houston, Texas). He can be reached at firstname.lastname@example.org.