About The Company
Located in Schiller Park, Illinois, ARPAC is a packaging machinery manufacturing and service organization. ARPAC has more than 100 years of combined manufacturing experience, and is recognized around the world for being the first to invent the shrink bundler and spiral stretch wrappers. Expertise runs deep with ARPAC’s 220-plus tenured staff who have installed close to 30,000 machines worldwide. Serving a broad range of industries, ARPAC’s packaging machines can wrap everything from toothpaste to tool sheds. To provide ARPAC’s unmatched team of experts with automated support and free them from their daily data entry tasks, the company implemented a next-generation enterprise resource planning (ERP) solution from Epicor.
Ryan King, director of IT for ARPAC, explains how the company “tested the limits” with its old systems. The age of the equipment alone, 12 years and counting, was enough for the company to seek a modern enterprise software solution. Employees were spending too much time on manually transcribing data on disconnected databases which required double entry and allowed for mistakes. This was ineffective and frustrating, especially when it came to customer orders. “We started to realize how long it really took to complete a task, it was amazing. People were either getting really used to workarounds, or getting very good at the current process,” says King. The limitation of the systems was ARPAC’s breaking point.
In 2007, ARPAC implemented Epicor ERP. Epicor provides a single source system that contains an extensive array of integrated business applications to help automate and streamline company processes.This enables ARPAC to minimize human intervention in routine practices so ARPAC resources can focus on value-added business activities instead, helping ARPAC increase efficiencies and productivity. King and his team were on a mission to outsource manual labor to its new ERP solution.
King didn’t want to work in the typical IT department. Instead, he wanted the IT department to become a revenue source for the company. To do so, the IT department needed to challenge the status quo. First, they needed to determine where the company’s biggest waste was in terms of time and resources, and identify what employees should not be doing, that the ERP system can be doing. These initial questions are what started ARPAC’s “lean” journey. King and his team led a company-wide initiative to leverage its ERP solution to help adopt what ARPAC calls Lean Automated Processes (LAP). The objectives for LAP are simple: utilize information technology to maximize the ease of doing business, while also decreasing the cost to do business. In other words, saving money and still getting the job done.
ARPAC has one of the fastest order-to-shipment delivery times in the packaging industry. The company’s continuing investment in a vertically integrated production facility, using solid lean manufacturing principles, creates a competitive production advantage over the long term. ARPAC maintains stock of many standard packaging machines at competitive prices for quick delivery. Epicor has helped ARPAC continue to reach new levels of lean strategies through better inventory management and accuracy.
Results & Benefits
Epicor provides ARPAC with best practices for lean methodologies on the shop floor. ARPAC estimates that the kanban techniques available in Epicor have saved the company 15 hours a week in terms of work hours, which amounts to a savings of approximately $225 per week ($11,700 per year). Take barcode scanning, for example. With barcode scanning, jobs are created and manufactured faster and easier, and without paperwork. Electronic purchase orders are automatically created on the shopfloor by simply scanning the part barcode. The system can also trigger a late email notification that is automatically sent to suppliers if an order is behind schedule. “It used to take more time to do the paperwork then to create the part. Now it is instant,” says King. ARPAC quickly learned that eliminating “go-between” processes was critical to reducing waste across all aspects of the company’s daily operations.
Adopting lean principles has made a tremendous impact on ARPAC’s sales department. A program that was designed using the LAP concept is the “ARPAC Vendor Inventory System” (AVIS). ARPAC was spending large amounts of time and resources tracking and re-ordering stocked parts. This involved a great amount of administrative time, and it required a full-time position to manage. AVIS is an online portal that was created for ARPAC’s suppliers to monitor and replenish their stock. With AVIS, as soon as ARPAC’s inventory levels drop, an email alert is automatically sent to its suppliers who can log onto the AVIS site to see what part needs to be reordered. The online workbench provides the purchase order number indicating the part type, quantity, and agreed price for the product or service. Once the order is submitted a packing slip with a barcode is automatically generated so when ARPAC receives the shipment the paperwork is already done. ARPAC simply scans the barcode upon receiving the package and avoids manually entering the purchase order information into the system.
AVIS has greatly improved ARPAC’s buyer-seller relations. The online system helps ARPAC keep products close at hand without the heavy corresponding costs. With the self-service online tool, ARPAC can communicate with its suppliers easier and faster without having to waste valuable staff time interacting with a purchasing agent, and parts and services are provided in a timelier manner. AVIS ensures ARPAC never runs out of spare parts, and always has good inventory on its shelves which is a huge customer service advantage. Today, 30 suppliers use AVIS. They like the user-friendly and “up-front simple” interface. ARPAC also created an online program for “Purchase Order Confirmations” (POC). Previously, ARPAC experienced huge accounts payable problems matching purchase order prices to invoices, and faced price list issues. On average, ARPAC spent three hours a day on each buyer chasing down suppliers to confirm purchase orders. ARPAC created the POC program, another online portal for suppliers to access, for confirming purchase orders, printing packing slips, processing back orders, and submitting invoices. Since this is all done online, ARPAC was able to reduce its purchasing head count by one. Further, through Epicor’s credit card transaction module, ARPAC set up electronic processes for handling credit card payments. ARPAC realized a return on investment within the first six months. By eliminating the need to process credit cards by hand, ARPAC saves approximately $14,600 a year.
Epicor ERP and the programs ARPAC designed using LAP concepts have made a significant fiscal impact on the company. ARPAC was able to cut costs, improve efficiencies and boost productivity all by leveraging technology to automate routine tasks. Through its implementation of lean principles, ARPAC stays committed to quality, competitive prices and quick delivery times.