Case Study: Smethport Specialty
Industry: Toy Manufactering
Location: Smethport, Pennsylvania
Since the 1950s, countless children – and adults – have played with the Wooly Willy toy. Featuring an illustration of a hairless man’s head, kids use a magnetic stick to give Willy hair, eyebrows and whiskers of metal shavings. Made by Smethport Specialty Co. in Smethport, Pennsylvania, Wooly Willy was one of the 40 most popular toys produced from the ‘50s to ‘80s.
Founded in 1923, Smethport continues its long tradition of making toys that are simple, yet spark children’s imaginations and creativity. Over the years the company’s ownership has changed, and Willy has new friends like Hairdo Harriet, but Smethport remains true to its roots as a maker of educational toys that captivate younger children. As the toy market evolved in the ‘90s, with mid-size stores going out of business, the company found a niche in offering its products in parent-teacher stores, and specialty toy stores and chains like Cracker Barrel, rather than at the large big-box retailers.
In 2004, Smethport purchased Lauri, another toy manufacturer with complementary products, and an established reputation and client base. The acquisition instantly doubled the product line and forced the 80-year-old company to look at new ways of doing business.
“The acquisition of Lauri added confusion to what we do,” explained Robert Daggett, Vice President of Manufacturing at Smethport. “We’d been making similar stuff for years and everybody knew how to make those products. We basically doubled the size of our product line in one fell swoop and the old way of relying on memory no longer worked.”
At the time, Smethport had a homegrown system for job costing and time tracking, and an off-the-shelf application for invoicing and accounts payable. Lauri had a third system in place for accounting. Because the company acts as both a manufacturer and distributor, batch manufacturing and then pulling items off the shelves for customers on demand, it needed a unified application that could handle both processes.
“Our current systems were certainly creaking under the load, and then we bought the new company, which was just going to break it,” Daggett said. “Something had to change.”
Results & Benefits
Daggett researched enterprise resource planning (ERP) solutions online. From experience, he knew that an open architecture would provide the greatest adaptability for the company’s unique needs. Based on Microsoft SQL server, M1 by B & G™ software emerged as the clear solution:
Smethport now uses nearly all of the functionality of M1’s Production system, along with modules for Accounts Receivable, Accounts Payable and General Ledger. With a single, unified system, Smethport tracks information essential to every step of its operations, and can access and analyze data to drive process improvements.
The company easily runs M1 or customized reports for the separate companies, or exports the information to Excel to analyze data collectively. It created a range of reports to look at key metrics related to inventory such as what’s in stock, what’s on order, and projected sales of products with specific parts. From there, Smethport can decide how many products the company needs to order, at what time, to meet customer demands.
Daggett also calls out M1’s “kitting” capabilities, which allow the toy company to track the various individual toys sold within assortment packages and plan inventory accordingly.
As a small company, Smethport’s survival relies on attentive inventory and cash management – controlling stock on hand while remaining agile to customer needs. With M1, the company more effectively balances production planning and inventory.
“Because we do relatively small volumes of many different products, if we’re not careful, inventory can gobble up our cash,” Daggett said. “We used to have huge growth rates of our inventories as business grew. Now we are able to hold them level even though we add more products each year, so we can manage our cash flow more effectively.”
Daggett credits the software’s exceptional flexibility with enabling him to separate information into the three companies, and drill down to the data he needs. He regularly customizes M1 on his own, particularly for reporting. "There isn’t a system out there that fits what we do exactly, so flexibility in today’s day and age is key. A company of our size doesn’t have the resources to hire someone to customize the software,” Daggett said. “Flexibility is M1’s huge advantage over most of the other software out there that wants you to fit in a cookie cutter mold. M1’s open architecture makes it very flexible and easy for us to adjust.”
Likewise, Daggett appreciates that customizations remain through software upgrades. With other ERP systems, he had never updated the applications because he feared losing essential customizations – something that has never been a concern with M1. “When you get an update with M1, all your customizations still work,” he added. “We can do these little customizations and not have the world blow up when we upgrade to the next version. That is so cool.”
The M1 by B&G™ ERP software offers comprehensive modules designed and fully supported to meet the needs of growing manufacturing businesses. With more than 700 installed sites around the world and a comprehensive user group interface ERP Software has never been more affordable or beneficial.