Todd Pacfic Shipyards
Case Study: Todd Pacific Shipyards
Solution: IFS Application ERP
Industry: Ship repairing & Maintenance
About the Company
Todd Pacific Shipyards Corp. performs repairs and maintenance on commercial and U.S. federal government vessels engaged in various seagoing trade activities in the Pacific Northwest. Its customers include the U.S. Navy, the U.S. Coast Guard, the Washington State Ferry system, the Tacoma Narrows (Bridge) Consortium, and other government units, in addition to cruise ships, U.S. flag cargo carries, fishing boats, tankers, tugs, and barges. Todd has operated a shipyard in Seattle since 1916 and now employs more than 750 people.
Todd Pacific Shipyards was running a homegrown SQL/Visual Basic® system that focused primarily on purchasing, inventory, and project reporting, with a small accounts payable add-on. The system was written on a platform that is no longer supported and that did not provide all the functionality that Todd needed. The company was using a separate financial reporting system, requiring it to keep two sets of books—operating and financial.
Todd needed a fully integrated system that provided:
• Robust project reporting functionality, including the ability to track
the most minute details of multiyear government contracts.
• Government reporting capabilities, including reports needed for
earned value management, a management technique that encourages U.S. defense contractors to use effective internal cost and schedule management control systems.
• A business modeling application to make it easier to review and
restructure business processes.
• An interface with a third-party project management application.
Todd conducted a full-blown requirements study, with more than 1,400 requirements in different functional areas. The company then formed a software selection team, which came up with about 20 selection criteria based on these requirements. After soliciting bids, the team invited four enterprise software vendors to give demos of their products.
Team members unanimously selected IFS Applications because it offered the strongest project functionality and was judged easiest to use. Another important factor was IFS’ reputation for meeting implementation deadlines. IFS lived up to its reputation, and the implementation went smoothly, with no disruption to the business or
its 300 system users. “We turned off the old system on a Friday and the new system was up the following Monday, with everything in balance,” said Mike Taylor, Chief Information Officer of Todd Pacific Shipyards Corp. “All project transactions were correct down to the penny, and they were in the right buckets.”
During the implementation, Todd took the opportunity to revise its business processes using IFS Business Modeler™. One of the biggest benefits of IFS Applications has been its flexibility. “We manage projects that are maybe $10,000 with two activities as
well as $50 million projects with 5,000 activities,” Taylor said. “The system is able to handle both the smallest and the largest projects. We are also able to use the same software to run two different businesses—both commercial and Navy.”
On the financial side of the business, Todd has realized many benefits in moving from an add-on system to one that is fully integrated with the other IFS components. Audit trails are easier to trace, financial numbers tie, and IFS’ costing functionality is being used to apply standard overhead costs. In addition, the company’s
accountants can create project labor reports, better track the accounts receivable cash flow, and produce the standardized reports that the government requires.
The company even used IFS to simultaneously change the general ledger chart of accounts and departmental numbering scheme that had been in effect for nearly 100 years—all without pain. The new financial application has had a direct impact on Todd’s bottom line. “After the last inventory that we did before implementing IFS, we had a write-off of $250,000,” Taylor said. “The first year that we had IFS, the write-off was $2,000, and the last one was only about $80. I made that statement during a presentation to a financial executives institute, and they could hardly believe it.” The ability to do a keyword search for parts has eliminated the duplication of part numbers. “We tend to hire a number of contract engineers, and because they couldn’t decipher the old parts system, they were creating new part numbers unnecessarily,” Taylor said. “With IFS, we were able to reduce outstanding part numbers from 140,000 to 32,000.” One of Todd’s most significant achievements since implementing IFS Applications has been receiving Defense Contract Audit Agency (DCAA) certification of the company’s materials management and accounting system (MMAS). The certification, which came at the end of a comprehensive three-month audit, has brought new revenue opportunities for the company. “Now that we have the certification letters, we can use our electronic billing system for military contracts, meaning we get paid much faster,” Taylor said. “Also, if we’e bidding against other shipyards, the DCAA certification might be what it takes to put us over the top.”
Since implementing IFS, Todd has found innovative ways to enhance collaboration among employees scattered among the more than 50 buildings on the company’s 46-acre site. For example, the company has deployed a large PDA-based wireless network that lets foremen download their daily activities from IFS’ project management application. They can use their PDAs to see where every worker is deployed at any moment, making it much easier to assemble project teams on the fly. As each worker completes a task, the system is updated with the related actual costs, not with loaded labor rates. “We’re also looking into deploying wireless PC tablets with voice recognition capabilities on our ships,” Taylor said. “By writing on the tablet or speaking into it, our employees will be able to create work orders quickly and easily, and feed them into the IFS project module, no matter where they are located.” Taylor said that Todd’s management has recognized the success of the company’s investment in IFS software. “We had looked for a two-year payback on our IFS system, and that goal was met,” he said.
Learn more about IFS ERP system software.