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Business Applications
C E N T E R F O L D  
European Auto-Parts Supplier Mixes SAP, Legacy Apps for ERP

  November 26, 2001
  By Kelly Jackson Higgins


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Growth has its price: Auto-parts manufacturer MGI Coutier started missing some sales opportunities and delivery deadlines more than a year ago. The Champfromier, France-based supplier's series of acquisitions through the years had resulted in separate and incompatible production, distribution and inventory applications at its 15 European plants, and MGI Coutier was unable to track its inventory properly.



That made it difficult and time-consuming for MGI Coutier to provide competitive prices for the plastic- and steel-based interior auto parts, such as door, roof and air-system units, as well as motor- and fuel-system components, the company sells to major automobile makers, including BMW, Fiat, Ford Motor Co., General Motors Corp., Peugeot and Renault. "When we wanted to [examine] our data for global planning of production, it was really time-consuming because we had to collect the data, make it compatible and then consolidate it to finally analyze it," says Frantz Buchot, IT manager for MGI Coutier, which plans to enter the U.S. automobile parts market as well. "Without a consolidated forecast of sales, production and inventory, we could not offer competitive prices."

The production workload was not spread equally among MGI Coutier's European plants, either, so inventory was twice what it should have been at some sites, he says. "We were unable to share production information among plants, so we couldn't divide the work among them," Buchot says.

The company decided to implement an off-the-shelf ERP (enterprise resource planning) system, based on SAP R/3, at the various manufacturing and distribution plants, which run a mix of legacy applications. Before the installation, MGI Coutier surveyed each department to determine the potential benefits of ERP. The purchasing department, for instance, told IT it expected to be able to better bargain with its plastic suppliers because ERP would improve its access to pricing information.

MGI Coutier did not scrap all its legacy applications, however. It kept its human-resources salary and wages application because the company didn't have the resources to deploy the complicated SAP HR package, plus MGI Coutier wanted to get a return on investment on the internal application. So far, the European auto-parts supplier has the SAP applications up and running in six of its plants in France, and plans to cut over the other plants through next year.

To build the ERP system, MGI Coutier hired outside help: Sun Microsystems Professional Services assisted with the planning and integration of the SAP system, as well as with ongoing support, and Arthur Andersen's consulting practice handled the business side of the deployment. "We didn't have the SAP skills then," Buchot says. MGI Coutier now has its own dedicated SAP team of 15 IT staffers trained in the ERP system.

Buchot says the company didn't calculate what it lost prior to the SAP installation but estimates that its revenues should increase by 50 million to 70 million francs ($6.6 million to $9.2 million) per year once the ERP system is in place at all its plants.

To integrate the leftover legacy salary and wages application with R/3, MGI Coutier has to write custom interfaces between its systems. That means writing at least four different interfaces between SAP's F/1 financial package and the different salary and wage applications for each plant in France, Spain, Italy and Britain. "The problems could have been avoided if we had implemented the HR module, but we had no resources left at the time, so we gave up on that project," Buchot says.

SAP applications have long been maligned for being not so user friendly, and MGI Coutier's end users can see why. "When you create an article in the database, you have to give the application all the different characteristics of the product -- financial, logistical, production and accounting -- and sometimes you don't have all the information with you when the need to create the product in the system is urgent," Buchot says.

Some companies have gotten around this by running SAP's newer, Web-interface-based version of the software. While MGI Coutier is using an older version (4.0b) of the software, it plans to upgrade to the Web-based version in mid-2003.

IT Department Info

  • Size of IT Staff: 40

  • Buchot's Average Workweek: 50+ hours

  • Biggest Challenge: Managing people and ensuring they stay at the company, and putting them in the right place.

  • Latest IT projects: SAP implementation, intranet project, converting to the euro, defining and implementing an IT security policy for all plants.

  • Coolest Part of the Job: "It enables me to travel all over Europe and meet different people in different cultures."








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